2021 was certainly a year to remember, especially if you were or became an NFT enthusiast. Ranging from sports idols, funny looking apes to video clips of people walking – sales of NFTs reached new heights, blowing past all forecasts to a breathtaking $25 billion for the full year. Data from market tracker Dappradar shows the record does come with some indications that the exponential growth might be abating though.
The NFT year of 2021
NFTs have certainly been well received by the art and crypto community, especially during 2021 that accelerated growth beyond all expectations. During the year, ‘simple’ cartoons have been auctioned for millions of dollars, with no physical objects changing hands. There is one NFT specifically that has had heads turn (and sometimes shake), with the now-famous Christie sale of Beeple’s NFT in March for $69.3 million. That definitely marked a new high score in the NFT world, but it was far from the peak in terms of general adoption.
The general adoption came in full force when some of the world’s largest corporations entered the game, including Coca-Cola, Gucci and Gap. Not only have they sold NFTs to legitimize the whole movement, but they’ve also carved a way for other large corporations to enter the NFT craze. This is more significant for 2022 than the brands themselves.
The year-over-year figures are staggering
So in numbers then. The total NFT sales volume reached $24.9 billion in 2021. If we compare this to the year before, it becomes quite a telling picture. In 2020 NFTs sold for just $94.9 million. This according to DappRadar, that track global NFT sales by collecting data across ten different blockchains, which are used to record who owns the NFT.
Depending on the data provider, the estimates vary to some degree. There are ‘off-chain’ transactions that are not easily captured by the data. But, this total estimation should be seen as fairly accurate.
Another source, CryptoSlam, which also tracks multiple blockchains, said the 2021 total was $18.3 billion. NonFungible.com, which tracks the ethereum blockchain only, put 2021 sales at $15.7 billion.
This means the money spent on NFTs in 2021 is roughly equivalent to the amount pledged at COP26 to help countries phase out coal, or the funding made available by the World Bank to buy and deploy COVID-19 vaccines.
Sales peaked in August, then declined in September, October and November before picking up again in December, data from the biggest NFT marketplace, OpenSea, showed.
This does not appear to be correlated with fluctuations in the price of cryptocurrencies, which are often used to buy NFTs, as bitcoin and ether rose in the September to November period.
What are NFTs?
A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger. NFTs can also be associated with reproducible digital files such as photos, videos, and audio. NFTs use a digital ledger to provide a public certificate of authenticity or proof of ownership, but do not restrict the sharing or copying of the underlying digital files or the re-creation of identical NFTs. The ownership that NFTs confer is not legally binding. The lack of interchangeability (fungibility) distinguishes NFTs from blockchain cryptocurrencies, such as Bitcoin.
What is the history of NFTs?
The history of non-fungibles is significantly more extensive than most people realize. The earliest NFT endeavors stem all the way back to the Colored Coin period of 2012–2013, as the Bitcoin Blockchain was expanded upon to represent and manage real-world assets. From these first stumbling steps a lot has happened. Yet, despite the tremendous progress made in the preceding two years, the space is still relatively young, and evolution will certainly continue for long into the future. The development of the NFT environment is expected to accelerate as more individuals and organizations become aware of the impact that NFTs may have and begin to implement them.