Non-fungible tokens (or NFTs, as they are more commonly known) can be used to buy and sell various forms of digital creative work including visual art, music, trading cards and sports collectibles. Virtual marketplaces such as OpenSea, Rarible and SuperRare enable creators, artists and musicians to digitally license and manage the distribution of their content, and to earn a share of the profits every time it is sold. Platforms such as RAIR are now also looking to use NFTs for digital rights management.
Twitter and Square CEO Jack Dorsey sold his first-ever tweet as an NFT for nearly $3 million, and iconic auction house Christie’s has sold digital artist Beeple’s NFT art piece for $69 million. So far in 2021, investors have already poured $90 million into NFTs and digital collectibles – almost triple the $35 million invested in the entire year of 2020. Within the last 3 months alone, the overall market cap of the major NFT marketplaces has risen by 1785%, from $23 million at the beginning of 2021 to $432 million near the end of March.
Despite growing interest among investors and industry insiders, a major obstacle preventing mainstream adoption is the complex payment infrastructure surrounding NFTs. Buying NFTs often requires collectors to purchase them using cryptocurrencies. The absence of a streamlined system that allows buyers to switch between their preferred payment methods has been a major deterrent for stakeholders, particularly those who don’t really use digital currencies.
This content is available exclusively to Tearsheet Outlier members.
Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account