Understanding Why NFTs Blew Up in 2021: Trend and Break Points

If there is anything that the broader crypto community can seemingly agree on, it’s that 2021 has been the year of non-fungible tokens (NFTs). These tokens became a wildly popular hit this year, with billions of dollars worth of NFTs moving between owners.

Besides the surging value, NFTs also became incredibly popular due to increased adoption. Artists, musicians, and many more immediately jumped on the trend, minting and purchasing NFTs as they became more acutely aware of the assets’ benefits for them. 

Despite that fact, there is still a growing number of people - both in and out of the crypto industry - without a proper understanding of NFTs or why they are so popular. For many of these people, the argument is simple - if you see an NFT art piece today that sold for $200,000, you could still take a screenshot of that piece and have it framed for less than $40. So, what makes the art piece really valuable?

Control - A New Age for Creators

There is little to no doubt that the people who stand to gain the most from NFTs are creators. These are essentially the artists, musicians, visual experts, content creators, and more who rely on their art for income and sustainability.

Over the years, the creator space has become incredibly centralized. Anyone who wants to sell anything will have to go through specific platforms to get their art out there. If you have a book, you have to sell it through Amazon. If you’re a musician, streaming platforms like Spotify and Apple Music are where you will sell. If you have video content, your best bet is YouTube.

All of these platforms take their cut from your profits. They’re granting you exposure, and they take a considerable share of your income as compensation. NFTs change that.

With NFTs, artists don’t necessarily have to go through middlemen to make their money. They can release their work as NFTs, publish them to their considerable audience, and get the lion's share of their revenues.

Of course, there’s an argument to be made about the type of artists that can make money off NFTs. You can primarily only do this if you have a growing fan base or your work is so transformational that it eventually gets attention. Still, the fact that artists have the opportunity to keep all of their revenues is a game-changer.

The FOMO Effect

Admittedly, there is a growing number of people who seem to have simply caught the Fear of Missing Out (FOMO) and have moved into NFTs.

In 2021 alone, we’ve seen the entrance of different brands, names, and acts into the NFT space. From the Recording Academy to sports brands like Nike, it seems like NFTs are the way for brands to connect more with some of their fans. This increase in exposure has allowed more people to feel more comfortable with NFTs.

Regardless of what it is, adoption is usually broken down into two segments - those who understand the potential of a trend and are willing to stick with it, as well as those who come in because others are doing the same. NFTs are no different.

Of course, the growth in marketing has helped this as well. Today, there are multiple firms that help crypto projects and companies to grow their influence and become global sensations. Several NFT projects have also taken advantage of their services.

Mirko Scarcella, the CEO of LION ADV, helps NFT and Crypto projects to reach more people and grow their credibility thanks to Celebrities marketing and crypto promotion. The crypto market is prone to trends and hype, and NFTs have also benefited from that.

An Opportunity for Self-Custody

For the past decade or so, data storage has been centralized. Cloud servers run by companies like Microsoft, Google, and Amazon have made millions as they offer people the opportunity to keep their data on their platforms. While innovative, centralized data storage can present a bit of a security risk. A hack on a centralized server could put your data at risk, causing you to lose control over it.

NFTs present a safer alternative. They allow people to store some sensitive data on the blockchain, which has so far proven to be more secure than centralized data storage systems. With NFTs and blockchain technology, people can store their data privately and securely. You don’t need to store your files on remote servers that are controlled by someone else and which are susceptible to hacks. The blockchain ensures that you keep your data and can control it better.

A Change in Consumer Trends

For the past year, people have spent more time indoors and online. The coronavirus shocked the world and plunged everyone into a deep lockdown that changed the way we live and work. For many, exploring the internet was the only escape.

With prolonged quarantines, forced lockdowns, and restrictions placed on social gatherings, people have become more interested in the internet and the crypto space in particular. NFTs came at the perfect time - people wanted something new to explore, and the hype surrounding NFTs was enough to get them hooked.

Interestingly, many people who lost their jobs and income sources due to the economic impacts of the pandemic were able to find new earning opportunities with NFTs.

With all of these forces playing out at the same time, it’s pretty easy to see why the interest in NFTs has been raging. Experts believe that the NFT craze will continue into the year, regardless of the new trends that come into the crypto market - and, by extension, the larger world.