A Year to Remember: The Rise of NFTs in 2021
2021 was the year of NFTs. Total sales reached $27 billion in 2021, according to Chainalysis.
That’s quite the rise — especially when you consider that much of the world had hardly heard of NFTs a year or two ago.
As we leave 2021 behind us, we thought it would be opportune to review the past year. There were many important events for NFTs that will have an important effect on their future.
Let’s get to it.
The Rise of NFTs
Even though the history of NFTs began in May 2014, with Kevin McCoy and Anil Dash, 2021 is the year that got the ball rolling for real. You could say that, if you were to use the concept of dog years, NFTs became the fiercest canine of them all. It grew from its 6-year long infancy into a beast in its prime in the span of a year.
The catalyst for the 2021 NFT ascent may have been when Grimes sold her digital art for $6 million or when Nyan Cat sold for $600,000. At that time, those two sales were monumental, not only because of the monetary size of those transactions, but because of the pop-culture implications. Grimes is a popular Canadian musician and Nyan Cat is one of the best-known internet memes.
Speaking of memes, NFTs became so popular that they themselves became somewhat of a meme:
Of course, this is a bit of an exaggeration and a misunderstanding of what NFTs are and how they actually work, but most jokes and memes are based on an exaggerated characteristic of some concept.
While this meme captured the idea that NFTs have value, what it failed to convey is that NFTs have taken the form of digital art. NFTs are unique just like original art and they are valued by the people themselves. Therefore, they’re typically not sold at set prices, but rather buyers put up a bid price.
For instance, the Mona Lisa doesn’t have a set value. If a person owned the famous painting and wished to sell it, they’d host an auction for it and see how much they could get.
- If you wish to know more about value in general and the value of NFTs, you can read our thoughts on that.
After some initial headline sales, NFT collections started to take off. The Bored Apes Yacht Club was perhaps the most popular of all, reaching $542 in sales by October. Even celebrities have bought Bored Ape NFTs. On January 3rd, 2022, Rapper Eminem purchased a Bored Ape NFT for $460K.
Without a doubt, 2021 saw NFTs making headlines over and over again. The arrival of the Metaverse in the second half of 2021 brought even more attention to NFTs, as these two technologies are intertwined and influence each other. After all, within Metaverse worlds, NFTs will function as the economic fuel that ties the ecosystem together.
Let’s Talk Numbers
As mentioned in the intro, NFT sales hit $27 billion in 2021, up from a mere $400 million at the start of 2021. That’s a 67.5x increase in one year!
It’s hard to project NFT sales numbers in 2022. At NFThistory, we do believe total sales will easily eclipse 2021 numbers. Some experts believe the NFT market will reach $1 trillion within the decade, and we tend to agree.
Among that $27 billion spent, some sales made headlines.
One of the most significant NFT transactions of 2021 was the sale of the Everydays: the First 5000 Days NFT. Mike Winkelmann created a gigantic digital art collage consisting of 5000 pictures that Mike collected from May 1, 2007 through Feb 21, 2021. This collage art was bought in March 2021 by Vignesh Sundaresan for $69.3 million (or 42,329 ETH at the time).
On December 4th, 2021, a new record sale concluded, exceeding the amount given for Everydays. On December 2, Pak (the seller) announced the sale of his NFT collection “Merge”, a collection of “Units of Mass” that visually resemble planets. In those two days, 28,983 collectors spent $91,806,519 to purchase 312,686 total units of mass.
Making the NFT Market Sustainable
Art has proven to be the first use case for NFTs. It’s a powerful one, considering that the non-fungibility of NFTs means ownership can be verified and creators can be rewarded fair value for their work.
For NFTs to stay in the mainstream, though, they must expand their use cases. The technology is incredibly powerful, and it does have the power to revolutionize industries. We believe that finding new use cases will be the focus for NFT projects in 2022, as innovators create NFT solutions for everything from medical records to concert tickets. For investors, seeking out projects with unique use cases should prove key to long-term success.
For example, at NFThistory, we’re building a new NFT use case: Preserving unique moments in history on the blockchain.
Through our platform, you can preserve personal memories, a country’s history, important dates, and more in the form of NFTs — without having to worry about censorship, imperfect record-keeping, or tampering of information. NFT technology and the NFThistory blockchain will ensure transparency, efficiency, and accuracy with how dates are minted, preserved, and traded.
- Our testnet is live. You can check out our testnet here.
One other thing that the NFT market needs to go fully mainstream is speed, scalability, and affordability. Ethereum is and probably will remain the most popular network for NFTs, but its cost and speed are currently hindering the market. Ethereum 2.0 will solve these issues, but we still need more diversification on where NFT projects are built.
Fortunately, this shift may come naturally. As we await Ethereum 2,0, many projects may opt to build on other Layer 1 Blockchains, such as Solana, Avalanche, and Cardano. This will be good for the industry — the more diversification in the NFT market, the better it is for long-term sustainability.
Closing thoughts
This year has been absolutely incredible for NFTs and all those involved in the NFT market. Look out for more blockbuster sales in the coming months. There’s sure to be plenty.
As we approach our public sale, the positive trends of the NFT market bode well for us. We hope this trend will continue in 2022 and in years to come — because that will benefit our project and our community tremendously.
About NFThistory
NFThistory is the world’s first platform for acquiring and transferring ownership of historic moments using blockchain. From the landing on the moon to the birth of Bitcoin, you can own, buy and sell any date and moment in human history on NFThistory’s platform.
If you wish to stay up to date with our project you can visit our:
Website | Twitter | Telegram | Medium
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Image sources:
https://twitter.com/flyingfish_ssb/status/1453089973385707526?lang=en
