What are NFTs?
A non-fungible token (NFT) is a non-transferable unit of data that may be sold and traded on a blockchain, a type of digital ledger. Digital media such as photographs, videos, and audio may be connected with several types of NFT data units. NFTs differ from blockchain cryptocurrencies like Bitcoin in that each token is uniquely recognized.
Although NFT ledgers purport to give a public certificate of authenticity or proof of ownership, the legal rights that an NFT conveys can be ambiguous. NFTs do not block the creation of NFTs with identical related files, nor do they restrict the sharing or copying of the underlying digital data. They also do not impart the copyright of the digital files.
Instagram’s support for NFTs
Bringing non-fungible tokens (NFTs) to Instagram’s vast audience has the potential to supercharge the broader market, according to a research report released on Sunday by Deutsche Bank.
- Mark Zuckerberg, the CEO of Facebook’s Meta Platforms, announced earlier this month that the business was “working on adding NFTs to Instagram in the near term.”
- The bank said that the platform’s strong global brand recognition will “lend itself to legitimizing NFTs, which could serve to erode buying hesitancy across the company’s broader audience,” the bank said, adding that the platform’s strong global brand recognition will “lend itself to legitimizing NFTs, which could serve to erode buying hesitancy across the company’s broader audience.”
- NFTs are blockchain-based digital assets that reflect ownership of virtual or physical objects and can be sold or traded.
- According to the analysis, the creation of an NFT marketplace on Instagram, which is owned by Meta, is extremely likely to acquire traction. The bank predicts that a wider rollout of an NFT marketplace on Instagram could generate up to $8 billion in net annual revenue based on normal NFT marketplace fees and cautious assumptions about user penetration and average transaction prices.
- Other internet companies, like eBay (EBAY), Twitter (TWTR), and Snap (SNAP), are also making moves to integrate digital assets, according to the note.
- According to the paper, the NFT market is in “hypergrowth mode,” generating about $25 billion in transaction volume last year, up 250 times from the total amount of around $95 million in 2020.
- According to Deutsche Bank, the total addressable market (TAM) for NFTs is anticipated to be over $1 trillion, with sectors including art, collectibles, and gambling leading the way.