NFTs are growing to become a household name. From last year, they’ve gained much significance and few persons have in-depth knowledge as per the true nature of the virtual asset. As digital arts registered on the blockchain, they are a unique form of cryptocurrency assets, popularly known for attributing value to physical paintings when digitized.
A Banksy Print was bought by a blockchain firm in March last year for $95,000, the fine art was burned and the burning process was streamed live on Twitter, the painting was then converted to an NFT and then put on sale. The value of the item surged and was later sold for $380,000. This event amongst several reasons accounts for the durability of the NFTs.
According to the findings of the Nonfungible.com report, NFT trading hit exactly $17.6 billion in 2021, reflecting an unbelievable growth rate of 21,000%, from a limping total value of $82 million in 2020.
The estimated growth rate of NFTs in 2021 according to the report, is even believed to be low compared to an early projection from Chainalysis, a crypto data analysis company, which had previously documented that the virtual asset had a market cap of over 40 billion U.S. dollars in the previous year.
The co-founder of Nonfungible.com, Zuppinger, however, noted that its estimates ruled out NFT trading that was perceived to be associated with criminal activities such as money laundering and wash trading.
NFT Sales and the Vulnerability to Criminal Activities
The fact that NFTs as well the crypto sphere generally allows for anonymous trading, has been a deep concern for its possible use for crimes such as wash trading and money laundering. According to a Chainalysis finding, pieces of evidence were displayed about a few users using NFTs to have committed these crimes.
While trading with NFTs raises the concerns of insecurities on the blockchain, several nations are formulating policies on the proper regulations of crypto assets. Yesterday, President Joe Biden issued an Executive Order on the proper management of digital currencies in the U.S.