Annual market cap of NFT worldwide 2018-2021

The market cap of NFT, or non-fungible tokens, shows a fast moving development, growing more than 3,000 percent between 2020 and 2021. The source of these figures states that coming up with a market capitalization for a market this young is "a tricky exercise" and even mentions this particular estimate is "conservative". The volatile nature of developments in this new market can also be seen in the transaction volume of NFT for various segments as well as the market size of NFT within the same segments: Transactions declined for gaming, whilst value grew for arts. This latter aspect was demonstrated in early 2021, when an NFT digital artwork was sold in an auction for roughly 69 million U.S. dollars - making it the third-most expensive art piece ever sold from a living artist.

Blockchain approved: the application of NFT

Non-fungible tokens refer to unique, non-transferable digital assets stored in blockchain. This one-of-a-kind asset is something that cannot be tinkered with, but can still be traded as an asset or bought with a cryptocurrency such as Ethereum. Essentially, this makes an NFT a digital certificate of authenticity: The token serves as a unique code connected to a file, allowing to distinguish the original file from copies floating around on the Internet. This relatively new technology allows for various applications. Several famous examples of where NFT was used include the aforementioned 69m USD auction sale, Twitter founder Jack Dorsey selling his very first tweet through NFT marketplace Valuables or sports platform Top Shot - where basketball fans can buy and collect packs of NBA highlights. NFT is also used for investments, with an investor specializing in this technology ranking among Europe's biggest Fintech investors in the seed stage.

2021: the cryptocurrency Renaissance

The NFT art auction occurred in a year where the price of several cryptocurrencies grew significantly, and general interest in crypto or blockchain reached new heights. The price for a single Bitcoin, for instance, hit an all-time high of 60,000 U.S. dollars in March 2021, slightly over a month after Tesla announced it had bought 1.5 billion U.S. dollars worth of the world's most well-known cryptocurrency and it planned to accept Bitcoin as a payment method for its Model 3 car.