In 2022, if someone had told you that Internet memes, digital artwork and Twitter avatars would sell for hundreds of thousands of dollars, would you have believed them?

Well, these are nonfungible tokens, or NFTs, in a nutshell. NFTs are driving blockchains toward uncharted territory on the backs of beautiful kitties and pixelated punks. What may appear to be a shroud of speculation over pointless collectibles is actually the clouded horizon of fintech innovation. NFTs represent a turning point. Blockchain technology is now being used to represent assets beyond the chain.

In lodge to sympathize the thriving and intriguing world of NFTs, the Cointelegraph Research team delves deep into this new space, presenting the findings in the latest report "Nonfungible Tokens: A New Frontier."

This written report covers the history and development of NFTs, how NFTs are stored, traded and exchanged, how to mint an NFT and what platform to choose, how the NFT marketplace works and how the prices are formed, how to discover exciting new NFT projects, how NFTs are regulated in various jurisdictions, how much free energy is used when creating and trading NFTs and what future awaits this emerging marketplace.

Download the full report here, consummate with charts and infographics.

How information technology all started

Bitcoin pioneer Hal Finney first mentioned an early on version of NFTs in 1993. He called them "Crypto Trading Cards." In a forum discussion, Finney touched on definable scarcity, exclusive buying and provenance. These concepts are now at the core of every NFT.

The idea of NFTs wouldn't encounter much evolution until 2022 when Yoni Assia wrote about "colored bitcoins," which eventually became "colored coins." Built on top of the Bitcoin blockchain, Colored Coins created semifungible tokens that were supposed to represent real-world assets such as real estate, bolt and bonds.

I of the primeval NFT iterations "Breakthrough" was created in 2022 past Kevin McCoy and Anil Dash and presented at the New Museum in New York City. In 2022, the first Ethereum-based NFT called Etheria was launched at Devcon 1. This is largely considered to be the offset truly nonfungible token.

The term "NFT" emerged in 2022. Although little known at the time, two very significant NFT projects, CryptoPunks and CryptoKitties, were launched in 2022. This same year, the get-go NFT house was sold through Propy. This marked the get-go wave of NFT popularity which synchronized with the crypto market place cycle.

Market place growth

NFTs have become a booming market that expands year afterward year. For example, sales have grown from merely $41 million in 2022 to an amazing $2.5 billion in the first half of 2022, representing a 60-fold growth in three and a half years.

Even compared to 2022, the growth is staggering. Full sales in 2022 reached $340 meg and in 2022 so far the sales have already surpassed $9 billion which is more than 25-fold growth co-ordinate to information from NonFungible.com on NFTs on Ethereum.

The rich, famous and influential began collecting or issuing NFTs in 2022. Past May, monthly sales volume reached $360 million. Shortly thereafter, a deep downturn in the crypto markets briefly concluded the NFT euphoria, causing daily volumes to drop significantly — a reduction of upwards to xc% from their highest levels. Past July, NFTs rebounded and once again reached record-breaking highs, astonishingly attaining $2.6 billion in total volume in August on Ethereum alone based on data from NonFungible.com.

While Ethereum continues to boss NFT market place activity, there is interest growing in alternative layer-one blockchains due to their cheaper transaction fees and faster block times.

Ethereum holds approximately lxxx% of NFT sales volumes in 2022, only only 37% of full NFT traders. This is a reflection of the higher average NFT valuations on Ethereum and larger transaction fees. Period and Wax both concord a big share of total traders, 32% and 25%, respectively, merely with significantly less volume. Their cheaper transaction fees enable lower-priced NFT transactions and apply cases for high-volume applications such as games.

What categories are among the well-nigh popular?

A breakdown of transactions by popular NFT categories, discussed in section i.3 of the written report, reveals that early sales were dominated by collectibles such equally CryptoKitties and CryptoPunks. In tardily 2022, the gaming NFT category surged in transaction count, as player bases expanded on games such every bit F1 Delta Time, Gods Unchained and Decentraland.

In mid-2020, the number of transactions that included sports and metaverse NFT projects began climbing every bit these platforms increased in popularity. Effectually the aforementioned time, art NFTs besides drew increased attention, peaking in January 2022 with Beeple's record-breaking sale.

Although the overall share of transactions for collectibles has decreased, they still boss total sales volume and atomic number 82 projects by a meaning margin. The art category follows backside collectibles in sales volumes, reflecting the similarly high valuations in the fine art and collectibles categories.

Will NFTs survive the side by side crypto crash?

This year, at that place are over $ix billion in NFT sales on Ethereum so far. Total NFT sales are expected to accomplish at to the lowest degree $17.7 billion by the stop of the yr, every bit new traders wait to boost secondary market place activity.

Historically, the NFT's dependence on cryptocurrency has been quite high. NFTs waned in popularity during the 2022 conduct market in cryptocurrency and again in June and July of 2022 when the cryptocurrency market pulled back. Elevated involvement in NFTs has coincided with the overall uptrend in the digital asset market, which may signal that NFT prices will drib if cryptocurrency prices drop.

This article is for information purposes only and represents neither investment communication nor an investment analysis or an invitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for private investment or other advice.