Non-Fungible Tokens (NFTs) Market Size, Share, Growth Analysis, By Type(Physical Asset, Digital Asset), By Application(Collectibles, Art, Gaming, Utilities), By End-Use(Personal, Commercial), By Region - Industry Forecast 2024-2031

Non-Fungible Token Market Driver

• Rising demand for digital artworks to drive global non-fungible token (NFT) market: NFT has gained immense popularity in digital art applications around the world through social media and other digital platforms. Furthermore, NFT makes the art world easily accessible to consumers through digital platform and eliminates the need of physical visit to a gallery. The tokens can be used to sell artworks directly through virtual marketplaces. Thus, shortening the purchasing cycle.

Non-Fungible Token Market Restraint

• Uncertainty in global non-fungible token (NFT) market: Valuation of NFTs is heavily influenced by scarcity, uniqueness, and the perspective of owners and purchasers, as well as the availability of distribution channels. As a result, it is extremely difficult for a new seller to predict the identity of the next buyers of an NFT or the potential motives driving their purchase. Because the market is still in its infancy, it is difficult for new investors to forecast future patterns in NFT pricing. A rapid fluctuation in NFT can result in a massive loss for the owner. In fact, sometimes NFT owners may face several challenges while selling the NFT collectible or artwork or fail to sell them due to the low demand or lack of interest by buyers.
• NFT transactions are connected with large and hidden gas fees, which most first-time users are either unaware of or ignorant of. Many NFTs are built on the Ethereum blockchain, and smart contracts are built using ERC-721, ERC-20, ERC-1155, and other token standards. The Ethereum blockchain, for instance, uses the proof of work mechanism to determine its value, which results in high gas fees hamper the non-fungible token (NFT) market.
• However, Ethereum is attempting to overcome this constraint by transitioning from a proof-of-work approach to a proof-of-stake model, which could cut energy consumption per transaction to as little as 35Wh, resulting in lower gas fees.