Could the NFT Market Become Bigger Than Bitcoin?
Looking at the growth of the NFT market overall, Fool.com contributor Chris MacDonald and The Motley Fool's Eric Bleeker tackle the discussion of whether the NFT market could surpass Bitcoin (CRYPTO: BTC) in terms of market capitalization soon. This discussion took place on the Jan. 5 episode of "The Crypto Show" on Backstage Pass.
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Eric Bleeker: A crypto prediction from Kevin O'Leary who we have had on Backstage Pass before talking about his crypto initiatives such as WonderFi (OTC: WOND.F)
Kevin O'Leary made the prediction that he believes NFTs will become bigger than Bitcoin. You see the headline there? What does he have in his prediction? He says, NFTs can prove ownership of real-world assets such as designer watches or cars, which once again takes us back to this real-world digital worlds synthesis that we're increasingly seeing more of in crypto ideas.
I put an example down here because I figured people say, how does that work? I myself say, how does that work? Example, bringing physical goods to NFTs is 4K marketplace which is tokenized Rolexes and other luxury goods.
What's the trade-off to this? Well, you go from once again, a decentralized idea to who has the physical item. That is what 4K marketplace does. They store and ensure the items.
Once again, you do have a single point of failure, but on the other hand, you do have an asset that now trades digitally and freely. As Kevin O'Leary said, "You're going to see a lot of movement in terms of doing authentication and insurance policies and real estate transfer taxes all online over the next few years, making NFTs a much bigger, more fluid market potentially than just Bitcoin alone."
The question I would have for you, Chris, is, do you buy it?
Chris MacDonald: There's one company that I've been following WISeKey (NASDAQ: WKEY) , that's what they do. They provide certificates of authenticity for NFTs and their NFTs in and of themselves can be certificates of authenticity. This is an interesting idea for something like a Rolex or a car to have that stored on the blockchain with the blockchain being a perpetual ledger that can't be changed or altered in any way. That's a pretty good use case for it.
This argument, I think, is one that can hold water. But like you said, in this case, there's some centralization involved, so really is it truly decentralized and how is this different than storing it on some encrypted database somewhere?
It's that discussion and it's circular in that way.
But the NFT market -- I think you're going to show some statistics on this -- there's been some pretty incredible growth there and investors looking to get in front of what could be a pretty incredible growth area of the crypto market are certainly looking at this as a trend to watch.