NFT, or Non-fungible token, has been named Word of the Year by dictionary publisher Collins, who say the use of the abbreviation rose by over 11,000% in 2021.
NFT is one of three tech-based words to make Collins’ top list, narrowly beating “crypto” for the top spot and joining “metaverse”.
NFTs have become a popular form of digital token for their ability to convey information in an exclusive way whist simultaneously protecting the ownership of the information itself, becoming an increasingly collectable item.
Over the last year, the industry has boomed with NFTs becoming the latest fad, with big brands creating and selling NFTs from Banksy artwork to farts.
Adam Morris, NFT expert at community platform NFT Club, explains why they’ve experienced such a boom:
“Despite what some people may think, NFTs have mostly been a natural progression. They were present in the 2017 crypto hype, but people were just starting to understand cryptocurrency, so NFTs were too advanced for that time. Within this recent crypto rally, there are more people who are experienced in the industry as they went through the 2017 cycle, so as a result, a lot of people who understood the ins and outs of crypto were looking for the next ‘thing’.
“Currently the top end of the NFT market is mostly made up of successful business people and people who did very well off cryptocurrency. This is why the price tags on some NFTs are so high, simply because these people have the money to spend.
“But, just like any market, there will be a correction and because NFTs are new it’s more likely to be a very large correction. Similar to how the crypto market was in 2017, people are just discovering NFTs and there is a lot of excitement. At some stage it will reach a tipping point and most NFTs will drop substantially in value. However, NFTs and the technology behind them are definitely here to stay. With the announcement of Facebook rebranding to Meta and the amount of effort they are putting into creating the Metaverse, NFTs have a large role to play in this futuristic setting.”
The news has been met with a lot of excitement in the industry, with the move highlighting just how big a reach the crypto community has.
Barron Solomon, CEO and co-founder of Solo Music said: “Collins Dictionary choosing NFT as their word of the year is a strong testament to the power of the crypto community and blockchain technology. NFT technology was known by few, and understood by even less, only a few years ago. The community continues to innovate, using blockchain technology to redefine ownership and empower artists, and the world is taking note. Mainstream adoption is increasing rapidly, and we’re excited to see how this trend continues in 2022.”
Amelie Arras, Marketing Director, Zumo continues these thoughts, saying: “It’s brilliant news that NFT, or non-fungible token, has been named ‘word of the year’ – but it’s not surprising. The decision recognises the huge impact that NFTs are having, and the possibilities they unlock. NFTs bring crypto and the emerging decentralised world to a whole new level; they have proven to be a useful and tangible application of blockchain across multiple industries, such as art, music and real estate. This will only further fuel the adoption of crypto across the world.”
A “digital representation of reality”
Uldis Tēraudkalns the CEO of Nexpay, agreed with Arras in that the news came as no surprise at all.
“We have witnessed a sudden and massive explosion in digital representation of reality in 2021, he said. “Last year, nobody knew the word ‘metaverse’ and only a few people knew NFT. Then suddenly this is what most major brands globally are jumping on and Facebook even rebranded to meet this new exciting world. So it’s not a surprise. I would guess that metaverse would be the word of the last month or two…”
Emphasising the digital world, Dr Hirbod Assa, Senior Lecturer in Finance and Fintech, University of Kent said: “NFT or Non-Fungible Token is Collins Dictionary’s word of the year. Why? The world is becoming heavily digitalised. That can include any collectable piece, so there must be some way to define the ownership of digital collections. The main characteristic of any real collectable piece is that they are non-fungible commodities. NFT is a computer algorithm that commodifies a digital piece that is also non-fungible. But NFT has gone beyond that and introduced new types of collection, digital collections, which are mainly business objects. Can they sustain? Nobody knows; this is a new world to explore.”
“Since the explosion of NFTs over the course of this year, especially after Beeple’s mammoth sale, it provided an opportunity for digital artists from across the globe to perceive NFTs as a viable source of income. NFT being the word of the year also puts focus onto the mass as a concept that is not scary, but is something that they could get behind. Kalamint since launch (on Mar 23, 2021), we have over 150,000 users from 192 countries (with a lot of artists from economically weaker countries who view NFTs as their primary source of income). Legitimizing it at a global scale will only encourage a lot more artists to dive into the NFT world and experience it first-hand,” said Pradeep Atmaram, Director of Marketing, Kalamint.
They continued: “The term NFTs being in the constant news cycle and also the ‘word of the year’ establishes that NFTs are more than just a fad and is here to play the long game. I’m confident that this will bring in more attention and encouragement to the artists who are here as early adopters to push it more into the mass adoption stage.”
Finally, looking forward to the future of the NFT market, Viktor Prokopenya, fintech investor, & entrepreneur said: “NFTs as elite art-forms are definitely here to stay: this is the beginning of a huge new trend.
“NFTs create scarcity online; a quality only possible offline before. All kinds of online art could easily be replicated before NFTs – you could download a file with music with no loss of quality, for instance. NFTs are essentially digital collectables, they make something unique and therefore highly prized. Scarcity creates opportunities for new forms of digital art to exist and can create an entirely new market for artists.
“The previous cryptocurrency boom was centred on the financial world – the NFT boom looks like it will bring innovation to art and creativity, which can only be of benefit to the world.
“Humans have collected art for many centuries, from grand Renaissance works to Impressionist paintings by Monet or Renoir. This is the next incarnation of that basic desire to collect creativity and own inspiration.”