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Milking the cash cow: NFTs seen as investment opportunity by VCs

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According to data from Messari, the NFT marketplace sales volume grew by 2,882% in February. It dwarfed the increase in monthly sales volume in any given month throughout the past three years. The fast growth of the NFT market follows high-profile auctions of nonfungible tokens led by Sotheby’s and other recognizable brands, such as Time Magazine, which is planning to auction three NFTs in the coming month.

The NFT sector has begun to see explosive growth beginning in early February of 2021. NFT marketplaces, such as Rarible and OpenSea, have started to see an uptick in NFT sales as both traditional VC investors and celebrities entered the NFT market.

The impending catalyst of NFTs

Speaking with Cointelegraph, Simon Dedic, managing partner of Moonrock Capital — one of the largest funds in the Polkadot industry and Web 3.0 ecosystem — said the NFT market is significantly different from where it was in 2018 when CryptoKitties saw explosive popularity.

The infrastructure supporting NFTs has rapidly improved, allowing the sector to have full-stack NFT services from marketplaces, minting platforms, trading venues, NFT financialization protocols and more, as Dedic said:

“NFT technology initially caught our interest a few years ago when CryptoKitties famously clogged the Ethereum network and became a huge topic of conversation within the space. The NFT market has now seen significant growth and interest, and there are obvious differences with this recent surge in popularity.”

NFTs are yet to see proper mainstream adoption and observe awareness from casual investors. However, Dedic noted that the improvements in the user interface, accessibility and user experience will be the components that catalyze the next impulse wave of growth for the NFT sector.

He added that “advancements in UI and accessibility are ushering in a new audience of people who may not have entered crypto before via a traditional means,” adding this is what would lead new capital to enter the NFT market.

Moonrock Capital has recently incubated an NFT project for the first time in its history after years of focusing mostly on investments in the Web 3.0 space, indicating the rise in demand for NFTs. 

For instance, Polkamon, a new NFT platform on Polkadot, saw Morningstar Ventures, Ascensive Assets and Divergence Ventures participate in the seed round, funds that typically invest in the Polkadot space and Web 3.0-related DeFi protocols. In recent months, NFT-focused funds have also emerged, indicating serious interest in the NFT market, according to Dedic:

“We are now well-positioned to focus on NFT collectibles with Polkamon, our newest incubation with Morningstar Ventures. People will be able to unpack and collect valuable, high-quality NFTs in a gamified way, restoring the nostalgia from childhood memories and providing valuable use cases for NFTs.”

Mainstream investors are stacking NFTs?

Investors in traditional venture capital, such as Gary Vaynerchuk, have also started to invest in the NFT market. In a recent interview, Vaynerchuk noted that he believes NFTs would play a key role in monetizing the web.

Vaynerchuk said that he foresees all goods, such as music, books, art and collectibles, will be tokenized, likely through NFTs. “It feels like a sea change: the blockchain, the ledgerization [or] digitalization of all goods, the way music is distributed, books, the way art and collectibles are sold, the way season tickets can be sold,” Vaynerchuk said.

Elvin Cheung, managing director at Cinchblock — a Hong Kong-based crypto investment firm and incubator — similarly said that NFTs will become a staple in both traditional finance and crypto markets. Cheung noted that Binance invested in Binance Smart Chain’s first NFT marketplace, called Refinable, which indicates strong demand from existing dominant players within the crypto space. He told Cointelegraph:

“NFTs are going to pave the future and become a staple in both the traditional and crypto markets. Once products are licensed and expelled of counterfeits on blockchain, all sorts of NFTs will accelerate the growth of the market, whether it be a piece of artwork, music or even real estate.”

Some of the biggest venture capital investors in the technology sector, such as A16z, have also started to lead major investment rounds in the NFT market. Most recently, A16z led a $23-million round in OpenSea, the biggest NFT marketplace since 2017. In a paper explaining its thesis behind its investment, A16z noted that sales volume for top NFT sources grew to $100 million per week. The firm explained:

“Today there are more than 3 million NFTs for sale, and sales volume on the top sources has grown over 400x year over year to more than $100 million per week. NFTs are breaking out to more mainstream audiences, and represent an entirely new economy based on digital ownership.”

What will be the next trend in the NFT market?

In the medium to long term, there is a high probability that some of the most recognizable global brands will directly enter the NFT market to produce NFTs with their intellectual properties. For instance, Gizmodo reported that DC, the company behind DC Comics, is exploring the sale of original DC art through NFTs.

In the foreseeable future, DC said that it is considering the distribution of original digital art “rendered for DC’s comic book publications.” DC’s comic book brands include the likes of Superman, Batman, Arkham Asylum, The Man of Steel, and The Dark Knight Returns. In the letter, DC emphasized that it is not permitted to sell DC’s NFTs featuring DC’s intellectual property without the company’s permission, which indicates the firm’s serious plans of entering into the market:

“As DC examines the complexities of the NFT marketplace, and we work on a reasonable and fair solution for all parties involved, including fans and collectors, please note that the offering for sale of any digital images featuring DC’s intellectual property with or without NFTs, whether rendered for DC’s publications or rendered outside the scope of one’s contractual engagement with DC, is not permitted.”

If the trend of global brands creating their own NFTs and issuing them through marketplaces and third-party distributors kicks off in a big way, this will set a new trend in the NFT market that could take it to actual mainstream adoption.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/milking-the-cash-cow-nfts-seen-as-investment-opportunity-by-vcs

Blockchain

Cardano Reaches All-Time High as Founder Pitches to Mark Cuban

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Cardano, the fourth-largest cryptocurrency by market capitalization, reached a new all-time high on Sunday, one day after Charles Hoskinson engaged in a conversation with Mark Cuban around the topic of Cardano’s potential.

ADA, Cardano’s token, has gained more than 60% in value over the past 2 weeks according to CoinGecko data, reaching an ATH of $2.45 on May 16th at a time when projects using Proof-of-Work (PoW) consensus protocols like Bitcoin experienced a steep drop in value.

Long seen as one of the biggest potential alternatives to the Ethereum network despite not having completed the development process, Cardano is now gaining traction as news of Tesla’s decision to stop accepting Bitcoin due to environmental concerns continue to affect projects relying on PoW.

While Ethereum will be transitioning to a Proof-of-Stake consensus protocol with the release of Ethereum 2.0, the network still uses a PoW approach that might have prevented it from being considered as a reliable alternative at this time.

This barrier should also be added to concerns about the ability of the network to escalate and operate efficiently at a time of high congestion.

Cardano’s latest releases provided developers and users with the option to create native tokens but the platform is still lacking smart contract features. The Alonzo update, which is expected to occur by the end of this month, will add smart contract support and open the doors for new uses of the network.

Hoskinson Pitches ADA to Mark Cuban Via Twitter

Mark Cuban, an American billionaire with a net worth estimated around $4.3 billion, has shown an increasing interest in cryptocurrencies such as DOGE and BTC over the past months.

The Dallas Maverick’s, an NBA team owned by Cuban, even started accepting the popular Shiba Inu-based cryptocurrency as a valid payment method for acquiring the team’s merchandise and tickets.

The entrepreneur started a Twitter discussion by asking his followers if they were” personally, able to use $ADA for anything?”, with thousands of followers quickly providing their opinions and retweeting his question.

One of such followers was Cardano’s Founder, Charles Hoskinson, who about an hour later replied with an invitation for Cuban to visit him in Colorado to chat about the project.

Hoskinson would later mention that the project has, “five million students in Ethiopia, thousands of assets issued on Cardano, a nice DApp ecosystem brewing for smart contract launch, a new VC model with catalyst, huge community.”

While Cuban seemed to find this information interesting and recognized Hoskinson’s status as an “ETH OG”, he also shared his belief that the platform was still not “there yet” in terms of applications while also mentioning the lack of smart contract functionality.

All Eyes are Set on the Alonzo Update

Like Mark Cuban, Cardano critics have been quick to point out that the network still lacks an essential aspect of blockchain technology: smart contract functionality.

This has made the Alonzo Hard Fork one of the most anticipated deployments for the network, as it will allow the network’s users to actually test the claims made by the project’s development team.

Hoskinson also Tweeted a 12-minute video in which he talked about the project’s history, goals, and status, directly addressing it to Cuban.

In the conversation with Cuban, Hoskinson replied to the concerns around Smart Contracts by tweeting:

“We rebuilt the entire smart contract model. It took four years to do it, but it’s necessary if you actually want security and scale. No more DAO hacks, less off-chain code. Consistent operating cost. Furthermore I want all devs not just solidity devs”

This smart contract model will finally be seen with the release of the Plutus Core in the Alonzo update, which the project’s developers assure will provide greater security and flexibility.

With Ethereum 2.0 also advancing on its development, the success of the Alonzo hard fork will prove to have an important impact on how the race between Ethereum and its competitors advances in the future.

Especially at a time when enterprises are paying more attention than ever to environmental-friendly alternatives to Ethereum and Bitcoin.

990

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://blockonomi.com/cardano-reaches-all-time-high-as-founder-pitches-to-mark-cuban/

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Blockchain

Crypto Companies Raised $2.5 B in First Quarter of 2021, the Highest Ever!

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2021 bull run has propelled Bitcoin, altcoins, and the whole ecosystem into the mainstream limelight as well as adoption. The growing demand for digital assets is evident from the number of mainstream financial firms adding support for cryptocurrencies as well as the number of crypto companies that have become a billion-dollar company after the latest funding round. The first quarter of 2021 saw crypto companies raise a combined capital of $2.5 billion the highest ever and nearly double of 2018 second-quarter total fundraise

Many of these crypto companies attracted funding from mainstream behemoths including Chainalysis whose valuation grew into billions after its latest funding round of $100 million that saw participation from TIME Magazine owner Marc Benioff. Apart from Chainalyis other crypto firms that raised capital to the tune of hundreds of millions in their latest funding round include BlockFi that raised a whopping $350 million in their Series D funding round and Blockchain.com which also raised $300 million to see its valuation grow to $5.2 billion.

Crypto Companies in High Demand

The multi-fold increase in valuation of several crypto companies along with the public listing of many others reflect the growing demand for not just digital assets but also for experienced service providers from the crypto space. Coinbase created history this April after it made its public debut on Nasdaq with an $80 billion-plus valuation and over 50 million registered users.

Apart from crypto companies growing demand in the mainstream market, many traditional financial firms and payment processing giants such as PayPal and Venmo with over 300 million and 70 million customer bases respectively. PayPal that was once a part of Facebook’s infamous Libra association also opened a crypto spending option for its customers across millions of its verified vendors. MasterCard and VISA have also added crypto payment support in one form or other, not to mention, only a few years back these payment processing giants were blocking crypto-related transactions via their platform.

Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coingape.com/crypto-companies-raised-2-5-b-in-first-quarter-of-2021-the-highest-ever/

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Blockchain

Bitcoin is more energy-efficient than Gold: Galaxy Digital Report

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A report from the diversified financial services firm Galaxy Digital has revealed that Bitcoin is more energy-efficient than Gold.

Digital assets investment firm Galaxy Digital has published a report detailing that Gold consumes more energy than Bitcoin. The report also notes that banking institutions average twice the energy consumption of the leading cryptocurrency.

Bitcoin has, in the past, been frequently weighed against different assets but none more than Gold. Some industry experts have even described it as the digital version of gold. However, there have been a lot of questions surrounding its energy consumption. Bitcoin’s carbon footprint in 2019 was so huge that it was compared to carbon emissions in the cities of Hamburg and Las Vegas by the Technical University of Munich.

On more than one occasion, the flagship cryptocurrency has been criticised by individuals and institutions that believe it is not energy efficient. The report from Galaxy Digital, however, seems to challenge these claims. It comes just a few days after Tesla announced it would no longer accept Bitcoin payments for its electric vehicles. The automaker cited concerns for its energy usage as rationale for the decision.

The report pointed out that while most people are eager to criticise Bitcoin, they hardly do the same to other financial industries and assets. Galaxy Digital explained that energy usage by the traditional financial industries was harder to assess because the institutions don’t submit data on electricity consumption.

The author of the report was keen to acknowledge that the Bitcoin network consumes a lot of energy, adding that the energy consumed was vital in making the network robust. According to the calculations presented by Galaxy Digital, Bitcoin consumes 113.89 TWh per year. To put this into context, the cumulative energy used by always-on devices annually in the US is estimated to be 1,375 TWh. Bitcoin’s annual electric consumption figure is about twelve times less.

In the case of Gold, the author managed to find a workaround for estimation by evaluating all the processes involved. The author arrived at a rough figure of 240.61 TWh/year, which is more than twice the figure recorded by Bitcoin.

The report considered various aspects for the banking industry, including Automated Teller Machines, card network data centers, banking data centers, and bank branches. Based on the analysis, the average power consumption was noted to be 238.92 TWh/year — slightly less than that of Gold.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coinjournal.net/news/bitcoin-is-more-energy-efficient-than-gold-galaxy-digital-report/

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