A new study from Juniper Research has found the global number of NFT (Non-fungible Token) transactions will rise from 24 million in 2022 to 40 million by 2027.
This is based on our medium scenario for adoption, with brands leveraging the metaverse to boost digital growth. It cautioned that although NFTs present a new channel for growth, vendors must be cognizant of the risks of operating in an unregulated environment home to fraudulent activities and scams.
An NFT is a unique token that exists on the blockchain, meaning it cannot be replicated. This unique token could represent real-world items like artworks or music, with the ability to be traded with a transparent transaction history.
Juniper Research’s NFTs (Non-fungible Tokens) research provides a highly detailed evaluation of current industry developments, including emerging Web 3.0 use cases, and analyses the most influential drivers and challenges that stakeholders may face over the coming years.
The research also outlines the technical mechanics behind the implementation of NFTs across 7 key segments – outlining the business cases, revenue models, and target audiences that are driving the market using models and case studies. These segments are:
Major Concerns Regarding Environmental Impact and Scams
The report stresses that vendors who partake in the NFT space may risk brand damage by association, due to the role NFTs have had in illegal activities, such as money laundering, scams, and fraud. Environmental issues were also raised as a major concern, with the current way transactions are facilitated on the blockchain creating massive energy usage.
It emphasized the need for regulators to work with industry bodies to standardize processes with reduced environmental impact and built-in consumer protections to enable vendors to utilize NFTs as a medium to further engage with consumers.
Metaverse to Be a Redeeming Factor to the Long-term Success of NFTs
The report predicts metaverse-linked NFTs will be the fastest-growing NFT segment over the next 5 years; increasing from 600,000 transactions in 2022 to 9.8 million by 2027. It highlights the rising demand for immersive experiences as a driver of metaverse adoption.
To capitalize on this growth, the research urges consumer-facing businesses to create NFT-based content to meet changing demands from a younger, tech-savvy demographic, who are more ready to purchase novel forms of online and digital content.