Coinbase has made its reputation as an authority in non-fungible tokens. Last week, the team at the largest cryptocurrency exchange in the U.S. announced that it’s launching its own marketplace to create, sell, trade, and display non-fungible tokens or NFTs for short.

NFTs, which are both digital assets and certificates of authenticity de facto verifying an asset’s authenticity, are unique. Since 2012, NFTs are bits of code that can be used to program a variety of physical and digital things. By design, NFTs are immune to counterfeiting or shady shenanigans because they’re programmed on a blockchain – which is a secure, tamperproof, distributed network.

We didn’t hear much about them until 2017 with the launch of the digital trading card collections, CryptoPunks and CryptoKitties – they have since become big business. Nonfungible.com reports that NFT sales in 2018 topped $40M, with a projected increase of more than 338M in 2020. Select NFTs were sold this year for over $50 million.

NFTs are more than novelty files and have a lot of utility. NFT technology is more than just collectibles. It could also be used to manage and protect health records. NFT technology can help us settle contracts, handle immigration issues, secure identities, make payments, provide social spending assistance, as well as facilitate voting in elections. Coinbase (NASDAQ 🙂 recognizes these potential uses and wants to position itself as the NFT leader.

Coinbase is the market leader in NFT. There are currently more than 2 million people on the waitlist for Coinbase NFT. This number will likely grow, as Coinbase publicly stated that they have 8.8 million users per month and 68,000,000 verified users. DappRadar estimates that OpenSea, the largest NFT marketplacespace, currently has 261,000 users per month. These numbers are so lopsided that Coinbase is likely to do to OpenSea what Facebook did to MySpace (NASDAQ:).

Flipside

• Coinbase may be the largest crypto-sphere gorilla at 800 pounds. Coinbase’s move into NFT will cause shockwaves in the way NFTs are made, sold, displayed, and used once they have been launched.
• The irony of this announcement is that the expected dominance of Coinbase could highly centralize the future of NFTs – centralization runs contrary to crypto’s underlying decentralized philosophy.

Why you should care

All aspects of your life can be affected and infiltrated by NFTs. Crypto diehards will have to be vigilant that no single entity – whether a public company or government – gains too much control over that critically important area.

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