A new study from Juniper Research on Monday has found that 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 Juniper Research’s medium scenario for adoption, with brands leveraging the metaverse to boost digital growth. The study cautioned that although NFTs present a new channel for growth, vendors must be cognisant to 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 that 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.
Environmental Impact and Scams
The study stressed 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 emphasised the need for regulators to work with industry bodies to standardise processes with reduced environmental impact and built-in consumer protections to enable vendors to utilise NFTs as a medium to further engage with consumers.
Metaverse Long-term Success of NFTs
The report predicted that 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 rising demand for immersive experiences as a driver of metaverse adoption.
To capitalise on this growth, the study urged 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.
Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.
Dubai’s Metaverse Strategy
The Dubai has already announced its metaverse strategy which aims to turn Dubai into one of the world’s top 10 metaverse economies as well as a global hub for the metaverse community.
The strategy aims to build on Dubai’s achievement of attracting more than 1,000 companies in the fields of blockchain and metaverse. It also promotes Dubai’s ambitions to support more than 40,000 virtual jobs by 2030.
This would further boost Dubai’s economy and support the UAE government’s vision of increasing the number of blockchain companies by five times the present number.
The technology pillars of the metaverse strategy are data, network, cloud, and edge computing that focus on real-world data obtained, validated, stored, processed, and managed. Other pillars include promoting the full deployment of 5G networks to enable edge computing and provide on-demand computer system resources. Edge computing allows data to be collected, stored and processed locally via smart devices and local networks, instead of the cloud.