Limewire Partners With Algorand Blockchain to Launch NFT Marketplace
KEY POINTS
- Limewire's NFT marketplace will begin with a focus on digital music and art.
- The company hopes to hit 1 million unique monthly users by the end of its first year.
Limewire selects Algorand as its blockchain partner because of the company's commitment to clean energy.
Popular peer-to-peer file sharing software Limewire is partnering with Algorand blockchain to launch a nonfungible token (NFT) marketplace. Limewire plans to mint music and art projects before expanding into collectibles more broadly.
It said in a press release that the marketplace will be a one-stop shop for creators to buy, sell, and trade their work. The company also aims to have more than 1 million unique users by the end of the first year.
The NFT marketplace has become increasingly crowded as the popularity of the technology rises, and corporate entities and individual artists and creators are all using NFTs to sell their products. While Limewire will be just one of several marketplaces, the company's announcement also offers a glimpse into the future of the NFT space. Here are two of the most important things you should know about Limewire's NFT marketplace.
Energy-efficient blockchain technology
One of the biggest criticisms of cryptocurrencies is that they are bad for the environment. Many crypto farms rely heavily on electricity, most of which is still powered by coal-fired power plants.
Limewire chose Algorand because it is one of the most energy-efficient blockchains. Last year, Algorand pledged to become the most sustainable blockchain option by partnering with ClimateTrade, a leader in CO2 emission traceability. The aim is to provide the most secure proof-of-stake blockchain network without negatively impacting the planet.
Art and music are leading the NFT boom
Limewire's focus on selling art and music to start with speaks volumes about how much influence these categories have on the NFT market. According to trading data from Cryptoart.io, the total market capitalization for NFT art projects is greater than $2.1 billion, or more than 848,000 Ethereum (ETH) at the time of writing. For comparison, CoinMarketCap measures the total cryptocurrency market capitalization at just over $1.7 trillion.
The NFT market has experienced a boom over the past two years. Total NFT sales grew to more than $26 billion last year, up from more than $85 million in 2020, according to data from Chainalysis. The organization noted that new users were being attracted by the high prices that some artworks are fetching.
Transactional activity is declining
The Chainalysis report also noted that the number of NFT transactions has declined significantly since 2018. This could be due to several factors, including fraud and copyright infringement in the space. In response, Limewire may have to quickly scale out of art and music to stay relevant, despite the profitability of NFT art.
As with any cryptocurrency, investors should do their own research, and understand the inherent risk of digital assets before spending their first dollar.
Our Research Expert
Robert writes about cryptocurrencies and nonfungible tokens for Motley Fool Money. Before that, he spent more than seven years writing about everything from social policy to business and politics, and everything in between.
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