Since their introduction in 2015, irreplaceable tokens (or NFTs as they are better known) have grown rapidly, disrupting the art world and other industries while generating significant revenue.
Essentially, NFT allows you to buy and sell ownership of unique digital items, such as paintings, GIFs, emojis, songs, collectibles, etc., while using the blockchain to track who owns them.
By far, Ether has been the most commonly used cryptocurrency for trading NFT because of its dual role as a native asset hosting the vast majority of decentralized applications and NFT's blockchain platform (Ether).
However, while some investors have no problem using cryptocurrency to trade NFT, it may not be the best option for others who prefer to use fiat currency.
As a result, some potential investors have been looking forward to buying and selling NFTs using fiat currency, keeping in mind that this emerging initiative could be the next big thing for the art and collectibles market. More importantly, by integrating fiat payment options, the average buyer will be able to seamlessly access the NFT market regardless of their master chain.
Great support for legal tender
Not surprisingly, investors and professionals in the cryptocurrency and NFT space support the use of fiat currencies (e.g., the U.S. dollar) as an alternative payment method for the NFT market.
For one reason, this would mean more mainstream adoption, as such an industry move could attract most of the interest from traditional markets, where most participants prefer to use fiat currencies rather than any cryptocurrency. But where do these changes come from?
Global payments company MasterCard recently reached an agreement with Coinbase where customers will use MasterCard credit and debit cards to make purchases on the cryptocurrency exchange's upcoming NFT marketplace. Coinbase finally understands that bringing fiat currency into the system will reduce the friction in the NFT purchase process.
Similarly, NFT platforms such as Rarible now allow users to purchase NFTs using a credit card. Rarible has enabled this feature in over 190 countries, making it easier for people interested in NFTs to access them without going through the otherwise laborious process of buying and holding cryptocurrency.
Like Mastercard, other payment solution companies are following suit. For example, Moonpay allows users in more than 160 countries to seamlessly purchase NFTs directly in any market using the legal payment method of their choice, such as a credit or debit card.
The OpenSea NFT Marketplace also plans to offer its customers the space to purchase NFTs or upload NFTs using legal tender.
While the benefits are endless, using legal payments will make it less difficult for novices to purchase NFTs. In contrast, moving Ether from an exchange to a Web3 wallet and then buying NFT is a process that is often costly and can be prohibitive for newbies.
Need to reduce or eliminate gasoline fees
Currently, the Ethernet network is the most expensive blockchain to transact and build in terms of Gas fees. To paint the perfect picture, in May 2021, the Ethernet network fees increased by a staggering 470% to a record high.
While the cost of gas to create an NFT project does not guarantee any return in the long run, it becomes more challenging for most people to make a significant investment in this area.
Buy and sell NFT without cryptocurrency
Most NFT marketplaces require you to open a digital currency package, buy a cryptocurrency asset such as ethereum, and then use it to buy NFT. That said, things are shifting differently with the addition of fiat currencies.
For example, Coinbase will allow users to buy and sell NFT without using cryptocurrency. However, the purchaser will still need a digital currency package to store the NFT after the purchase.
In addition, Coinbase's partnership with MasterCard will allow cardholders to make purchases via credit and debit cards. To their credit, buying and selling NFT will now be inclusive and a walk in the park.
In short, the use of fiat currencies in the NFT market will break down the division between those who prefer cryptocurrencies and those who do not.
Previously, users who didn't like cryptocurrencies rarely participated in the NFT market, but with the latest developments, things will start to take a new turn and bridge the gap for traditional investors.
Disclaimer: The views and opinions expressed by the authors should not be considered as financial advice. We do not provide advice on financial products.