Non-fungible tokens have been swept up in the cryptocurrency crash as sales reached a 12-month low in June.<\/p>\n
NFTs confer ownership of a unique digital item \u2013 often a piece of virtual art \u2013 upon someone, even if that item can be easily copied. Ownership is recorded on a digital, decentralized ledger known as a blockchain.<\/p>\n
Sales of NFTs totaled just over $1bn (\u00a3830m) in June, according to the crypto research firm Chainalysis, their worst performance since the same month last year when sales were $648m. Sales reached a peak of $12.6bn in January.<\/p>\n
\u201cThis decline is definitely linked to the broader slowdown in crypto markets,\u201d said Ethan McMahon, a Chainalysis economist.<\/p>\n
\u201cTimes like this inevitably lead to consolidation within the affected markets, and for NFTs we will likely see a pullback in terms of the collections and types of NFTs that reach prominence.\u201d<\/p>\n
The cryptocurrency market, worth about $3tn last November, is now worth less than $1tn.<\/p>\n
NFTs rely on a blockchain \u2013 the decentralised ledger first used by bitcoin to track ownership of the cryptocurrency \u2013 to record who owns them and allow them to be traded. Most are based on the Ethereum blockchain, which is maintained through a carbon-intensive system called proof of work.<\/p>\n
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