Everyone is talking about NFTs. And as always with new tech, we see interesting examples and then some that make your eyes roll back in to your head. We’re coming down from the peak of inflated expectations and people are starting to question - what is the future for NFTs? And are they just hype? It’s true that currently, the NFT market is currently very profit and hype-driven, so the question is – will they stand the test of time?
Decode it
Key takeout
An NFT (which stands for non-fungible token) is a record on a cryptocurrency’s blockchain. Let’s break that down. If something is non-fungible it means it’s unique and irreplaceable. So gold is fungible (it can be replaced by another identical item) but an original Picasso painting is non-fungible, because there is only one. When we bring this into the digital sphere, it just means that an NFT is a record that authenticates that a digital asset is unique and authentic (this could be anything from a song, to an image to a video). A common misconception is that the NFT is the asset, but it’s not it’s the certificate.
Level-up
The truth is, the human behaviour of ownership and trading valuable assets is not new. From kid’s football cards to vintage cars – the human desire to own and collect has shown to be timeless and true across all ages. The bit that is new and exciting is the tech and the opportunities that the tech makes possible.
We think NFTs will stand the test of time, but only when they have real utility. Currently, all you can do is trade your asset, or watch it exist in the digital space. It’s only going to get really exciting when you can buy digital assets and do something with them in ‘the metaverse’ - like in gaming, or use them to unlock in real-life experiences as we begin to see the digital and physical worlds blend. We are seeing brands making moves towards creating NFTs that elevate community experiences and provide utilities, like The Chainsmokers holding NFT gated festival and afterparty and Stock X using NFTs to provide fans with access to exclusive products and experiences.
Yet, until the metaverse is more mature and developed, we won’t see true utility. It will be interesting to see who provides utility first, the tech giants or the new wave creatives. Many say people will go to where their friends are like we’ve seen with WhatsApp, Facebook, and Instagram – but the Web3 means the decentralisation of everything -DAOs will turn audiences into communities - to engaged and involved decision. So it’s not for one person or group to have the answer.
