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nfts are not dead. Its potential is simply different from what was originally embodied by the epic rise and fall of the PFP market in 2021. Profile pictures, digital art, and collectibles are just some of the basic use cases for non-fungible tokens, a form revolutionary digital asset in which, unlike cryptocurrency tokens, each element is unique and generally cannot be seamlessly replaced by another.
Unfortunately, the concept of nfts has been conflated with expensive JPEGs due to the nft craze of 2021 which not only hurt cryptocurrencies in general and nfts in particular terribly, but in retrospect, was extremely silly. Therefore, just one year after the initial boom, trade volumes nft-statistics/” target=”_blank” rel=”nofollow”>sunken more than 90%.
The runaway speculation on nfts was a human problem, not a technological problem. The situation was similar to many precedents, for example, baseball card collecting in the 80s. By purchasing packs or boxes at a time, you would pay very little for a lot of cards per unit, and only a few would end up being worth any amount. significant amount of money in the long term.
Generally, collectibles such as sports cards, music albums, and popular memorabilia begin life as “one of many,” all of which have a low cost/value and no one can really predict which ones will be worth anything in the future. .
Zoo animals worth millions of dollars
Naturally, in 2021, everyone got caught up in lockdown fever and many lost their sense of proportion: they paid an inflated seven figures for digital zoo animals. And of course, some degenerates and celebrities sought out expensive PFPs precisely because they were expensive and they wanted to be flexible. nfts quickly became a status symbol, representing the (supposed) wealth of their owners.
The idea of paying huge sums of money for newly released digital collectibles in the hope that they would increase in value was ridiculous. It's no wonder now that if you mention to a normal person that nfts are useful and will form an important part of the future digital economy, they will probably laugh at you. All they remember is that people paid stupid amounts of money for “art” that a kid could make in MS Paint.
Breaking the fundamentals
The image of nfts was severely damaged in the view of the general public and has not recovered along with the majority of the market. It's a real shame because nfts, as a vehicle for digital ownership, had real potential to attract masses of new users to the web3.
To appreciate the potentially transformative power of nfts, it's important to first base your thinking on the fundamentals.
An nft is a data structure for modeling data that has unique properties.
People's lives are increasingly moving into the digital space, so it should come as no surprise that there are ultimately digital-native assets that people want to own.
Modern property
In the web2 world, ownership of anything digital is meaningless because it is so easy to copy and/or share. (Looking at you, meme lords are wearing out the 'save as' shortcut on their keyboards.) To mitigate this, content owners will often employ common web2 digital rights management barriers, such as paywalls, encryption, or simply restrict access. But in the end, this added friction only makes it harder to share with the creator's audience and keep their attention.
This is where nfts come in. Its use cases are limitless: not only to create digital representations of physical things (real-world assets), but also to express ownership of digitally native things.
However, it is important to understand what rights are actually conferred on the owner of an nft. Is your nft a digital representation of your ownership of a physical Picasso painting? Does your nft only give you the right to display the digital art itself? How about the right to print t-shirts with the art and collect royalties on sales? This is an area that will require a lot of consideration to get right. If nfts start coming with ten pages of license agreements in fine print, that will certainly take the fun out of them.
Utility beyond PFP
Beyond solving the problem of digital ownership, nfts can also have all kinds of utilities: exclusive access to members-only events, collateral for loans, DAO voting rights, representations of positions in DEX Liquidity Pools, etc., which makes them an incredibly useful tool. powerful tool for creators. These uses may have absolutely nothing to do with art, and nfts may operate in the background as vital components that power complex protocols.
Often, non-crypto natives fail to distinguish the technology from the asset, leaving blockchain to be blamed for the stupidity or nefarious behavior of humans. Regardless of the rock bottom prices of the infamous PFP collections, nfts are not dead at all; their innovation is simply overlooked. In fact, you might be surprised at how much nfts support the RWA revolution happening right now in the blockchain sector.
