Are NFTs dead? “OMG”! what is its future

Non-fungible tokens, often known as NFTs, have recently gained popularity on the financial arena. Are NFTs dead? is a popular question being asked right now. This blog post will examine the growth of NFTs, their influence on the markets for art, collectibles, and digital assets.

Introduction of NFTs:

Definition of NFTs and their emergence-

NFTs stand for ‘Non Fungible Tokens’. These are digital assets which are based on blockchain technology. Now one question arises in your mind that what is meaning of Fungible tokens. So, let’s discuss it first, in simple words it is defined as digital tokens which are interchangeable and have fixed value. Each unit has the same worth as money and can be exchanged for another one that is the same kind and value. Example cryptocurrency like Bitcoin etc.

Unlike fungible tokens, these NFTs don’t have same value. Each NFT is unique and it represents a specific asset. These digital assets can be in the form of digital art, a collectible item or a virtual real asset.

NFTs have attracted famous buyers and collectors and have been used to sell everything from digital art to virtual real estate. Traditional markets have been disrupted by the rise of NFTs. Also this new market has created a lot of opportunities for buyers and sellers, with opportunities some challenges also has to be faced.

The hype & popularity of NFTs in recent years-

NFTs have experienced tremendous growth in popularity and buzz recently. This is because of a number of things. For example, NFTs give digital creators a fresh and original opportunity to commercialize their work. Before the development of NFTs, it was challenging for digital artists and content producers to make money off of their works because they could be simply duplicated and disseminated without credit or payment.

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Also, buyers can confirm ownership and authenticity with NFTs, which is crucial in the digital era. It might be challenging to identify the genuine source of a specific piece of content due to the abundance of content available online. NFTs use blockchain technology to offer an unchangeable record of ownership and provenance, which solves this issue. NFTs have also been accepted by the cryptocurrency community, which has increased their popularity. NFTs have gained well-known collectors and buyers as a result, with some NFTs fetching millions of dollars at auction.

The hype of NFTs came into rise also with increase of platforms and marketplaces. These platforms and marketplaces are designed specially for buying and selling NFTs.

The Rise of NFTs:

History of NFTs-

NFTs was firstly created in year 2015 on Ethereum blockchain. Ethereum blockchain was specially designed to provide a platform for building decentralized applications and smart contracts. This initiative has opened a gate of opportunities and possibilities of creating digital assets like NFTs which are unique and can traded on the blockchain platform.

The first use case of NFT was a game based on blockchain, it was commonly known as ‘CryptoKitties’. ‘CryptoKitties’ was developed by Dapper Labs, a Canada based studio. This game allowed its player to buy, sell and create virtual cats in the form of NFTs. Each cat was represented by unique a NFT. The game immediately became popular and highlighted NFTs’ ability for producing unique digital assets.

After the success of ‘CryptoKitties’, NFTs started to be used in other areas like digital art, collectibles, and virtual real estate. In year 2019, artist named Mike Winkelmann, also known as Beeple, sold the most expensive digital artwork for $69 million. And that was the most expensive NFT ever sold at the time.

Since then, a variety of sectors and producers have embraced NFTs as their use has grown in popularity. The NFT market boomed in 2021, with record-breaking sales and widespread media coverage.

Benefits of NFTs-

There are many benefits of NFTs. Some of them are:

• Verifiable ownership and authenticity: NFTs provide a very secure and transparent way to verify the ownership and origin of digital assets. And this verification of ownership of NFTs is possible because each NFT has a unique identity on the blockchain network. And some of the important information like who is the owner, creation data and transaction history are stored in a public ledger. This makes it very easy to verify ownership and authenticity of digital assets, and it also helps to prevent fraud and copyright infringement.
• Monetization of digital assets: NFTs give digital creators a fresh means of monetizing their work. This is especially advantageous for artists and content producers who have historically struggled to monetize their digital works. Creators can establish ownership and a fair market value for their work using NFTs and sell it straight to consumers. The ability to get royalties each time an NFT is resold on a secondary market makes NFTs an additional source of ongoing income for artists.
• Unique and rare assets: NFTs may stand for unique or limited-edition digital assets, which can increase their value and demand. This is so because each NFT is distinct and stands for a particular item, like a particular work of digital art or an expensive collectible. Due of this, NFTs may be especially appealing to collectors, who are interested in owning rare and unique assets.

Examples of some successful NFT sales-

Now in this section, we are going to see some of the top successful NFT sales.

1. CryptoPunks: CryptoPunks is a collection of 10,000 unique 8-bit pixelated character art. There were firstly created by Larva Labs. Each set CryptoPunks have its unique characteristics and traits (properties). One CryptoPunk sold in a Christie’s auction for a record-breaking $69 million in May 2021. Opensea and Mintable are some of the biggest marketplace where you can buy and sell CryptoPunks and other NFTs.
2. NBA Top Shot: Fans can purchase, sell, and trade officially licensed NBA highlights on the platform known as NBA Top Shot as NFTs. A LeBron James slam NFT on the platform sold for $208,000 in February 2021.
3. First tweet from Jack Dorsey, CEO of Twitter: “Just setting up my twtrr,” the first tweet Jack Dorsey ever sent, was sold as an NFT for $2.9 million in March 2021.
4. “Crossroad” by Trevor Jones: A piece of NFT art called “Crossroad” by artist Trevor Jones was auctioned for $6.6 million in February 2021. That art covered an image of former US President Donald Trump lying on the ground and surrounded by graffiti and trash.
5. Beeple’s “Everydays: The First 5000 Days“: The First 5000 Days”: In March 2021, digital artist Beeple sold his NFT artwork, a collage of 5,000 individual images he created every day for over 13 years, for a staggering $69 million at a Christie’s auction, making it the most expensive NFT artwork ever sold.
6. Grimes’ “WarNymph”: Musician Grimes earned $6 million through the sale of a group of NFTs based on her digital compositions and artwork in February 2021.
7. “The Pixel” by Pak: In March 2021, artist Pak sold a single pixel as an NFT for 1,415 ETH (equivalent to around $1.5 million at the time). The pixel was part of a larger artwork called “The Fungible.”

Read More: How to make money with cryptocurrency in 2023

Criticisms of NFTs:

Now we are going to see some criticisms of NFTs. Some criticisms like Environment impact of NFTs, Lack of inherent value in digital art, Potential for fraud and also the over saturation of the NFTs market.

Impact of NFTs on our environment-

One of the major concerns of many people is “What is the environmental impact of NFTs”. NFTs are digital assets which are created and stored on blockchain networks, and it requires a good amount of energy to operate. Minting is the process by which the NFTs are created. It requires complex cryptographic algorithms that need a lot of processing power. High-end computers, which use a lot of energy, frequently supply this computing power.

Concerns concerning the carbon emissions linked to the creation of NFTs have arisen due to the amount of energy needed to produce and transmit them. A single NFT transaction on the Ethereum blockchain can use more energy than the typical American home uses in a month, as per a study by digital artist and researcher Memo Akten. According to the study, an NFT’s total carbon emissions throughout production and sale can range from 50 kg to more than 200 kg of CO₂.

Lack of inherent value in digital art-

NFTs have been criticized for lacking inherent value. Some contend that NFTs are only digital files with no inherent value, and that their value is solely determined by how much people are willing to pay for them. Digital art can be easily duplicated and existing only in the digital space, as opposed to physical art, which can be valued for its palpable features like texture and color.

Additionally, the customer does not automatically acquire ownership of the underlying piece of art or intellectual property rights by purchasing an NFT. In many instances, the artist keeps control of the original piece and merely produces an NFT as a means of generating income from their work. This has raised concerns regarding NFTs’ actual worth and whether they are more of a speculative investment than a useful asset.

Notwithstanding these objections, NFT proponents contend that they present a novel perspective on authenticity and ownership in the digital age. NFTs make it feasible for artists to market their work in a way that wasn’t previously conceivable by producing a distinctive and verified digital asset. Additionally, the NFTs’ blockchain technology ensures that ownership and validity can be validated, offering a level of security and transparency that wasn’t before possible.

In the end, the value of NFTs depends on the viewpoints of the buyer and seller. NFTs may be seen by some as merely a speculative investment, but others may consider them a method to help artists and develop a new form of digital art market.

Over-saturation of the market-

The oversaturation of the market is a different criticism levelled towards NFTs. Some contend that the market has grown oversaturated with possibilities as more and more artists and creators enter the NFT field, making it challenging for individual artists to stand out and for customers to navigate the market.

The abundance of NFTs has also led to concerns about the quality of the art being sold. With so many options available, buyers may not take the time to properly evaluate the art they are purchasing, leading to a proliferation of low-quality or derivative work. This has the potential to devalue the entire NFT market and undermine the credibility of digital art as a whole.

In addition, an increase in fraud and scams has been brought on by the use of NFTs. Some dishonest people have taken advantage of the excitement surrounding NFTs to market false or stolen artwork to unwary customers. To safeguard both artists and customers, calls have been made for increased regulation and control of the NFT industry.

Notwithstanding these worries, many think that the NFT market’s oversaturation is just a short-term problem that will eventually go away as the market develops. It is expected that the quality of the art being sold will improve and fraudulent behavior’s will decline as more purchasers are informed about the worth of NFTs and more reliable artists and platforms enter the market.

Potential for fraud-

The likelihood of fraud is one of the issues with NFTs. NFTs are a very new and unregulated business, thus there is a chance that dishonest people could take advantage of gullible customers.

The sale of false or stolen artwork is one way that fraud could take place. It can be challenging to confirm the validity of the artwork being sold because NFTs are digital assets. Because to this, there have been instances of people selling fake artwork or making NFTs of other people’s works without their consent.

The employment of dishonest or fraudulent marketing techniques is another method fraud could happen. Even when there are several copies of the same piece of art being sold, some NFTs may be advertised as unique or rare. Customers may be led astray and overpay for the artwork as a result.

Some NFT markets are putting policies in place to boost transparency and safeguard customers in order to allay these worries. For instance, while some platforms use blockchain technology to establish a permanent record of ownership, others need artists to show proof of ownership and the validity of the works of art being sold.

In the end, it is the responsibility of the buyer to exercise caution when buying NFTs and to perform their thorough research before doing so. Buyers can reduce their chance of falling victim to NFT fraud by investigating the artist and platform, confirming the legitimacy of the artwork, and being suspicious of offers that appear too good to be true.

The Future of NFTs:

Many people are expecting that NFTs will alter the manner in which we see digital ownership and authenticity, the future of NFTs is yet unpredictable and unknown.

NFT application for real-world assets, like real estate or equities, is one potential development area. NFTs may facilitate the purchasing, selling, and transferring of ownership of these assets by leveraging blockchain technology to provide a tamper-proof record of ownership.

The application of NFTs for social impact is another potential growing area. NFTs are being used by certain artists and makers to promote social justice campaigns or collect money for humanitarian purposes. These projects may contribute to the development of a more just and sustainable future by employing NFTs to establish a direct link between the customer and the artist.

It is conceivable that additional use cases and applications will appear as the NFT industry develops and grows. Yet, it is equally critical to take into account the possible ethical and environmental consequences of this technology and to move towards more egalitarian and sustainable alternatives.

Some experts think that NFTs might be utilized to develop new kinds of digital media and entertainment in addition to these prospective development sectors. NFTs might be utilized, for instance, to provide novel, interactive gaming experiences or to make new kinds of virtual reality and augmented reality material possible.

NFTs may potentially have an impact on the future of memorabilia and collectibles. NFTs may help provide a safe and verifiable record of ownership for digital things as more individuals develop an interest in collecting them, such as rare in-game items or virtual trading cards.

NFTs’ future ultimately depends on how creators, consumers, and marketplaces use and accept them. It will be crucial to take into account the possible advantages and hazards of NFTs as technology develops and matures, and to strive towards a more sustainable and fair future for digital ownership and authenticity.

Conclusion:

The current state of NFTs-

NFTs are now seeing fast development and experimentation. High-profile sales and auctions have made NFTs a popular issue in the art world, music business, and beyond. Yet, this expansion has also given rise to queries and worries about the effects of NFTs on the environment, the possibility of fraud, and the absence of intrinsic value in digital art. Yet, NFTs have demonstrated the ability to transform the way we think about digital ownership and authenticity, opening the door for fresh and cutting-edge use cases and applications. It will be crucial to take these issues into account as the market for NFTs develops and strive towards a more responsible and sustainable future for this technology.

Implications for the future of the digital art market-

The consequences are profound and far-reaching for the future of the market for digital art. The ability to validate and transfer ownership of digital works using NFTs has the potential to completely alter the way we think about digital art. New sources of income for artists as well as new business prospects for investors and collectors might result from this.

Final thoughts on the question “Are NFTs Dead?”-

NFT trading volume spiked to $2 billion after failing to surpass $1 billion in the previous 7 months. Source: Dapp Radar

That means the answer for the question “Are NFTs Dead?” is No, NFT market is not dead yet. [Ref..]

There is 5 arguments that support our statement that “NFT market is not dead yet”–

1. Inflation crashed NFT prices but didn’t kill them: Inflation’s role in crashing NFT prices doesn’t reflect the potential of the market. In fact, interest in NFTs is only growing. Companies are looking to adopt NFTs for broader commercial purposes. Once NFT technology becomes mainstream, prices are sure to soar.
2. Bored Ape NFTs are still trending: One of the most well-known NFT examples on the market is the Bored Ape Yacht Club. Two years ago, the art collection with 10,000 programmable cartoon apes exploded in popularity. One Bored Ape brought in $3.4 million, and another brought in $1.7 million in 2022.
3. 4. Elon Musk bought Twitter: The NFT community is especially thriving on Twitter. The platform has been one of the most supportive in integrating NFT technology. In early 2022, Twitter announced a new account feature – NFT profile pictures. Subscribers of Twitter Blue can show off their NFTs in a hexagonal profile frame. The premium subscription also grants users verification and a blue checkmark. This provided NFT enthusiasts with a convenient platform to discuss NFTs. CEO of Tesla, SpaceX, and other companies,  Elon Musk, recently added CEO of Twitter to his list of titles. In October 2022, Musk finalized his takeover of the platform, worth $44 billion.
   • It’s possible that Twitter will become a marketplace for NFTs. The feature, called NFT Tweet Tiles, is still in development. It will allow users to display, sell, and buy NFTs through tweets. To do so, Twitter will partner up with four other NFT marketplaces:
     • Solana
     • Rarible
     • Dapper Labs 
     • Magic Eden
4. The biggest companies in the world are still investing in NFT tech. Like Nike, Meta, Twitter etc.
5. Gaming industry and NFTs are evolving together: NFTs and the gaming industry are definitely coevolving, with many creators and players seeing the advantages of incorporating NFTs into games. The ability to design uncommon and distinctive in-game products that players can really possess and exchange with other players is one of the main benefits of employing NFTs in gaming. This allows for the creation of a more lively and dynamic gaming economy.