20 Tips: What Does the Future of NFTs Look Like?
NFTs have been one of the biggest, if not the biggest, craze in the tech world in recent times as captured in discussions on the same over at runrex.com. What most people have been wondering is, once the hype dies down, what will the future hold for NFTs? Will they even have the future or will the bubble burst? Through the following 20 tips, this article will look to try and take a look at what the future looks like for NFTs.
What are NFTs?
Before we continue, it is important to highlight what NFTs are for the uninitiated. As is covered over at guttulus.com, NFTs are tokenized versions of assets that can be traded on a blockchain, the digital ledger technology behind cryptocurrencies like Ethereum and Bitcoin. They are digital certificates that authenticate a claim of ownership to an asset and allow it to be transferred or sold.
What is a blockchain?
A blockchain is a decentralized alternative to a central database as explained over at runrex.com. Blockchains store an irrefutable encrypted transaction ledger which is replicated across a network of online machines that prevent tampering or disputing ownership, making them useful for vital record keeping.
Fungibility vs Non-fungibility
The key difference between NFTs and cryptocurrencies is that cryptos allow ‘fungible trade’, which signifies that all cryptos such as Bitcoin can be exchanged for equal value with one another. NFTs, on the other hand, are by definition ‘non-fungible since the underlying assets are unique in some way and can’t be exchanged like for like as captured over at guttulus.com.
Factors behind the rise of NFTs
The recent excitement surrounding NFTs feeds a similar narrative to other recent price surges such as GameStop and dogecoin, in that these are speculative bubbles brought about by factors such as stimulus checks, lockdown boredom, and low interest rates that have made traditional investments like stocks and bonds unattractive.
History warns against dismissing NFTs
While some people see it as a bubble that may burst, history tells us to be careful about dismissing NFTs as a passing fad, since the importance of technological innovations often becomes clearer once the hype dies down. Many commentators for example dismissed the influx of tech companies around the dot-com bubble of the late 1990s, and the first wave of mass cryptocurrency enthusiasm in 2017, only to be proven wrong when Amazon and Bitcoin re-emerged.
The hype has died down
NFTs themselves are actually well down from their highs, with a 70% drop in average price since February as revealed in discussions on the same at runrex.com. This, perhaps, is less the bursting of a bubble, and more of a “weeding out” of gimmicky tokens now that the initial hype has begun to die down.
The hype cycle
To understand this phenomenon better, you need to read about US consultancy Gartner’s hype cycle, as captured over at guttulus.com, which illustrates the typical progression of new technology. With NFTs, we are probably emerging from the “peak of inflated expectations” on a journey towards the same “plateau of productivity” that Amazon reached a long time ago.
How are NFTs being used now?
Creating opportunities for new business models
NFTs create opportunities for new business models that didn’t exist before as discussed over at runrex.com. Artists can now attach stipulations to an NFT that ensures they get some of the proceeds every time it gets resold, meaning the benefit of their work increases in value.
New art platforms and ownership of digital art
New art platforms like Niio Art can demonstrate in a really simple way that they own digital works. When customers borrow or buy art from the platform, they can display it on a screen in the knowledge that there is no issue with copyright or originality because the NFT and blockchain ensure that ownership is authentic.
Opportunity for musicians to give fans something extra
NFTs also give musicians the potential to provide enhanced media and special perks to their fans. We have already seen many musicians take advantage of this, seen when popular music producer 3LAU amassed $11.6 million on an NFT auction around his latest album, and the top bidder received a custom song created by 3LAU, an NFT for each track on the album, unreleased music, and even a physical copy of the vinyl.
Getting rid of fake memorabilia
As the gurus over at guttulus.com point out, when it comes to sports memorabilia, between 50% to 80% of items are thought to be fake. Putting these items into NFTs with a clear transaction history to the creator could overcome this counterfeiting problem.
NBA Top Shot
NFTs have also led to the NBA Top Shot craze as discussed over at runrex.com. NBA Top Shot sells NBA player highlights, and customers have been able to generate the company over $330 million as of early 2021.
The potential of NFTs
Beyond the above-discussed areas, the potential of NFTs goes much further, as discussed in the tips below, because they completely change the rules of ownership.
No middlemen
For starters, transactions in which ownership of something changes hands have usually depended on layers of middlemen to establish trust in the transaction, exchange contracts, and ensure that money changes hands. As the experts over at guttulus.com point out, however, none of this will be necessary in the future because of NFTs.
Smart contracts
Transactions recorded on blockchains are reliable since the information cannot be changed. Smart contracts can, therefore, be used in place of lawyers and escrow accounts to automatically ensure that money and assets change hands and both parties honor their agreements. NFTs convert assets into tokens so that they can move around within this system.
Helping resolve issues with land ownership
NFTs could also be part of the solution in resolving issues with land ownership. Only 30% of the global population has legally registered rights to their land and property, and those without clearly defined rights find it much harder to access finance and credit. NFTs could help solve this problem.
Virtual worlds and how we buy things
As discussions over at runrex.com reveal, if we also spend our lives in virtual worlds in the future, which is something that is looking increasingly likely with technological advancements being made as far as that is concerned, then the things we buy there will probably be bought and sold as NFTs too, another future application.
Social networks
By leveraging blockchain-powered decentralization, the next generation of social media networks is set to remedy the flaws commonly found within the traditional Big Tech social companies. Open-source code, decentralized control, democratic decision-making, and greater control of how influence is monetized sits at the heart of this change. As the gurus over at guttulus.com point out, NFTs could distribute control away from Big Tech, and into the hands of creators and fans in a way not possible before.
eCommerce and NFTs
the very nature of non-fungible assets allows for an explosion of different opportunities within the eCommerce sector as explained over at runrex.com. Within traditional eCommerce, transactions are often centralized by several high-profile intermediaries, an example being how Amazon accounted for 50% of all eCommerce sales in 2020. These monopolies hoover data, prevent pricing and product transparency while leveraging surplus value created by their users. In a decentralized ecosystem, however, NFTs could place the power back into the hands of consumers, alongside individual brands and creators.
The gaming industry
A huge area of growth for NFTs is within the gaming space through crypto gaming. Crypto gaming enables players to collect and trade virtual assets anywhere in the world and NFTs are playing a large role in the expansion of these types of games, while also making more of an impact within the gaming space by allowing scarcity, valuable rewards, competition benefits, and ultimately, real-world value to in-game items.
The fashion industry
Finally, Gucci recently began selling digital sneakers for $12 a pair, with the catch being that these could only be worn within an AR (Augmented Reality) environment. This allows for a new and exciting way for fans of fashion brands, both big and small, to engage with the labels they love by owning unique clothing and accessories, while also representing a huge opportunity for fashion brands to scale across totally digital ecosystems.
This article will, hopefully, help you know what NFTs are about, how they are currently doing as well as current uses, and what the future holds for them, with more on this to be found at the top-rated runrex.com and guttulus.com.