More On: NFTs
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Sceptics' lack of comprehension should not dampen our enthusiasm for NFT.
For the past few months, NFTs (or Non Fungible Tokens) have been on everyone's lips. From Givenchy to the NBA, everyone is getting in on the action. Their widespread acceptance has become so rapid and substantial that Collins Dictionary named the term the word of the year for 2021 last year.
However, just because we've been discussing NFTs doesn't indicate that everyone is on board with the idea. The fact that 9 of the top 10 NFT sales in the last 30 days (at the time of writing) were Bored Apes or Cryptopunks — the two kings of NFTs — demonstrates that the wider NFT market has yet to capture the public's imagination. If you've read about NFTs in the news, it's likely that the article featured a Bored Ape or a Cryptopunk. A bundle of 101 Bored Ape NFTs sold for $24 million last year, and a Cryptopunk resold for roughly $12 million at Sotheby's. Despite the fact that new NFT projects are being launched on a daily basis, legacy tokens with established resale value continue to reign supreme.
The way the media has portrayed NFTs as speculative investments for the wealthy and talismans of digital trend-following for the famous (think Jimmy Fallon, Post Malone, and Eminem) explains part of their bad press. Another reason is that many onlookers see little point in them. An assessment that I believe is completely incorrect but merits refutation.
It's easy to see why non-crypto natives struggle to grasp the concept of "non-fungibility" of digital assets. Many people who have ever right-clicked and selected "Save As..." on an image or video — the primary media that is'minted' as an NFT — find this new paradigm of digital ownership unusual.
As a result, non-crypto press coverage has been overwhelmingly negative. This does not have to be the case. The technology underlying NFTs is cutting-edge and has enormous potential across a wide range of use cases. Whether it's allowing gamers to own and resell goods within the games they play, proving ownership (or part-ownership) of tangible assets like property, or assisting in the more equitable distribution of music royalties, this embryonic notion has a long way to go.
The notion that code may demonstrate the originality, authenticity, and provenance of a house, character skin, or song in a decentralized, open, and safe manner is deep. This potential will be exploited for a long time by innovators who are smarter and more intuitive than me. However, many organizations are going a step further by tying tokens to redeemable real-world benefits, transforming tokens from digital assets into a kind of club membership that gives ongoing value to the token holder.
Tokens do not always need to have a high-tech application to be valuable. We're working on NFTs with worldwide brands including Samsung, Katy Perry, Dionne Warwick, The Price Is Right, and World Poker Tour at ThetaDrop. Real-world rewards, or what has become known in the crypto-community as token "utility," have been a significant throughline in almost all of our relationships.
This is not to say that tokens without this type of use case are meaningless, as some opponents believe. We must not underestimate the value of art for the sake of art, or the community that these tokens foster. Neither should NFTs that are PFP projects, which are a hybrid of the two, be dismissed. NFTs, like the currencies we use every day, have value because a large enough number of people believe they do. It is a good venture if a community of collectors and aficionados wishes to get behind an NFT project, whether because of a group's shared beliefs or the attractive aesthetic of the tokens themselves.
There are obstacles to NFTs' general use and acceptance. One is climate change, yet one encouraging trend is the sheer breadth and number of initiatives that promise to be not only carbon neutral but also carbon negative. Proof-of-Stake protocols, such as Theta, consume less than 1% of the energy required for the same transaction on Proof-of-Work protocols, largely mitigating any environmental worries about NFTs. Creators and collectors are starting to catch the message, which can only be a positive thing.
People frequently sneer at the news, which is sometimes due to a lack of comprehension. If that is the case, I believe the crypto-community bears some of the guilt. We are often too insular, too afraid to explain what we are doing to individuals outside our community. Sometimes it's for selfish reasons, and other times it's because the task appears to be too difficult. Many mainstream journalists might definitely perform better in this area as well, by communicating more clearly about the promise of the technology.
NFTs are anticipated to become so prevalent that the name itself will become obsolete. Instead, we shall just discuss ownership, with the technology underlying it implicit.
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