Dramatic NFT price declines fail to deter blockchain enthusiasts

The sudden and dramatic crash in the value of non-fungible tokens (NFTs) has made many critics feel justified, but technologists and digital art enthusiasts say they still believe in the promise of blockchain-based virtual objects.

The buzz around NFTs seemed relentless in 2021, when the technology that enables the authentication of digital products became part of the popular encyclopedia. NFT was Collins Dictionary’s word from 2021 – a year in which the use of the abbreviation increased by 11,000 percent.

NFTs are basically an original digital resource, such as art, music, photography, video or anything that can be sold. Who owns an NFT is kept track of by a blockchain, which is basically a decentralized digital ledger.

The madness is believed to have started in March of the same year, when the auction house Christie’s sold a digital work called “Weekdays: The first 5000 daysBy a digital artist named Beeple for more than $ 69 million. Since then, the technology has been used to sell ownership of digital content – from sports highlights to video game avatars to “Bored Apes” – with sales in the hundreds of thousands or even millions of dollars.

The market for NFTs experienced a sudden decline in early 2022, along with cryptocurrencies and stock markets. In the first week of May, sales of NFTs fell 92 percent compared to the peak in September, and the total market value fell from a peak of USD 23 billion in December to just over USD 12 billion today, wiping away more than Investor capital worth $ 10 billion in a matter of months.

“I’ve struggled to wrap my head around other people’s levels of tension,” said Paddy Cosgrave, co-founder of Web Summit, which hosted its latest technology event, Collision, in Toronto in late June. Despite having a place for NFT enthusiasts to share their stories, Mr. Cosgrave is still skeptical of the technology. “Either I’m not smart enough to find out, or there’s nothing to find out.”

Mr. Cosgrave says he believes confusion helped drive NFT mania in the first place. He explains that many who bought into the madness mentioned the enthusiasm of smart technologists as a reason to invest in it.

“You think ‘wow, this is the future, it’s so complicated I can not understand it, but people make a lot of money, so it must be legal.'” At the same time, Cosgrave says he has written off similar hyped technologies in the past, just to see them gradually live up to that hype.

“Organizing a technology conference for more than a decade, the only thing I have learned is that I make more mistakes than I am right, and that I am usually proven wrong pretty quickly,” he says. “I am just happy to be proven wrong [about NFTs] also.”

Jennifer Wong says that if you look past the hype, you will find a game-changing technology that will forever change the world of art. At the end of 2021, she opened the world’s first museum dedicated to displaying NFTs in Seattle to help dispel some of the myths and misconceptions about the technology, and to support the work of both local and international artists.

“What we wanted to do is showcase a lot of different art that uses NFTs as a way of ownership and authentication,” said Wong, who was a program manager at Collision. “We have [featured] photographers, we have had 3D digital artists, we have had animators, and we had some PFP (profile picture) projects as well, but we just wanted to show the diversity of NFT art out there. ”

Wong explains that she opened the Seattle NFT Museum to demonstrate the less speculative side of the technology, and she has been surprised by what she calls an “overwhelmingly positive” reception from visitors. She says visual artists, especially photographers, have traditionally struggled with issues related to ownership and authentication such as copyright infringement and counterfeiting. Despite the recent speculation bubble, she adds that NFTs can actually increase the credibility of the art.

“The perception of blockchain [after the latest crash] creates a barrier for people to actually see it as a useful technology; maybe blockchain needs rebranding, ”suggests Aleeza Jahan, a student at the Knowledge Society, a Toronto-based education program that helps teens use advanced technology to solve major challenges.

“This technology is revolutionary, and it’s not a question of whether or not you support NFTs; it is fundamentally different to approach things as decentralized, ”adds classmate and colleague Anya Singh.

On the last day of Collision, the two teenagers created an NFT live on stage and explained why they are bullish. Later that day, the couple explained why they believe decentralized technology will fundamentally change the way we interact with both the digital and physical worlds – whether the average user notices it or not.

“For the average person, it’s hard to understand what’s actually going on in the back, and how things are more decentralized, because the front end will look the same,” says Jahan.

“Is it worth considering?” It’s like asking if the Internet was worth paying attention to, Singh adds.