Exploring the impact and future of NFTs across industries — BitsCrunch Q&A

While the NFT space has been through its fair share of peaks and troughs, the potential to transform industries is inherent in this asset class. Unfortunately, there are still many points of improvement that need to be achieved before NFTs can reach the mainstream effectively.

Through the conversation below, bitsCrunch co-founder and data scientist Saravanan Jaichandaran delves into various aspects of NFTs, including their origins, mainstream criticism, and the crucial points of improvement needed for the space. They also address the importance of data availability, the impact of laundering and the ongoing work to standardize data formats and metadata. Also, bitsCrunch has recently launched an innovative data and analytics platform for the NFT space that aims to provide better accessibility for traders.

Q: How did you get into NFTs in the first place and what do you think their potential is?

We got into NFTs while exploring a hackathon, which we won by building an MVP product on the blockchain mixed with AI. This gave us exposure and allowed us to explore this space more. Now, NFTs have quietly spread across industries. It is only a matter of time before more enthusiasts and companies realize its value and take a step forward.

Even in 2023, NFTs are not widely known beyond being called a “digital art” fad. However, since the beginning of this decade, experts have emphasized its enormous potential across a range of industries such as healthcare, real estate, finance, sports and others. Still, its revolution in the digital art landscape should not be ignored.

Q: How would you address the common criticism that NFTs are not here to stay and are just a passing fad?

What the NFT industry is experiencing is not a new phenomenon. People reacted largely the same during technological breakthroughs in the Bitcoin era of the 2000s and the dotcom era of the 1990s. Similarly, NFTs are still in their nascent stages and their use has not been explored much beyond digital art and the Metaverse. However, it is worth noting that NFTs have revolutionized the way royalties work for artists and creators. Multiple creators can benefit from their artwork consistently by receiving royalties every time someone resells their artwork.

Question: The NFT market saw its peak in 2021 and 2022, but there are still many aspects that need improvement. What do you think are the three most important points of improvement for the space?

Awareness, openness and adoption.

The NFT and Web3 industry has been one of the most talked about topics since 2020, which became evident when the industry gained mass adoption in the second half of 2022. However, since then the industry has declined by approximately 70% from its peak, due to a breakdown of the initial hype and lack of awareness. Amidst the hype, the market also suffered from various security issues including phishing attacks, money laundering, market manipulation, money laundering, plagiarism and others.

Q: How can improved data availability benefit the NFT market?

As of now, blockchain data is not accessible to anyone, although all transactions are transparent. By leveraging NFT data, people can understand the actual market, analyze the pump/dump scheme and make informed decisions.

There is a key difference between data transparency and data availability. While blockchain technology has greatly improved transparency due to its immutability and traceability, it is still quite difficult for a non-technical person to track transactions. Ergo, even if the data is transparent, if people cannot access the data to make informed decisions, the technology is of no use to the people, thus limiting its mass adoption.

Q: Your recently launched NFT analysis platform UnleashNFTs offers a detailed wash trade view for collectibles. Why is this important?

A group of people can circulate certain NFT assets and increase their prices by selling them among themselves. This makes the NFT assets more valuable, due to a large number of transactions, which misleads the NFT buyers into thinking that the NFTs are more valuable than what they are actually worth. Laundry trading is an illegal activity and has greatly affected NFT investors and the market’s credibility. Over the years, we have felt that NFT wash trading has remained a less controversial topic in the market, but it is largely detrimental to the growth of NFTs as an asset class. Therefore, we decided to include wash trade statistics in our NFT analysis platform UnleashNFTs to bring more awareness to the topic and allow people to invest in NFTs based on their actual value.

Source: UnleashNFT

Q: What efforts are underway to develop standardized data formats and metadata for the NFT market?

At this point, there have been no standardized formats. It more or less depends on the collections and marketplaces and how they want to store their metadata. But there are certain standards authored by OpenZepplin for storing the metadata standards. At bitsCrunch we have our own form for storing metadata.

Q: How might improved data availability affect market liquidity?

With reliable and more transparent data, investors will not dump their money based on FOMO created by companies. Improved data availability can help increase market transparency, facilitate better price discovery, enable more sophisticated trading strategies and increase accessibility to the market. All these factors ultimately contribute to improving market efficiency.

Q: What are your goals for UnleashNFTs for 2023 and beyond?

For 2023, we are focusing on decentralisation. We will soon decentralize our data layer and all APIs on Unleash NFTs, which will be available on the bitsCrunch network. In addition, we will also be adding more KPIs and unique metrics on top of the 50+ unique metrics we already offer.

The ongoing efforts to develop standardized data formats and metadata, as well as the increasing focus on analytics platforms, demonstrate the continuous innovation that can drive the NFT market forward. As the space looks ahead, the potential of NFTs to transform industries and create new opportunities is clear, and it is important to continue to promote a deeper understanding and wider use of this cutting-edge technology.