Everyone who participated in NFT hype last year would have noticed now that their portfolio is in the race, but this is not a sign that NFTs are forever dead or were a useless fad. On the contrary, this is the best thing that can happen to a disruptive technology. Like many other innovations before, NFTs first had to be hyped up, inflated into a speculative bubble and then popped before their real use cases could be explored. This is a good thing for technology, just as the dot-com crash of the 90s was ultimately a good thing for the internet. Speculation limits innovation by rewarding terrible ideas and junk products, especially for NFTs.
Most people do not understand how NFTs work or what their use cases are, which only fuels their controversies and misunderstandings. Non-fungible tokens, or NFTs, are blockchain-based assets that act as an ownership agreement over someone “thing“, which is linked to a URL embedded in the token code, and can be transferred / sold to other people or used in smart blockchain contracts. An entire NFT’s ownership history and origins can be verified by anyone, making them useful for a very large number potential use cases.NFTs have been around for years, but did not gain recognition until 2021.
While some of the best-known collections still have 6- and 7-digit valuations, most have been downgraded to 2-3-digit sums. After Bitcoin and crypto prices began to crash hard this year, NFTs collapsed along with everything else. Now the creators of NFTs are forced to sell their collections at realistic prices, so that more buyers and participants can acquire and collect them. ONE Decrypt The article elaborates on this phenomenon, but there are many more powerful uses for NFTs that can revolutionize the way content creators connect with audiences, generate revenue, crowdfund new projects or even provide community ownership and membership.
NFTs have become cheaper to make
NFTs have a large selection of utility cases, some of which are definitely worth large sums while others are worth less than the network fee required to create them. However, there is a reason why useless NFT collections have been worth millions until this year, and it was not entirely speculation. For many years, Ethereum was the only game in town that could create NFTs, and Ethereum’s transaction fees are legendary awful. Creating a 10,000 token NFT collection can easily cost a project $ 1,000,000 in network fees, necessitating selling each token at three-digit prices to recoup the costs and generate enough revenue to fund the project. Combine that with the news factor, and a bubble was inevitable.
Fortunately, thanks to all-chains (like Polygon and Solana), transaction fees are no longer an issue for a small project or individual content creator. Now a generic 10,000 NFT art collection can be distributed and minted for less than $ 100, and can reasonably be worth $ 10 in stack coins or cryptocurrencies per token, earning a whopping $ 100,000 for the creator (s) if all tokens are sold, which can be life-changing for many people. NFTs no longer need to be sold at high prices, and this will usher in a new wave of functional NFTs that will see their imagined uses come to life without hype and speculation holding them back.
The true value of an NFT depends entirely on what it represents and how it can be used, and buyers / sellers must be realistic about it. Just because it has 0.001 percent rarity, does not mean that anyone else will be willing to pay 1000 times the price. Now that speculators’ NFT portfolios have become a landfill, and thanks to a strong interest in Web 3.0, Metaverse and blockchain Internet applications, the functional value of NFTs can be focused on. A wide range of NFT-powered niches can now be developed without speculators trying to “go to the moon,“and people can buy NFTs for their actual use. In time, this will introduce a new frontier for Web3 crowdfunding and Metaverse goods, which can only be possible if NFTs remain cheap.
Source: Decrypt
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