Will NFT ever catch up?
Good morning from New York City, basking in early summer weather as crypto enthusiasts attend NFT NYC – an annual conference and shindig that revolves around non-fungible tokens. The mood is more muted than last year’s gathering when the price of most NFTs was 90% higher than today, and when it was easy to find people eager to spend hundreds or thousands of dollars for pixelated monkeys.
Despite the decline, NFT supporters told me they remain convinced that non-fungible tokens will transform everything: culture, collectibles and more. As usual, I found many of their arguments convincing – at least in theory. But I wonder why, if NFTs are so transformative, they haven’t been able to gain traction outside of a niche subsection of the crypto world.
I think one reason is the name. The term “non-fungible token” is confusing and overly technical, and fails to invoke any real-world product or experience. This feels like a giant branding mistake on the part of the crypto community, but at this point we seem to be stuck with it. NFTs also face a more serious obstacle in that, for most people, the world of tokens and wallets is still a confusing experience.
However, this may start to change as popular brands start to adopt NFT technology in a way that hides all the messy crypto elements. Starbucks, for example, sold 2,000 NFTs in less than 20 minutes last month as part of its membership program, but called them “digital stamps,” which is a far more related term. And which Fortune reported in December, Reddit quietly created a $10 million market on its platform while calling its tokens “customizable avatars” instead of NFTs.
This is a step in the right direction. Meanwhile, some of the smarter minds in crypto are offering new insights into how NFTs should fit into our culture in the first place. This includes Li Jin, a founder at venture capital firm Variant, who has written an intriguing piece for Harvard Business Review on how product designers should build psychological attachment to NFTs and other elements of Web3.
Jin cites the example of Spotify, whose customers do not see the platform as just a music service, but as part of their identity. Similarly, people value their profiles on platforms like Instagram as a digital extension of their real selves. According to Jin, this sense of connection increases when someone can customize and store an element of their digital life – an experience that NFTs are well equipped to deliver.
If she’s right, NFT will likely become a part of our daily lives. But how long this will take before this happens is anyone’s guess.
Jeff John Roberts
[email protected]
@jeffjohnroberts
DECENTRALIZED NEWS
Law enforcement’s increasing familiarity with blockchain tracking tools has changed the perception of Bitcoin as an anonymous currency. (WSJ)
The price of FTT Tokens doubled in response to news that the supervisors of bankrupt FTX may reopen the exchange. (Coindesk)
Block announced a partnership with the African crypto exchange Yellow card as part of a wider push by the company into cross-border payments. (Fortune)
Ethereum breached $2,000 for the first time since last summer in response to the success of the Shanghai upgrade. (Bloomberg)
Twitter will let users trade crypto and stocks through a link with eToro. (CNBC)
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