Temporary collapse or a bubble burst? The market for certified digital goods, NFTs, which have been on the rise since its rise last year, has plummeted and, according to experts, needs to be restructured if it wants to appeal to the general public.
NFT, Non-Fungible Token or Non-Fungible Token in Portuguese is a digital format that allows any virtual object, be it image, photo, animation, video or music, to be associated with a certificate of registered authenticity. Blockchain, a technology that underpins cryptocurrencies like Bitcoin.
After generating $ 44.2 billion in 2021, NFTs saw a 75% reduction in spending between February and mid-April, according to ChannelIlysis.
One of the symbols of this mini-crash is the degradation of NFT from the first tweet of Twitter co-founder Jack Dorsey.
The first NFT tweet, purchased in March 2021 for about $ 3 million, was auctioned off in April. Its owners are hoping to sell it for 48 million, but at the moment, the maximum price is just over $ 20,000.
In contrast, the sale of virtual land on “The Otherside”, a metavers platform (Digital Universe) of the board app yacht club, the most famous club of NTF owners, reached hundreds of millions of dollars in the first 24 hours. May.
For the general public, it is difficult to understand this volatile market in the hands of some heavyweights known as “whales” who use their influence to drive NFTs, explains Molly White, founder of an expert website that lists scams around the world. Cryptocurrency
Excluding fashion influences, what basis should be used to set a “fair” price that everyone understands?
More than “utility,” says Molly White, it is the “status” granted by an NFT proprietor that seems to establish its value.
NFTs found in a few versions, such as “Bored Apes”, give access to very closed groups, so are the most expensive.
Cryptographic artist “Louis16art” offers confidence in the author’s reputation, the identity of previous NFT owners, the quality of work, and the techniques used.
Other experts suggest creating a database for first-time buyers, which is used for traditional industries and maintained by digital industry experts.
The problem is that most of these assets are sold in “openness”, an unregulated market “And when new technology comes along, scammers are on the lookout,” explains Eric Barbary, an expert attorney for Resin.
The platform revealed in January that 80% of free NFT images on its network had been forged or stolen.
For Molly White, the market will not be able to attract the general public unless “control” and “consumer protection” are strong.
“It’s like the Wild West,” summarizes Sophie Lano, an opportunity for bubble bursts to begin “on a solid foundation.”
By eliminating the persistent security flaws and legal “loopholes” that might prevent people from purchasing NFTs, how do you simplify purchases that remain complex for a non-technofile viewer to understand?
“No one understands, but everyone wants to,” said Olivier Larner, co-author of the book NTF Mine D’Or (NTF, Gold Mine).
“The only thing missing is to make the platforms more accessible,” he speculates.