NFTs: Hype or Substance? Examining the Long-Term Value

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16 Jan 2024

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ou’ve likely heard about NFTs (non-fungible tokens). These digital assets suddenly became a huge phenomenon in 2021, with people spending insane amounts of money on weird digital art and videos as NFTs!
But is this NFT craze just a temporary hype bubble? Or could NFTs evolve into an important digital ownership technology? I think the truth lies somewhere in between.

Why the Current NFT Phase Feels Temporary

The astronomical prices paid for NFT art seem mostly driven by hype and speculation, not real-world usefulness.

They sell for a ton but are barely traded—more speculation than real liquidity or value. It is hard to maintain these types of bubbles long-term.
Buying an expensive NFT usually doesn’t give you any special rights or control. While they do represent the ownership or rights to a particular underlying asset, they do not grant complete creative control or intellectual property rights unless specifically stated. The link between the token and the art seems weak.
Rampant fakes and theft turn off serious organizations from accepting NFTs. More on this in future articles.

So the current phase of expensive digital photo and video NFTs feels destined to lose steam once the easy money disappears. But the underlying concept might still have potential…

How NFT Use Could Grow

If NFT platforms can solve the above issues over the next few years, NFTs may unlock more helpful uses:

Representing one-of-a-kind video game collectibles, avatars and metaverse items in cooler ways. Maybe with ownership and use case for a collectible or an avatar even outside the game.
Enabling access passes to gated digital content, spaces and services. Big implications for digital identity.
Allowing new ways to split ownership of digital assets like songs and films.
Simplifying interactions across virtual worlds and apps via interchangeable tokens.

By shifting from hype art to real utility like identity, access and content gateways, NFTs may find firm footing over time. But they still need to fix issues like eco-impact, cost, and complexity first before reaching wider adoption.

NFTs represent one of those technologies that could be life-changing or it could be nothing. The range of outcomes is still very wide.

NFTs: Test Phase, Not Final Form?

Like most emerging technologies, you have to look past the hype bubbles, speculation and growing pains to reach maturity.
The expensive digital art NFT movement raging now seems destined to cool once speculators disappear. But the core digital verification and ownership technology being built could still blossom into something more substantive.
Just like the internet evolved from sketchy early websites to the indispensable services we can’t live without today, NFT uses and tech needs time for the best applications to emerge while the worst fade out.
Have some patience as things develop before writing off NFT possibilities or potential. The path ahead remains unclear, but there may still be something lasting forged from the current chaos.

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