Is it the End of the NFT Era? Where NFTs are heading…
Short answer:
It’s just the beginning of a new era! But NFTs and their capabilities will continue to change a lot.
Longer answer:
In the past two months, the overall sales volume for NFTs has decreased dramatically.
Some prominent analysts have shared the opinion that it has finally become clear to everyone that NFTs are worthless toys.
Is this really the case? I propose to look at the future of NFTs from a marketing strategist’s point of view. This is the easiest way to see if one actually needs NFTs, or if they really are just toys.
If we cut out all the blah-blah-blah, NFTs are currently addressing three major need-states (something that motivates a consumer to purchase):
1. The need for an online personal identity
As the biggest part of this slice of the pie, profile picture NFTs are obviously the most oversaturated segment of the market. This sector exploded following the success of CryptoPunks and Bored Apes, and has seen thousands of copycat projects. Most of them are just blindly copying the idea of making profile pictures, without really understanding what made BAYC and CrypoPunks a sensation.
This segment still has huge potential, because in addition to collectors, there are 8 billion potential clients on Earth who might want to identify themselves online. By online identity, I refer to the natural need for humans to tell society who they are, what values they share, etc. Would you like to be part of a lucky fisherman’s club, or would you rather associate with motorcycle enthusiasts? You can look at car or laptop stickers, tattoos, phone covers, and many other tools of self-expression as examples. People will always have the need to associate themselves with something. At some point, the current trend for non-stop minting of all possible types of profile pictures will calm down, and I believe that only the projects with very clear positioning (what a particular project is standing for) will resonate with a potential owner.
The biggest trend in this need-state will be NFT fashion. Profile pictures were adopted quickly, as we all have social network profiles where they can be used instantly. But if the Metaverse evolves as many have envisioned, NFT fashion will be one of the biggest growth segments.
2. My treasure chest/Peace of mind
A good example of this is in gaming. Would you buy a piece of land in a game, or e.g. a weapon, if NFT usage would allow it to be sold outside the game, thus making the game economy much more interesting and scalable? NFTs solve the intrinsic need to stay on top of your assets. Whether it’s digital real estate or a digital weapon, NFTs grant full control of ownership. Keeping all your assets from different games in one wallet might bring you more peace of mind.
The next big move I expect here, is that of game publishers allowing the use of purchased items across several games (under one publisher’s umbrella). It would not likely be for all items, just for dress/skin for example. Just as you can go from one building to another one across the street, not changing your outfit unless you want to in the offline world — you would have this same option in the gaming world. That would be a nice step towards a Metaverse.
The same need-state can be applicable for any certificates or official documents one wants to keep safe and confirmed by the issuer in the blockchain.
In this domain, I expect the NFT wallet’s UX/UI architecture to change quite a lot. If all your digital belongings will be stored in a few wallets, imagine what a mess it will be with the current UX/UI to find anything.
3. Sense of belonging
The best example of this is music NFTs, as a way for fans to interact with musicians in a very direct way. Imagine that you like a singer who is just starting out, and in 10 years she becomes the new Rihanna or Adele (you choose). An NFT of an early song that you purchased will be prestigious to own, as it proves you were a fan long before others recognised the talent.
I am sure that musicians, when they become stars, will give preferential treatment to limited groups (clubs) of their early fan base. They will be grateful to have had your support when it was really needed.
The same goes for event tickets. Whether it would be for the NFL or the NBA, or any other major sport, it will be cool to collect tickets in your NFT wallet for the events you’ve attended, and earn rewards/ranking in a dedicated fan club. In addition, NFT tickets solve the issue of fraud effectively.
And of course, the same goes for all kinds of collectable cards for topics that have an organic fan base (cultural phenomena), such as Pokémon cards, Marvel, Sports cards, etc.
So, what does this really mean?
At this point in time all three of these need-states are by far outperformed by the “money making” need-state. This will not fade away, as any real economy operates on the underlying principle of demand/offer.
In time (2 years by my estimate) a blind run for any NFT asset that will generate a fast profit will be over, due to natural processes (oversaturation). NFTs will become part of the regular market economy, and will have incorporated technological advances that increase user benefits
I believe this process has already begun. As one of signs, we can see a sharp drop in the search interest in Google.
Self-expression as a basic driver for the NFT world
So, how might the future look for NFTs? I see major category developments as “tickets” to self-expression (who am I?) in the coming years. By default, the technology is about maintaining a public record of verifiable ownership of something original in digital form.
As in the offline world, one might own an original of a brand or a fake copy of it. NFTs will continue to live and develop in situations in which there’s value in owning something truly original.
Examples? Here’s a few…
5 examples of NFT types that will live happily in the future:
1. NFTs that, beyond art, serve as a ticket to a physical private club.
2. Profile pictures (yes, no worries — those will stay), especially those made by famous artists or with a significant meaning behind them. Owners can identify with the image and values of their avatar.
3. NFTs confirming ownership of any type of asset used online. These can include land, apparel, gaming items, etc.
4. Any certificates or other documents. For example, a university diploma can easily be made into an NFT.
5. Donations or any form of early support to a creator, which can give future benefits.
As a resume
The majority will tell you that they think an NFT is an appealing image that, if the owner is lucky enough, may skyrocket in value over a short time period.
This was true in the past, but now NFTs are ready to move on from child to teenager, and become more practical. So yes, this is just the beginning.
