With the continued recession and steep decline, the end of NFTs now seems inevitable. In fact, since the beginning of the year, according to reports from CryptoSlam, a portal specializing in cryptocurrency and blockchain, NFTs have suffered a decline of about 92%, with an average price drop of about 84% and a loss for buyers of about 47%. Interesting ratios, given the speculative bubble that burst at the beginning of 2021.
The average NFT has dropped dramatically in value, from being a multi-million dollar diamond moving from one wallet to another, to just a €100 note. To cite a concrete example, this is what happened to the NFT of Jack Dorsey’s first tweet, which went from $2.9 million at the beginning of the year to a mere $132 today.
But what does this mean? Are NFTs Gradually Disappearing? Absolutely not, and it could even be argued that this drop marks the real starting point for this technology. In fact, like any bubble, the NFT bubble was also destined to burst, but this does not mean that it is destined to disappear. Therefore, before giving an overview of the evolution of NFTs, it is necessary to pay attention to an important detail.
What happened to NFTs?
First, it is necessary to frame the historical period in which they spread. In fact, in 2021, the whole world was in the midst of a global pandemic that kept us indoors for months. This means that the lack of human interactions has led us to develop a closer relationship with our digital devices, leading us to believe that the world will continue to be this way. It is a pity that after that everything returned to normal and with it also the euphoria that was created for these technologies, along with the value of all companies such as Netflix, Amazon, Zoom and many others, declined. Thus, the free fall of NFTs is part of a broader and more general decline in the markets, which has hit the more speculative assets the hardest and the facts that have benefited the most from the acute phase of the pandemic, such as social networking, home delivery, and video conferencing platforms. So while this marks the end of an irrational financial cycle, it doesn’t necessarily mean it’s also the end of technology. On the contrary, there are many opportunities that can be seized thanks to NFTs and their recent fall will mark the real beginning of this technology, which until now has existed through purely speculative merit.
How can NFTs be used in the real world?
As the aura of speculation around the world of NFTs decreases, we realize how very useful this technology can actually be for many other purposes in everyday life. In fact, NFTs can play an increasingly important role in our digital society, and they don’t have to be associated with collecting, art, or speculation as they have been delivered so far.
Instinctively, when we talk about NFTs, Bored Ape Yacht Club and CryptoPunks come to mind, but we have to look much further than that to understand their true potential.
First of all, it is necessary to consider them for what they are, that is, “digital certificates of ownership”. «In the logistics sector, for example, NFTs can create real ‘digital passports’ that testify to the passes along the supply chain of a given product, exploiting the immutability of information recorded on the blockchain – explains the Blockchain & Distributed Ledger Observatory to Milan Polytechnic. The possibility of non-fake ID certificates being represented through NFTs is also particularly interesting in the field of digital identity.” Indeed, if at the time of the Green Card these certificates were in the form of NFTs, it would not be possible to pass the latter from smartphone to smartphone and forge them.
To give other examples, NFT technology can also be used in education, for certifications such as diplomas and degrees. At the same time, going back to the artistic level, this technology can be used to record the purchase and sale of physical works, guaranteeing the artist a percentage of each transaction made on the work. In short, NFT technology is far from dead, on the contrary, it opens up new business opportunities, leaving room for creativity.