Is there anything more volatile than cryptocurrency? Yes, of course. They are NFTs: i Non-fungible tokens. Digital property rights to things, digital or real as well, that originate in platforms Blockchain – The same thing that cryptocurrencies originated from – that which is bought and sold on the network, and the payment and collection of cryptocurrencies exclusively.
Their values have, for months, been going in a spiral, like and more than the values of cryptocurrencies. For the world of Bitcoin and Ether, this is a “crypto winter” moment: that means things are going wrong. According to Dapp Radar analysts, among the most adopted in the Web 3.0 world, the total cryptocurrency capital lost 65% from last January to today.
Even worse is the NFT, which left 82% of its value on the ground. But in this world, data is also fickle, and according to another analysis center, Dune Analytics, the loss is even worse: 97%. NFT trading volumes in January 2022 were $17 billion. By September, that number had dropped to just $466 million.
It is clear, then, that NFTs are in crisis and the crash recorded in recent months is tantamount to bursting a bubble. But a bubble of what exactly? Here, the problem is this. “The market exploded before it was possible to understand the true purpose of using NFTs,” explains Valeria Portali, Head of the Cryptocurrency and Blockchain Observatory at Milan Polytechnic.
Let’s start from the beginning. Two years ago, in September 2020, NFTs were more than just an idea: 300 buyers around the world; Daily transaction volume of about $50,000. Then, from January 2021, the market starts to rise continuously for a year. At first, the first NFTs associated with physical commodities, particularly in the art and music market, made headlines (and money). It was quite Investment crowd: You can buy shares in a work of art.
In June 2020, Scottish painter Trevor Jones digitized one of his oil paintings, “Picasso’s Bull”, as an NFT. It initially produced 9 issues which sold for $750 each. Then, within a few months, thanks to the boom in cryptocurrencies, with which the cost of the business was paid, the price rose to $55,000. Meanwhile, Jones also sold the original physical painting for $50,000, or $5,000 less in NFTs. Here is the origin of the bubble.
as buyers in the shop The number of digital NFTs grew and the value of reference cryptocurrencies took off, and the entire NFT market swelled. At that point, everyone started producing digital works to catch a glimpse of the market they were hoping to find their new “big thing.” We started selling and digitizing everything.
Former Twitter CEO and founder Jack Dorsey sold an NFT for his first tweet in 2006 for $2.9 million. A tweet from Elon Musk, founder of Tesla, has been sold for $1.1 million. This March, Christie’s – the largest auction house in the world – sold its first original digital artwork,”Everyday: The First 5000 Days”, created by Mike Winkelmann, the artist known as Beeple.
Prices that started at $100 have reached more than $69 million. “Things started to go at the speed of light – continues Portale – Nft was created on everything, even the heartbeat of a singer while he is on stage at a concert.”
Thanks to blockchain technology, NFT ensures the uniqueness of a digital file, its non-replicability, and makes all ownership changes clear and transparent. The problem is: ownership of what? Today there are more NFTs on the market than buyers. Transactions, which topped 100,000 a day a year ago, are now down to just over 3,000.
OpenSea is the largest P2P selling platform for NFTs: it controls 90% of them and has hosted total transactions for $14.7 billion, with a record last January of $3.7 billion in just one month. Before the market crash, in late September, according to the Crypto Slam website, monthly transactions had dropped to $550 million; Transactions were 7 million.
There were 503,000 unique buyers (they passed 1 million in January) and 530,000 unique sellers (there were nearly 900,000. The number of NFTs was 12,000 on Oct 5, but at least 10,000 have no value: from number 520 onwards, bidding has dropped below 1,000 dollars, from number 1,200 dropping to less than $100.
It is no coincidence that 80% of NFTs launched to date have already failed. At the top are, with ups and downs, the two – for now – giants: Bayc and Axie. Bayc, or Bored Ape Yacht Club, is a collection of 9,998 Nft each representing a drawing of an anthroposophic monkey dressed in different ways: Last February, a version in golden fur and a sailor’s hat sold for $2.8 million.
Since its launch in spring 2021, it has generated $2.2 billion in sales, and its NFTs are the monopoly of just over 6,000 unique owners. The other is Axie Infinity, with a different model: NFTs are related to a video game, have lower unit prices and actually have 2.1 million buyers, who through 17 million transactions have moved the value around $4 billion.
The reason for all this is not clear. The creators of Nft themselves are aware of this. Orange Comet, the creative digital studio founded by US celebrities (and that’s already saying a lot), has just released a batch of NFTs related to the hit TV series “The Walking Dead,” the zombie saga that has fascinated two generations of teens on both sides of the Atlantic.
On the company’s webpage, CEO Dave Broom outlined their business plan with these words: “We’re driven by one focus: making the things that really matter.” Translator: «We are doing important things». Version 3.0 of Nanni Moretti’s “I Do Things, I See People”.
All nonsense, then? of course not. And behind it are general exercises on a technique that will have weight in the future. Valeria Portali explains: “NFTs will have a future when they find applications in areas where a secure digital certificate would be useful. From testimonials of all kinds, from those related to training, to selling digital tickets for real events, concerts, and football matches.
They will be able to revolutionize all tickets and enrich them with content. For example, fans of a music group, through the Nft purchase of a disc, will be able to obtain other privileged offers, for example the right to purchase tickets in advance on concert tickets.
Other areas can be imagined, but we have to wait for the development of the Metaverse, that is, the unified digital universe, where everyone will be able to bring their digital content wherever they want, while today they are “prisoners” in every platform: our content on Facebook is not ours, it is from Facebook, just as we cannot Transfer our Android Apps to Apple iPhone or vice versa. But when that moment comes, Blockchain and NFT will not be the only technology option and other platforms will quickly find their way.”