In March of 2000, after the NASDAQ had reached dizzying, stratospheric heights, the dot-com bubble burst. In less than a year, the index lost half its value and names that had become household in a matter of a few short years failed and closed their virtual storefronts. Pets.com, Worldcom, Napster and Netscape all fell victim, and even companies of that era that survived, such as Amazon, lost staggering amounts of market capitalisation.
And so goes the story of the death of the internet, right? Of course, it would be years before everyone knew for sure that it was really only the beginning, and that in fact these companies forged online were to continue not only to reshape the markets, but the world. It is my prediction that as with the dot-com bubble, the heavy losses in the NFT market should be considered no mark of impending death. It is the levelling out of an overexuberance that in its heady infancy is still getting to grips with itself. On the heels of the article we published last month about fraud and scepticism grounding much of the hype around NFTs, I will lay out the evidence as to why they (or at the very least, the fruit of them) won’t be going away any time soon, and what the word is on the street is about their future.
Let’s start with the standout success story, the dream case study of crypto assets married up with mainstream entertainment: NBA Top Shot. On this platform, buyers can collect ‘Moments’, NFTs of curated basketball clips, all officially licensed. For the uninitiated, this was the way it was always dreamed that it would be done – a marketplace of NFTs with an emphasis on collectables, a clean and easy to use interface, and all fuelled by a passion already shared by millions all around the globe. Everyone knows someone for whom ball is life, and if you don’t, odds are it’s probably you. Top Shot is perhaps most notable here because it is directly affiliated with both the NBA and the WNBA, lending it the kind of legitimacy most NFT project runners only dream about.
As of just last month, Top Shots surpassed $1 billion in sales, and the company that manages this platform, Dapper Labs, has also secured deals with both the NFL and UFC, among others. There are of course, however, caveats. Despite the impressive sales milestone, both the number of active buyers and daily sales figures have been on a steady decline since this time last year. Dapper Labs aren’t perturbed though. They see Top Shot as a still maturing market, with opportunities for growth that outrun the 2021 boom and bust.
If you missed our recent staff article about the artists defending Ukrainian identity, then this is a sentence you probably never thought you’d read: Ukraine is planning to sell NFTs to raise funds in defence against Russia. Ukraine’s Minister of Digital Transformation, Mykhailo Fedorov, announced the initiative on Twitter in March, which shows that the government is embracing a strategy that would not only have been incompatible as little as five years ago, but likely entirely dismissed. This shows how the rhetoric around what NFTs are and what they can do is being adopted in broader spheres, humanitarian spheres, no less. The Ukrainian government saw in this technology, an opportunity, and that reflects the spirit of exactly what the proponents of NFTs are espousing in the wake of the crash. But what is the word on the street, exactly?
As part of my deep dive into the state of the market, I interviewed Bryce Johnson, AKA brycent, Co-Founder of Loot Squad and almost certainly the most prominent Web3-based gaming influencer right now. We discuss his opinions regarding NFTs and their integration into the gaming space, as well as his predictions for the future.
I also had the opportunity to ask influencer and content creator Cryptogad similar questions, but with more of a focus on the art side. Here is his take on the state of affairs:
Do you think NFTs are the future of visual art?
It is certain that NFTs will revolutionize visual art in the coming years. The technology they use has allowed a solution to the problem that affected all works of art: the guarantee of authenticity. However, despite the usefulness of NFTs in this field, I find it difficult to imagine a "100% digital" future for art. I think there will always be a certain pleasure to hold the physical work at home for the greatest collectors. I think people prefer a real Picasso at home rather than on a screen!
What is a promising project you've got your eye on?
Honestly, there are so many! I am eyeing up several, but if I were to give you an example I would say: Arianee! This is a project using NFTs to guarantee the authenticity of luxury products. There are so many counterfeits these days (Rolex, Louis Vuitton etc) and using NFTs in this way can revolutionize the industry. They have raised 20 million euros during their A series, very promising!
Do you see NFTs going mainstream, or do you see them remaining niche, community-supported fixtures?
In my opinion, it is impossible for the NFT not to become mainstream. I think that over time they will become part of our daily lives: video games, luxury, diplomas, they will be everywhere. For now, many people are reducing this technology to a simple "digital drawing" and it’s not their fault! The market has been flooded with useless and uninteresting collections, in addition to the growing number of scams, and this has not helped mass adoption. But let time do its work, and people will see for themselves.
Many figures in the broader NFT space are holding firm that the future remains bright, but others, like OhhShiny, who hosts the OhhShiny Show and is influential on Twitter in the NFT art space, take a more measured stance. In short, both opinions and enthusiasm in the market are mixed right now. Below is what's being said about the current state of the market:
Rumours abound that the recent crash is a death knell for NFTs, this along with the declining prices of what are arguably the most famous and established projects. However, in April, the market recorded a month-on-month increase in trading volume of nearly 45%. Sales totalling $16 billion so far this year are on track to beat last year’s total of $25 billion, and what is more, the Web 3.0 economy overall is expected to grow at an annual rate of over 40% in its own right. As talk of the metaverse and crypto-led tech begin to take centre stage, it is increasingly becoming less a question of if, but a question of when these burgeoning niches of internet culture become commonplace, if not eventually, mainstream.
One of the limiting factors in the development of Web 3.0 has been the technological context and wider comprehension. NFTs as they are now were not designed with mainstream consumption in mind, and so are in effect confusing and ethereal to the gen pub, and what is more, the barrier to purchase is too high. But time is, as always, the great equaliser. With the prevalence of rug-pulls and scams, especially in years when the market has been especially hot, buyers have grown to be more aware, signalling that as the wild west period comes to an end, a smarter, more savvy purchasing block will step up to root out the scams and bring to light the projects that provide for them the most interesting innovation. After all, as of March of this year, there were more NFTs on the internet at large than there were publicly available websites, which as a statement in its own right is an almost staggering comparison to comprehend. A lot of this is moving faster than most can keep up, and that is precisely why no one can say for sure if this is all hot 1 and 0 air, or if Web3.0 and NFTs are so revolutionary they will simply be integrated into what we already know, and their attributes will be so ubiquitous that, in certain online circles and pursuits, they will eventually develop from what is experimental into what is expected.
Transformative change is not, and has never been, an overnight process. When I reflect on what the internet was twenty years ago, when Google was not yet a household name, when its access was confined to a wired and usually sole home computer, and when the concept of streaming was simply not even well-conceived, let alone well-executed, I realise that whatever we assume now about the future of technology is moot. The only thing we can really be sure of is that when it advances, people will run with it, often in ways we can’t even begin to fathom until in the palms of our hands; or, as is more likely in this instance, on-chain. To believe that the internet will remain always only what we know is a lie. It was a lie yesterday, and it will be a lie tomorrow. There’s no crystal ball to say where we’re going to end up, but there are, as I coined in my last article, “winds of blockchainge” we can consult for a heading. Right now, innovators are telling us what they think the direction is that that wind is taking us. Could well be that they’re all wrong, but that said, their guess is as good as anybody’s.