It is pointed out that NFTs are dead and most of them are worthless.
NFTs, which use blockchain to add uniqueness and value to digital content, reached a peak in transactions from 2021 to 2022, but the market soon cooled down and about 23 million people It has been pointed out that it has become worthless. NFT expert Vlad Hategan explains the rise, fall, and future of NFTs.
Are NFTs Dead? - Trends, Predictions & Statistics 2023
NFTs, which suddenly began to attract attention around 2020, quickly became an investment target for enthusiasts, with the first tweet tweeted on Twitter (currently We entered an unprecedented bubble era, with items being sold for billions of yen.
A piece of NFT art is sold for a record 7.5 billion yen - GIGAZINE
However, around 2023, the bubble burst, and weekly trading volume in July 2023 fell to just 3% of its peak.
In order to understand the actual situation, Mr. Hategan analyzed 73,257 NFT collections that had been traded in the past, and found that the market capitalization of 69,795 of them, or 95% of the collections, was ``0 ether (ETH)'' It was found that
In other words, the current situation is that the collections of people who were once fascinated by NFTs and traded them have become almost worthless. In terms of number of people, it seems that about 23 million people own nothing.
'This highlights the incredibly high-risk nature of the NFT market,' Hategan said, 'suggesting that particularly careful risk research is required before purchasing anything of high value. 'It was,' he points out.
Regarding the above, it seems that similar results can be obtained by analyzing only the top content rather than the entire market, such as the stock price 'S&P 500'. According to data from virtual currency research company CoinMarketCap, of the top 8,850 NFT collections that were highly valuable and attracted public attention, 1,614, or 18%, have become worthless. Even if it is more than that, most of the contents are settled at about 100 dollars (about 14,800 yen). During the boom, ``transactions worth millions of dollars (hundreds of millions of yen) were frequently reported,'' but at the time of the survey, only 1% of content exceeded $6,000 (approximately 890,000 yen). .
It has also been found that 79% of all NFT collections, or 4 out of 5 items, are in a 'sold out' state. Regarding this, Hategan said, ``I think this is because there is a surplus in supply relative to demand, and investors have begun to carefully evaluate the style and uniqueness of NFTs before purchasing them.'' 'As a result, it's becoming increasingly difficult to sell content that doesn't have a clear use case, a compelling story, or true artistic value.'
Although the market value of NFTs has continued to plummet, Hategan points out, ``NFTs still have a place in the future.'' “To survive market downturns and have lasting value, NFTs must be historically significant (like first edition Pokemon cards), associated with true art, or have true utility. 'There is a need for NFTs to have practical utility,' he said, giving six examples of what it means for NFTs to be practical.
・Protection of cultural heritage
Digitize and protect cultural heritage, giving it unique and immutable status on the blockchain
·game
Buy and sell unique in-game assets represented as NFTs and make them available in various gaming environments
·ticket
Grant special tickets to events, content, and services
・Divided ownership
Dividing a single asset in the same way as a stock allows multiple owners to own NFTs, making assets and art more accessible to the general public.
·real estate
Tokenize your real estate property as an NFT to enable sale on a blockchain platform
・Digital identity
Make online credentials, certificates, etc. verifiable and unique
Hategan said, ``NFTs with use cases such as the ones above are generally more resilient (in value), as their value is maintained through their usefulness rather than through speculative buying.'' pointing out. He continued, ``There is no denying that the NFT landscape has changed dramatically since its peak in 2021. However, the evolution of NFTs is not over yet. As the market matures, NFTs will move from being mere collectibles to having tangible utility. 'Creators and investors alike will need to approach NFTs with care, a clear strategy, and a full understanding of the risks.' said.
A forum related to this article has been set up on the GIGAZINE official Discord server. Anyone can write freely, so please feel free to comment!
• Discord | 'Do you have any NFTs?' | GIGAZINE
https://discord.com/channels/1037961069903216680/1158330403267035176
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