Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

NFTs are becoming more carbon neutral and sophisticated - NFT expert explains what the next few years will look like

By: James Shannon

What are NFTs and how did they become so popular?

NFTs stand for Non-Fungible Tokens and are a piece of blockchain technology that exploded in popularity in mid 2021. I think the reason NFTs became so popular was really due to a perfect storm of events. Last year for better or for worse we became an incredibly digitized society. From Zoom meetings, remote work, and virtual worlds we were all forced to re-evaluate our relationship with technology and the relative importance we placed on digital assets and interactions. Many of us first heard of NFTs when Beeple sold one for millions of dollars. The concept of selling a .jpeg was ridiculous to most of us because we grew up in a world where digital items are not scarce. Anyone can save a copy to their computer. NFTs change this model, by attaching a provably unique token to any piece of digital property you can effectively monetize that property and track it through various sales channels without losing revenue to middlemen and platforms. This created entirely new markets for creators and digital creatives who until now have been earning table scraps for their work.

What will the next few years of the NFT market look like as far as them becoming more sophisticated?

The next few years will see massive steps forward in this market. Right now we are in a bear market as the price of many crypto currencies has fallen and VC investment into the space is lower. This will force companies to evaluate the market not from a position of profit but rather from a position of solving problems. Ultimately it is only when technology solves a real problem do people adopt it.

In terms of use cases I think we'll see widespread use of NFTs among digital creatives of all types. As younger generations become more comfortable with the technology they will create new revenue opportunities for themselves with crowdfunding, fan clubs, royalty sharing and much more.

You mentioned NFTs will become more carbon neutral, can you elaborate on this more?

The underlying technology which powers NFTs e.g. Ethereum, Solana and many more are evolving as we speak. Those technologies are becoming more carbon neutral in the sense that they use less energy to verify transactions which occur on the blockchain. When NFTs come back in full force post bear market these carbon neutral technologies will be widespread.

My last question is also regarding you mentioning NFTs will come with higher degrees of utility, what does this mean and can you give an example?

Beeple sold a multi-million dollar piece of artwork. The utility of an artwork is to look at it and potentially share it within your network. Other types of NFTs gives you access to specific content, or even act as a ticket to a real life concert. Utility is the benefit of owning an NFT - what you can actually do with it. Many NFTs released last year and throughout 2022 held very little utility. Their benefit was monetary. You could purchase and re-sell it for a profit if the project or team behind it had enough hype or momentum. We will see less of that moving forward. NFTs will need to have use cases and utility to be valued highly.

James Shannon grew up in Montreal, Canada balancing his time between hockey, music and a love of technology. After attending a music business master’s program in Valencia, Spain James threw himself head first into the world of music technology and eventually web 3.0. He is now CEO & Co-Founder of an exciting startup called XONE which aims to onboard the next 100 million users in web 3.0.

Jeudi 6 Octobre 2022