15th Mar 2021

NFTs - just hype or the future of the marketplace?

What exactly are NFTs and why do they matter? NFT is an acronym for non-fungible token, non-fungible meaning unique or not interchangeable. NFTs are unique products (physical or digital) that have become digitally tokenized. The digital product has unique ownership and blockchain technologies ensure there is only one owner at any given time. Currently, the majority of NFTs are exclusively digital products.

Some companies have begun assigning a digital token to a physical product, much like an NFT. Nike has started to do this with some of their signature shoes. Dubbed “cryptokicks” these shoes will be using a system in which blockchain will be used to attach cryptographically secured digital assets to a physical shoe. The main draw from this is to be able to prove unique ownership of a limited physical item in digital form. This could potentially spread to other physical products with provable ownership, which could completely alter the black market for fake or off brand products. 

At first glance, this concept of digital ownership could seem pointless. Right now it is so easy to copy images and store them on a computer without needing to pay large sums of money. So why is this becoming so popular? Active buyers and sellers of NFTs believe provable ownership is the holy grail of digital marketplaces, and that the value of investments in these types of products will even go up over time. The value in NFTs is their uniqueness and the fact they cannot be copied or divided outside the terms of their origin contract. This allows for undeniable proof that the product is what is being advertised and therefore will have more value. The future outlook of the internet under NFTs will be one in which creators and producers benefit from complete control of their products, and can be sure that copies are more easily identifiable as such.

While this works for some digital items, the future outlook of the internet may seem a bit too regulated for today’s consumers who can easily access billions of images and videos without any repercussions. They might not like the potential consequences of an NFT internet in which it will be more difficult or costly to access images and videos. For instance, a streaming Disney movie with NFT compatibility might issue rights for viewership that make it imposisble to share the movie with others, let alone copy it in a P2P file sharing system. It all seems to depend on what the view of the future of the internet looks like. NFTs have the potential to be very valuable when they are attached to an item of value that benefits from these protections.

These digital products are making their way into every facet of consumer goods, from digital art to “cryptokicks”, the potential for NFTs is enormous. It is very likely that most content, whether digital or physical, will someday have a digital ownership number that will ensure proper ownership for the individual. So is it time to get in on NFTs and begin owning your very own digital product?

Enthusiasts believe this is the future and it is cheaper to get in now and own your own digital products before it becomes too mainstream and prices go up. On the other hand, supply is flooding the market, which means today's $69M Beeple auction could be tomorrow's speculative bust. Separating the process flows and practicalities from the hype is nothing new in the world of crypto, where booms and busts are a common occurance. Here are a few platforms to explore the evolving world of NFTs: 

Superrare   Nifty Gateway   Rarible  Mattereum