This editorial article is a part of Resilient Tech Careers Month of Technical.ly’s editorial calendar.
Nonfungible tokens, these digital verifications of ownership for unique digital assets on the blockchain, captured the attention of blockchain investors during this time. In 2021, artists sold their art in NFTs for millions of dollars, including Beeple, who sold one piece as an NFT for $69 million at prestigious auction house company Christie’s that March.
After this, celebrities began endorsing NFTs, with notably Paris Hilton promoting the Bored Ape NFT series on “The Tonight Show Starring Jimmy Fallon” in January 2022, which was deemed awkward by social media users when the clip went viral.
As people began trading and collecting NFTs — sometimes as full-time jobs — they came together in community to celebrate their shared interest. In Philly, a group of Web3 enthusiasts even created NFT Philly, which organizes in-person meetups for people interested in these digital assets.
Yet some collectors believe they will make a comeback.
Despite recent cryptocurrency and NFT declines, NFT collectors and a creator think with some changes to uses for NFTs and upcoming events in the Web3 field, they’ll be hot items again.
How we got to the current state of NFTs
“NFTs, or nonfungible tokens, are now being labeled as worthless by some economists because they do not have an inherent value,” Dr. Hala Faissal told Technical.ly. Faissal, an expert on tokenomics, is the head of the Department of Economics of Lebanese University and a recipient of the Fulbright visiting scholarship at Temple University.
Because some NFTs do not have utility, their worth is based on what people are willing to pay for them, which could be a factor that decreases their value, Faissal said. Concerns over NFTs damaging the environment with high energy use, content originality, and lack of cryptocurrency regulation and security could diminish the perceived value, too.
Recently, a supply of too many NFTs has decreased their prices, Faissal added.
NFTs are just one of several cryptocurrencies with declining prices due to the overall fall of the crypto market that’s happened over the past two years.
“In terms of any business cycle, we are passing through a normal bear market, but it has been more than usual from the historical perspective,” she added.
The future of NFTs
There will need to be more intellectual property created and business model innovation to give NFTs worth, said Brittany Jenkins, an educator and founder of We Are Tech, who led a workshop about the evolution of the internet and NFTs at an NFT Philly event last fall.
“It just needs to shift from [NFTs] being worthless to, how do we create it? How do we create worth?” Jenkins said about the current conversations about the technology.
Some people in the NFT space got into it to capitalize on their art, but others have hopped on a trend bandwagon, Jenkins said, and because of this, there hasn’t been a lot of space for creativity for intellectual property in the NFT world. She believes tech innovators in the NFT space should be working with engineers to attract people to using NFTs, which will create value.
Jenkins has been in the Web3 space even before it became known as Web3 — that is, “the internet owned by the builders and users, orchestrated with tokens,” as one noted investor described it — and she and others have advocated for engineers to create token standards, or rules by which cryptocurrencies can operate.
NFT collector Tyrone Robertson also said many people bought NFTs just for the trend factor when they were popular from 2021 through 2022.
“People were just blinded by that because they thought that they were going to make billions off of buying certain things and you know, they just didn’t really do the research,” said Robertson, who is also a cofounder of NFT Philly.
Although NFT creator and artist Peter Erickson, who first sold his own art as an NFT in early 2021 and has purchased NFTs in the past, would not purchase another one at this point in time, some NFTs could have value into the future, he said.
“I wouldn’t make an absolute statement that all NFTs are worthless,” Erickson said. “… Some of them, from my opinion, could have value and could be something that I want to have in a NFT collection.”
Robertson attributes the “worthless” label to the ebbs and flows of the market that NFTs are going through.
“As I hear this, I do see it, but it’s not something where it makes me fear for the future of digital collecting,” he said.
Robertson believes prices of NFTs and interest in NFTs will rise after the next Bitcoin halving — that is, when the cryptocurrency Bitcoin’s mining rewards are cut in half, which happens every four years. (Experts believe the next Bitcoin halving will be in May 2024.) This will draw people’s attention toward digital assets as they receive their rewards and sell their mining rigs, he said.
Robertson also predicts the lauded yearly art show Art Basel Miami Beach, which features a variety of contemporary artworks including NFTs, will promote NFTs.
Beyond NFTs, Robertson hopes to see digital collecting become more user friendly: Softwares created around Bitcoin are not easy to use, so improving Bitcoin would also improve these softwares, he said.
Erickson hopes the future of the blockchain — which verifies and stores each transaction via distributed ledger technology — and NFTs will include authenticating information, which could help stop the spread of misinformation.
In Jenkins’ view, instead of calling NFTs worthless, people involved in NFTs should be innovating what will capture value and working with engineers to create it, she said.
“Anytime you get people to perform an action, there’s value there,” she said. “It’s just you have to really push yourself as an innovator to capture that value, and keep capturing it over and over until you can measure it in a way where you can validate the value that’s there.”
Knowledge is power!
Subscribe for free today and stay up to date with news and tips you need to grow your career and connect with our vibrant tech community.