In 2022, the optimism surrounding NFT has gradually faded, mainly reflected in the decline in trading volume and the number of speculators. Perhaps it is time to ask some questions about the core value of NFT.
2018: NFT was born in a bear market
NFT actually existed as early as the Bitcoin era. At that time, there was no ERC-721 protocol standard (Ethereum’s first standard for NFT digital assets). However, the NFT we are currently referring to generally refers to the NFT on the Ethereum platform. Let's go back to early 2018 to trace the evolution of this emerging ecosystem.
At that time, the virtual currency market entered a bear market, and Bitcoin fell from 20,000 US dollars to 4,000 US dollars in 2 months, and this situation will last for about two years. There is a dark cloud hanging over the market, but anyone who has more or less heard of blockchain maintains a skeptical and mocking attitude towards the matter.
2018 is called the "year of construction" (#BUIDL), and everyone is encouraged to actively participate in the construction process of a new ecosystem to create a new network system. Because the emergence of NFT has opened up infinite possibilities for many fields, it is necessary for us to continue to explore and discover. There may be some ethical issues, but the top priority should be to explore this new technology with unlimited potential.
2019: A steadily growing NFT market
During 2019, the number of smart contracts and the number of new NFT projects launched each month have been steadily increasing, and the route of NFT development has begun to take shape with some ambitious but realistic goals. The blockchain game company announced that it will take several years to develop a complete game. Major NFT creation platforms such as "SuperRare", "Makersplace", and "Known Origin" are adding new artists every day.
However, we lack a platform and space to discuss the value contained in this new digital world. It is true that we have a platform like "NFT.NYC" (the largest NFT discussion conference in North America), but the agenda of the meeting It is mainly to discover and display NFT projects, not to discuss how to build the future network world.
2020: Global blockades and new NFT entrants
Then the time came to 2020. Affected by the epidemic, extensive and strict restrictions on travel, social interaction and access to public places have been implemented around the world, which has had positive and negative impacts on the NFT ecosystem. The most likely to have a strong interest in NFTs are artists, who are struggling to make ends meet due to the cancellation of performances and exhibitions due to the global blockade.
Such interest has only just begun. Participants in this ecosystem are convinced that NFT will become the future of the online world. This craze has spread to the entire NFT community, and the community welcomes newcomers to join. Similarly, during this period, everyone did not think about the future of NFT together. We predict that 2020 is just the beginning, and 2021 will be a decisive year. But who can tell what the future holds?
2021: Explosive growth of the NFT market
For the trend in 2021, we can only make predictions based on the situation in 2020, but no one could have foreseen such a rapid and large number of new user growth. Even though the addition of celebrities, media and big brands has increased the public attention of NFT, what exactly has attracted so much attention? The NFT project (PFP) on the avatar has generated a lot of profits, and there are also a surprising number of digital artists who have been heavily funded by the NFT project in terms of money.
As can be seen from the above figure, for such a young industry, it is not healthy for the market value to grow by 4440% within one year. This indicates that adjustments are coming, but it also means that NFT will become a part of the future digital world. It's just that in the past year, the story around NFT has been dominated by stars, rather than participants who have been present from the beginning. Because there are so many activities to be carried out, it takes a certain amount of time to absorb and educate more members, and this large amount of time is not used to define the true value of the "NFT community".
The need for digital scarcity
There are few ways to make money from your creative work on the internet these days, and the ability of influencers to successfully “play their cards” depends on a resource of great value, namely authenticity. That is, your content is unique and no one else can produce it.
But how is authenticity measured in a universe where content can be infinitely replicated? And how to verify the accuracy of online information in a transparent and anti-counterfeiting manner? "Blockchain can solve this problem".
But what needs to be pointed out here is that NFT is not 100% decentralized. As Gaspard Broustine from Ledger Wallet said in our interview, NFT is a hybrid of web2.0 and web3.0. Metadata is mostly hosted on old technology, while tokens live on the blockchain.
Therefore, they can meet existing needs, but the industry is still too young for large-scale use.
NFT is not an upgrade of Web2.0, but a fix
NFT is often seen as a representative of Web3.0, that is, we can fully control our data. But to gain full control, there are still many things that need to be prepared in advance, mainly including the following:
Confidentiality of Personal Data
Full consent to share this data
Recognition for digital majors
About the Value Evaluation of Digital Artists
The democratization of peer-to-peer encryption
High-quality internet connection worldwide
Fixing the faults in the digital system
Seeking more public input on digital regulation
NFT can solve some of the above problems, but not all, and it still has some room for development. Based on this observation, it may be more accurate to think of NFT as a product on top of Web2.0, like a remedy for those long-standing problems. Maybe we should think of NFT as a product of web 2.5 rather than web 3.0.
What are the applications of NFT?
So, in addition to giving a few people financial freedom, what else can NFT do? Internet reform may be the most powerful answer.
It is not a simple Internet upgrade, but an innovation of the Internet.
A sufficiently decentralized blockchain is free from human management, and the transparency it brings allows everyone to see some of the problems that existed before. This time, the power to verify information is in the hands of anyone, not just a small private group or government organization.
For online creators, this change is a fantastic opportunity: giving them equal access to the market with everyone else. In addition, there is the possibility of receiving royalties from the resale of NFTs for life. Without these digital creators, it is impossible for a brand to be truly seen by the masses.
For entrepreneurs, more and more aspects of our lives are being digitized. But only certain aspects of it need to be "tokenized". As for which aspects, the NFT community or the encryption community cannot answer this question alone, it depends on all participants and users on the Internet.
NFT has drawn everyone's attention to the problem, proposed some solutions, and built a bridge between today's Internet and the future Internet. Building the future also requires Internet users to take the opportunity to see the substance of the problem, rather than just focusing on the form.