With the state of the market (and the economy as a whole), the vast majority of NFT projects are way down from their all-time highs. Many have declared that NFTs are “dead” and celebrating their so-called “demise.” On top of this, OpenSea ‘s trading volume just plummeted to its lowest level so far in 2022. So is this it? Is everything going to zero? Are NFTs done for? Nope. The tech itself isn’t exactly new if we’re honest, and there are still a lot of projects active in the space. And then of course there are many companies and new projects looking to harness the power of NFTs in their offerings. So what exactly is the next step for NFTs? Where will they likely play an integral role in the future?
What Use Are NFTs?
Arguably the biggest criticism leveled against NFTs (other than the whole “NFTs are destroying the environment” thing) is that they have no actual utility. Now if we look at the market as it is now, and if we consider the majority of projects, then objectively, this argument is pretty sound. It would be shortsighted for me to simply ignore the fact that a lot of projects that promise utility never really deliver, or their “utility” isn’t particularly useful—at all. I don’t think completely dismissing dissidents or people who vehemently hate NFTs is necessarily the way to grow the industry or make improvements—if there’s anything I know, ignoring your critics means you never improve. You may not like what you hear, but you should probably hear it. At least people are telling you how they honestly feel (even if it’s disproportionate), so kudos for that.
Check out our article Utility in NFT Projects and Illusory Promises by clicking here.
But just because a bunch of projects miss the point or fail to deliver doesn’t mean that all of them are messing up. And moreover, NFTs do have utility beyond 10K JPEG collections and are already beginning to play a fundamental role in changing a range of different industries. I’m not going to get into a whole long spiel about each, but I think a brief summary of the current state and possible next steps for each seems reasonable, don’t you think? Let’s take a closer look…
At the end of the day, NFTs are meant to be collectible digital assets that also serve as proof of authenticity and ownership. Yeah, obviously I can screenshot an NFT or take a photograph of the Mona Lisa or whatever, but I don’t own the damn thing. However, the problem with most current digital collectibles is that they are:
- Highly limited - 10K or 20K is not a lot if you think about it. And if some people can buy multiple NFTs, then your chance to own one decreases substantially
- Too expensive - A lot of mints start at several hundreds of dollars. For your everyday collector, that’s a high barrier to entry and not something they’re going to be able to afford
- Difficult to access - Many people don’t understand Web3 tech and are wary of using apps and engaging in circles they’re unfamiliar with, so many won’t get into it for this reason alone
- Too insular - Communities discussing nothing but price and ignoring newcomers doesn’t bode well for the future of the projects in which this kind of behavior prevails
- Not particularly fun or original - Many projects are copy-pastes of previous ones that enjoyed some success, so they’re derivative and dull since they aren’t trying anything new or exciting
- Don’t have any utility - You get a JPEG and that’s it. You’re promised all kinds of things beyond this, but few (if any) actually materialize
I could probably list some more criteria, but those are the ones that are at the top of my mind. For future digital collectible projects to succeed, we need to make collections much larger, easier to access and less risky to get into. Moreover, it may even make sense to tie digital items to physical ones, thus allowing people to exchange their NFT or use it to gain access to consumable and/or collectible items—for example, ChainSpirit offer their NFT holders access to special bottles of Soju, a type of alcohol produced in Korea, as part of their unique model.
Check out our sponsored article ChainSpirit - A Fully Decentralized Spirits Distillery by clicking here.
There are many ways NFTs can (and will) improve, and some of these improvements are happening right now. There are plenty of examples here on MSQ.io, so just keep browsing the site and you’re sure to come across them!
Something we haven’t talked too much about here on MSQ.io is NFT ticketing. Using NFTs for ticketing is actually an amazing idea since it provides added value to the experience for end users and makes the entire process of issuing and purchasing tickets infinitely easier. GET Protocol is a fantastic example of this, and they’ve actually developed several technologies and solutions using NFTs. Their contributions in the space are nothing short of impressive, and they’re constantly hard at work innovating to bring more accessibility and transparency to the world of ticketing.
Moreover, Ticketmaster is tapping into the FLOW blockchain to allow events to issue NFTs tied to tickets. This is happening people, and sooner or later, global ticketing companies may run entirely on or at least harness the power of blockchain technology and NFTs. And think about it—plane tickets, membership cards, licenses, permits, and all manner of documentation could be verified with or supplemented by NFTs. This can effectively eliminate fraud and save companies and governments hundreds of millions of dollars. If you think NFTs hurt the environment, I can assure you that corporate malfeasance, corruption and fraud hurt it (and therefore you and everyone else) much, much more.
Ah yes, the world of music NFTs. I’m not entirely sure anyone’s really got the formula right here yet, and in many ways the rules that apply to digital collectibles apply to music NFTs. And let’s be real, if we’re not getting it right in general with the stuff we’re already familiar with, we’re not going to get it right with stuff like music NFTs. So are music NFTs a thing? Most definitely, and if they aren’t really yet, they soon will be. Traditional platforms like Spotify and YouTube help some artists a whole lot, but lesser known ones just get left by the wayside and get no real added value for being on these popular platform.
The thing is, if smaller artists can create a limited run of music NFTs and possibly tie them to physical CDs, merchandise or other forms of digital media and collectibles and interact directly with a wider fanbase, they stand to make more money and could conceivably charge less for their music, which helps end users. As a musician myself who has released music online, I have plenty of suggestions about how these models could work..sadly I haven’t had these conversations with anyone yet, but maybe I should?
Anyway, one platform that is pretty interesting is Royal . It’s currently in Beta and allows users to “invest” in the music of artists, meaning they’ll get a percentage of the royalties (see where the name comes from?) from streams and such. So if you like an artist and invest and they get a bajillion streams, guess what? You stand to win big here. I think I gotta try this out actually, sounds pretty darn intriguing to say the least!
This is just one approach though, and I think the potential of music NFTs is still being tapped into. I’m all good with profit sharing, no doubt, but I think if artists could just earn more for the hard work they put into their music, that would be really, really awesome. In short: don’t sleep on music NFTs!
This Probably Needs a Follow-up or Two!
Man, I’ve already said so much about a couple of industries and areas where NFTs will have an impact, and I feel like I’m only scratching the surface! I think it’s good to take a look at the bigger picture and get some perspective, so amid a bear market filled with FUD and garbage, this little exploration has been refreshing for me as well. Web3 is far from dead, and I’m honored to know so many top innovators working to provide solutions to some longstanding issues plaguing vast swathes of people.
Check out our article Why All the FUD? by clicking here.
I actually tried to keep this brief, but I failed hard! This overview probably requires another article, or even several for that matter. One thing for sure is that NFTs aren’t dead, and they’re not going away. They’re an important technology that has changed the lives of countless people for the better, and I’ve no doubt they’ll continue to do so now and well into the future…