It also demonstrated that “the vast majority of NFTs are worthless.” Two years after the technological trend that wiped out artists and celebrities, researchers estimate that 23 million people have useless investments. NFTs make it possible to demonstrate ownership in the digital world, something that was not possible before. But thanks to blockchain technology and NFTs, the principle of “scarcity” now also exists in the digital world. This is because each NFT is rare, unique, and indivisible.
Therefore, when a digital asset is tokenized, it creates value, since it is possible to prove its authenticity and ownership and can be bought and sold many times. Traditional works of art, such as paintings, are valuable precisely because they are unique. However, digital files can be easily and infinitely duplicated. There are some doubts as to whether it was really an NFT treasure (if something like that could be called a “treasure”), but in theory it is possible to scan the blockchain to find all the records of the minting of an NFT and download the media to which it links.
The solution proposed by DappGambl consists of minting only NFT with utilities, such as game assets, access to events through tokens or links to physical products. At a very high level, most NFTs are part of the Ethereum blockchain, although other blockchains have implemented their own version of NFTs. Serious artists continue to produce smart NFTs as the medium consolidates its place in the global art market. There have been some cases where artists have decided not to sell NFTs or cancel future releases after learning about the effects they could have on climate change.
For those who don't remember, NFTs are entries in a blockchain, usually the Ethereum blockchain, that represent ownership of assets (usually a digital asset, such as an image file or a game object), but NFTs can also be linked to physical objects. To survive market declines and have lasting value, NFTs must be historically relevant (for example, Pokémon cards from the first edition), real art, or be truly useful, as they say in the report. As expected, my training based on these economic theories does not provide me with the appropriate methodology to assess NFT. The company behind the NFT series created a derivative cryptocurrency, broke the blockchain for a few hours due to the popularity of one of its sales, and even acquired other massive NFT brands.
While millions of people may have lost the value of their NFT purchase, there are still a lot of NFTs that haven't been sold, which is also a problem. But we've seen big brands and celebrities like Marvel and Wayne Gretzky launch their own NFTs, which seem to be aimed at more traditional collectors, rather than cryptocurrency enthusiasts. Some attempts have been made to connect NFTs to real-world objects, often as a kind of verification method. Since NFTs use the same blockchain technology as some cryptocurrencies that consume a lot of energy, they also end up consuming a lot of electricity.
However, I would have to postpone the decision on how to price NFTs and whether NFTs are currently “in a bubble” or are they still undervalued.
