Quickly dismissing a nascent technology or tech company is an excellent way to get dunked on in the future.
From RIM’s CEO on the iPhone’s launch to Thomas Siebel brushing off Salesforce challenging Microsoft, there’s a long-running history of such mistaken pronouncements. Given the illustrious history of folks being wrong about the future, I am not going to say that non-fungible tokens (NFTs) are never going to become a mainstream technology. But I will admit at this juncture that I am becoming a mote impatient for what’s been promised.
NFTs fit neatly into the most recent crypto boom, with prices of many crypto tokens rising sharply, leading to huge growth in web3 wealth. A speculative frenzy formed around NFTs, leading to well-known projects like BAYC and Doodles managing to raise money to build on top of their IP.
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But as crypto prices have come down, and with consumer interest once again entering a period of abeyance over acceleration, we are also seeing NFT trading activity decline. OpenSea, perhaps the best-known NFT trading platform, is aware of the changing narrative surrounding its core asset class, writing this week about fluctuating market conditions and where it sees the future of non-fungible tokens. It’s a piece of writing worth considering.
So let’s do it. We’ll digest OpenSea co-founder and CEO Devin Finzer’s arguments — and how they match up with what we might hope for in a tech-fueled future.
The promise of NFTs
Finzer considers NFTs to be “unique, provably scarce, openly transferable, user-owned and usable across multiple applications,” calling them a “foundational technology that will underlie thousands of use cases and industries.”
This use-case claim echoes what TechCrunch has heard from others in the web3 space: that NFTs will have myriad uses past what we have become most accustomed to — namely tokens pointing to images stored off-chain.
It’s not a small claim, the use-case comment, and it’s also one that’s testable; the time frame for the utility proliferation of NFT use cases is not entirely clear (more on that shortly), but where the technology and its associated market are heading appears limpid enough to folks building in the web3 market.
What sort of utility might NFTs offer in time? Finzer riffs on some examples:
[W]hile, today, some may see NFTs as simply jpegs, we dream much bigger: We see a world where artists and creatives make their living selling digital art; where dedicated fans buy collectibles from their favorite athletes and musicians, and influencers deck themselves out in virtual clothing; where developers launch access passes to their software as NFTs; where decentralized, sometimes pseudonymous groups find membership, community and belonging via shared ownership; and where new jobs, like “virtual world real estate agent” or “virtual reality sculpture designer” spring up inside of open, free-market game economies.
As a very online person, a music fanatic, a gamer, a fan of sports and someone who has dressed up many an in-game character, I am in the target market for much of the above. As such, I have a vested interest in the NFT vision coming to fruition, provided that what is ushered into our world is, in fact, better than what came before it.
Finzer had more to say concerning NFT use:
Right now, the first NFTs (PFP projects, collectibles, generative art) may feel small, or even like toys, and the use cases many of us have dreamed about (ticketing, gaming, music, real estate) are still in their infancy.
Ticketing, gaming, music and real estate are good ways to put into consumer-friendly terms the use of NFTs to sell access, assets, artistic patronage and space. That is a very broad list of possible NFT use cases.
When might all that utility come to a crypto wallet near you? Finzer closes his entry with the following (emphasis original):
During this winter, I expect that we’ll see an explosion of innovation and utility across NFTs (and there’s a lot we’re excited about … more on that soon).
We now have a thesis about what NFTs are, a list of possible use cases and a loose timetable for NFTs to live up to their expectations. More simply, we have a pretty good mark against which we can measure the progress of NFT technology and its in-market impact.
The when is still fuzzy. The length of “crypto winter” is not a set amount of time; the current downturn could wrap up by the end of next week, next quarter or next year.
But before the next re-acceleration of consumer interest in blockchain-based tokens and assets and securities, one of the most important people in NFTs expects us to see many concrete use cases for the technology. This is encouraging, to a degree; it would be a bummer if so much time and money — human and financial capital, basically — went into something that wound up being a dud. No one wants to waste that much wealth chasing nothing, especially when there’s so much left to be built in the world.
It also creates a put-up-or-shut-up moment for NFTs, a non-inconsequential piece of the larger web3 world. After so much financial investment, human effort and media attention, surely the NFT market has had enough inputs to generate its anticipated outputs. If time is the final missing ingredient, we are willing to grant more. But with Finzer stating his anticipation that useful NFTs are coming shortly, even that potential missing ingredient is diminishing.
If, a half-decade after CryptoKitties came out, billions have been invested, blockchains have matured, crypto on-ramps have improved, and Eminem and Snoop Dogg are willing to bake their NFT avatars into their art, non-fungible tokens are unable to more deeply worm their way into our lives, what more could they possibly need to fulfill their anticipated use cases? At some point — and please at this juncture refer to the opening paragraph of this here post — you begin to wonder if we’re seeing more hope than reality.
The crypto-native are confident enough in their thesis concerning a future where blockchains are central to much of the global economy that no amount of delay seems able to shake their resolve. As someone willing to use blockchain tech if it makes my life better, I am a bit less patient. Show me the utility!