Temporary fall or bubble burst? According to experts, the market for certified digital goods, NFTs, which has been on the rise since its inception last year, has recently plummeted and now needs to be restructured if it is to appeal to the general public.
NFT, Non-Fungible Token or Non-Fungible Token, in Portuguese, is a digital format that allows any virtual object, be it image, photo, animation, video or music, to be associated with a certificate of authenticity registered above. Technologies that underline cryptocurrencies like blockchain, bitcoin.
With $ 44.2 billion generated in 2021, NFTs saw a 75% drop in spending between February and mid-April, according to Chanellyis.
The fall in the value of NFT from the first tweet of Twitter co-founder Jack Dorsey is a symbol of this mini-crash.
The first NFT tweet, purchased in March 2021 for nearly $ 3 million, was auctioned off in April. Its owner hopes to sell it for 48 million, but at the moment, the highest bid is over $ 20,000.
In contrast, sales of virtual land on the Metavers platform (Digital Universe) of the Bored Ape Yacht Club, the most famous club of NTF owners, reached several hundred million dollars in the first 24 hours. May
For the average person, it’s hard to understand this volatile market in the hands of some heavyweights called “whales”, who use their influence to drive NFTs, explains Molly White, founder of an expert website that lists scams around the world. Cryptocurrency.
What basis should be used to set a “reasonable” price that everyone can understand, regardless of the fashion effect?
More than “utility”, says Molly White, is the “status” provided by NFT ownership that seems to establish its value.
NFTs available in some versions, such as “Bored Apes”, give access to very closed groups, so they are the most expensive.
Cryptographic artist “Louis16art” proposes to believe in the author’s reputation, the identity of previous NFT owners, the quality of work, and the techniques used.
Other experts advocate creating a database for first-time buyers, which is maintained by traditional art and digital art experts.
The problem is that most of these assets are sold on “Opensea”, an unregulated market. “And when new technology comes along, scammers are immediately on the lookout,” explains Eric Barbary, an expert lawyer for Racine.
The platform revealed in January that 80% of freely converted images in NFTs on its network have been forged or stolen.
For Molly White, the market will not be able to attract the general public unless “regulation” and “consumer protection” are strengthened.
“It’s like the Wild West,” summarizes Sophie Lano, for whom the bubble burst is an opportunity to start “on a solid footing.”
In addition to the persistent security flaws and legal “loopholes” that can prevent people from buying NFT, how do you simplify a purchase that is difficult for non-technology audiences to understand?
“No one understands anything, but everyone wants it,” says Olivier Lerner, co-author of the book “NTF Mine D’Or” (NTF, Gold Mine).
“The only thing is that the platform is more accessible,” he predicts.