People who have been diligently observing the crypto/blockchain market from the end of 2019 until recently would have noticed that NFTs did not go through a gradual curve of adoption but rather an explosion! The first few months of 2021 saw the NFT market skyrocket right from the sea level into the stratosphere in terms of pricing, adoption, and endorsements.
While this might have been an extremely lucrative movement and movement for people who poured into this space just to make some money, this does not represent a healthy growth rate for any market, especially considering how paced and healthy the organic adoption should be. It kind of sounds similar to the story of Indominus rex in Jurassic World as opposed to Tyrannosaurus rex!!
As it might have been expected… Or it might not have ever been expected…, The NFT market plummeted down with an almost congruent impulsiveness as it went up! This meant that NFTs had suffered collective wrath being abhorred and abominated by the masses… And it included even those who did not know the possibilities and intricacies of such a technological marvel.
This would put NFTs in a situation… At least for a lot of uninitiated people (which, sadly, is a major chunk of the global population) of needing some silver bullet as much as Popeye the sailor needs spinach after being thrashed! This brings us to the billion-dollar question of what could be the remedy for the situation.
Turns out that the answer would be to create an ecosystem where NFTs would not be just confined to a limited perspective of being short-term investments based on meaningless art and intangible bloating of their values but proper arena where the fullest potential in terms of non-fungibility and immutability could be recognized and utilized.
Does such an arena exist today? Yes! It might be in the most nascent stages but it does exist. It is called Web3, and as the name implies, Web3 is the latest version of the web and it is a quantum leap from the predominantly existing version of the web called Web 2.0. Unlike Web 2.0 which opens up the access of the web to not only consume but also publish information, Web3 opens up opportunities for people to not just furnish and consume but also monetarily benefit for the time, effort, and information they invest on the web, and that too, without intermediaries consuming a chunk of the revenue they generate.
Web3 inches closer to the ideal version of the web and the way it was envisioned to start with. Web3 would bring in a new era where possibilities of profit are not just confined to a handful of large corporates but is given to all users who contribute towards the enhancement of the experience.
One of the principle pillars of Web3 is to ensure an uncompromising digital identity not just for people but also for assets. The assets could include virtual real estate, gaming assets, collectibles, and even something as simple as a domain name. It is at this juncture that relevance and importance of NFTs comes into play. NFTs, at the very basic level, are tokens that reside on blockchain. Unlike crypto coins, NFTs are non-fungible and there is no other equivalent of a particular NFT that exists even in that specific digital ecosystem.
Let us now combine Web3 and the possibilities that are unlocked with the introduction of NFTs. With NFTs in place, it is now possible to have an uncompromising identity in the digital ecosystem which is not only undeniable and immutable, but also transparent and verifiable. This could mean that you could get the credits… Both emotional and commercial… For your creations in the Web3 space. Web3 gaming extends the longevity of gaming assets beyond the life of the game as they are presented as NFTs. Therefore, gaming assets, when presented as NFTs, can be sold on marketplaces, opening a new commercial dimension to gaming. In the long run, Web3 and metaverses as an extension could enable entirely digital lives for people, and if that ever happens, then every element of that person in the virtual world… Be it that identity or attire or ownership records of virtual properties or anything else in the digital world for that matter would be presented as NFTs.
Closing words
Sometimes, the resurgence is stronger than the first appearance. We have seen this happen in the case of e-commerce, and the second wave of e-commerce was so powerful that the vestiges of it stay powerful even today.
In the same way, NFTs might not have had the best story of sustaining the market in their first wave. However, they are bound to succeed in the second wave if a proper, holistic, and a powerful use case exists… and that use case is none other than the newest, more immersive, and more democratic version of the web called Web3!
Author:
Ramkumar Subramaniam, CEO and Co-Founder at Guardianlink
