What Is the Future of NFTs: What to Know Before Diving in?
Today, the emergence of NFTs on the market has become a new milestone in the digital world. Based on blockchain, non-fungible tokens have become a unique asset that has attracted the interest of large investors, collectors, corporate executives, and those who like to own exclusive things. But a lot of people are wondering what the future of NFT is. Let’s look at this guide, where you will discover some prominent future predictions.
Table of Contents
Community, Culture, and Utility
Community, culture, and utility are three pillars on which the value of NFT collections is built. When calculating the value of NFT collections, it can be a combination of several or just one aspect. Some of the best examples are the best known: Bored Ape Yacht Club is the best example of activating community; both Generative art (Artblocks) and CryptoPunks have advanced NFTs in the cultural realm, and the usefulness of gaming NFTs is a great indicator of how innovation can take place in space.
The NFT market may be volatile, but it has potential. Volatility allows investors to develop and implement strategies like buying low and selling high, creating astronomical profit opportunities. In addition, market volatility provides an excellent opportunity to filter out the strongest projects and owners from the weakest.
People are looking for more functionality. Potential buyers are eager to know: Does this NFT make me part of a great community? Am I going to get premium access to exclusive drops? The creators of NFTs are aware of the need to reduce the added value, and we will see more creative ways to use the NFT utility appear. And NFT collections that do not contain any of the above offers will be progressively filtered out.
Knowing that delivering value to customers has always been an integral part of marketing, the creators of NFT began to develop more attractive utilities. For example, entertainment and travel companies sell NFT tickets. This way, their customers can exchange tickets without contacting customer support.
In addition, the metaverse has become a fast-growing industry. JP Morgan Chase recently stated that the metaverse would generate $1 trillion in annual revenue for various businesses. NFTs will become the building blocks of these digital worlds, while coded utilities will unlock opportunities such as VIP events or unique discounts.
Democratization of Art
The digitization of art has brought many changes and has altered the answers to the questions, which are:
- Who owns art?
- Who has access to art?
- Who can earn a living from art?
- Who is considered an artist?
Now everyone can view artwork wherever they are through the Internet. A specific physical location is no longer needed to have access to art. Not only can anyone view art from their phones and computer screens, but the emergence of virtual reality has allowed people to visit museums and galleries and even explore exhibitions from their living rooms.
With NFTs, artists can create art and distribute it online, bypassing the traditional gatekeepers that, for centuries, have dictated art and the people that can access it. Moreover, artists can be supported directly through blockchain transactions by their audience, and they will be in control of their careers.
Increased Diversity and Representation
The digitization of art and the growth of NFTs and blockchain technology have shifted the influence in space so that our world is better represented through art. With the democratization of arts and art spaces, there is no more space for different people and groups that are underrepresented in this space.
Thus, this is the goal of art, which can give us glimpses into experiences and worldviews that are different from ours so that we can have our perspectives expanded and challenged.
Now the art industry focuses on elevating diverse voices and providing crypto education and opportunities for BIPOC women and underserved communities and creators.
Fractionalization and Patronage
There are innovative technologies that artists can take advantage of to break free from the grip of the traditional gatekeepers of art. Because of the emergence of these technologies, new media will be used increasingly to create and deliver art. For example, artists are already creating art on digital canvases, making their work accessible through AR and VR. They also prioritize the experience they generate over a stative, passive object.
With the advent of new technology, an improved imaginative renaissance always comes.
Can we see works that are wearables or have everyday utility? Can artists gamify the art experience for their followers? As more people enter this space, technology will only grow and advance.
Media and New Methods
All these elements will lead to a future with more independence and freedom for artists. With NFTs, fans can patronize an artist directly, so artists won’t need to rely on corporate patronage, brands, and mega collectors asking them to compromise on their creative vision.
Even though there will always be a place for advisers and art curators to help guide our experience and understanding of art, artists will have more freedom to create the kind of art they want, knowing that they will find the audience willing to pay for their particular style, message, or medium.
Being able to create their NFTs and distribute them online through their choice platforms means that artists can take more control over their livelihood. Collectors would also have increased access to a wider variety of art, giving them more freedom to collect the art they want.
A More Secure Transaction Platform
Paper-based transactions are inefficient, require more staff, and tend to get lost. However, they have one benefit over the cloud documentation used today: it is often easier to prove the authenticity of a document. Documents stored online can be hacked, copied, or altered, costing companies millions of dollars annually.
NFTs of the future may solve both of these problems. They provide a new level of security for digital transactions while increasing efficiency. Any participant in the transaction can see in real-time the journey of NFT from creation to the final version, as well as know exactly who else participated in that journey.
It creates a virtually unhackable system that is encrypted, easily distributed, and can not be modified. Identity theft is likely to become a thing of the past. The asset that represents the NFT is tracked and verified for existence, which increases the confidence of all parties in the accurate and open transaction.
Substantial Influx of Private Investors and Creators
Once investors and creators understand all the potential benefits of NFTs, interest in the industry will skyrocket. We are just in the very beginning stage right now, which means there are only a relatively small number of early adopters in this field.
According to the numbers, there are only about 360,000 NFT holders around the world. However, NFT sales have grown 131 times between 2020 and 2021, and the NFT market is currently valued at $40 billion and rising.
As interest in this industry continues to grow, all of these new players will be able to go through an adaptation period to learn how to navigate new technologies. Investors will learn about the intricacies of smart investment in the metaverse, and creators will quickly learn how to make the most of their newly expanded creative options.
Interoperability Will Be Essential
The ability of NFTs to create community and provide access privileges on the Internet and in real life makes them an ideal tool. As NFTs and metaverses develop, their use will become more complex, and interoperability between metaverses will be as important as their usefulness in real life.
As the metaverse reflects the real world, interoperability is the basis of its success. The metaverse is eager to create fluid socio-cultural interactions beyond our physical world. In a broader sense, the metaverse will offer a greater variety of content, and interoperability will expand utility possibilities, providing a seamless experience and higher value for users.
Digital transformation and the adoption of blockchain technology also mean that the employment landscape is changing. More people are working on NFTs, cryptocurrencies, and blockchains than ever before, but this will become more and more common. In 2021 alone, the number of job postings related to crypto jobs grew by 118%.
NFTs and blockchain will bring more transparency to the digital realm as their ability to prove digital ownership will serve as an economic incentive for adoption. Moreover, it seems that Gen Z is more likely to invest in cryptocurrencies and NFTs than stocks compared to millennials. Their investments will fuel the markets as digital assets become more popular. Like assets, these sectors will grow as young people accustomed to digital technologies mature.
Greater Ease of Adoption is Needed
The NFT market will strengthen and grow further when it becomes easier for more people to accept it. That’s why we need to make the NFT journey less complicated and more recognizable through continuous learning from providers and mainstream media.
Even though the NFT marketplace offers one-click login options, new users will indeed be frustrated from using the platform if they have trouble creating an account or trying to purchase and sell NFTs. Twitter and Discord are the most effective social media platforms to keep your audience informed and explain the entire NFT buying and selling process.
Video Gaming Takes Over
There has been much speculation about the video game industry’s reaction to NFTs. Some companies already offer digital assets as part of blockchain games like Ember Sword, but these have yet to become mainstream in the gaming community.
Gaming is a vast market, and digital assets such as NFTs can fit perfectly into this virtual world, offering players the opportunity to buy unique assets for their games. But for some people, it can blur the line between playing for fun and playing for profit.
A True Win-Win Technology
NFTs can significantly reduce transaction processing costs for both the buyer and seller of a good or service. The charges and expenses associated with these transactions, which are often a function of the analog systems used to process them, can be significantly reduced. It may also create an opportunity to increase transaction volume. NFTs are easy to mint, and one person can mint several in an hour – something they can not do with physical or digital documents.
It is difficult to comprehend all the benefits we could see are the result of the widespread adoption of NFTs. The blockchain technology behind NFTs has already changed the world, and it will continue to change as companies address issues like interoperability and widespread adoption by average consumers.
Instead of being a costly novelty for the people who already have everything else, NFTs of the future will be judged on how efficient and secure their day-to-day business is. There are no losers in that world, except perhaps for the unattractive characters who use today’s systems.
To wrap up, it’s not easy to predict trends in technology and make certain statements about the development of NFTs. One thing is clear: NFTs are not going anywhere. There are some good indications that tokens will become major assets and will be more useful in our daily lives. As the metaverse quickly takes shape and becomes more widespread, non-fungible tokens can completely change how we buy, sell and create, both online and in the real world.