The Real Potential of NFTs
Meta founder Mark Zuckerberg announced that NFTs are coming to Instagram. What this breakthrough means is still unclear. The main focus is on how long the NFTs will last in this platform.
By the end of 2021, NFTs were quite popular. It was heard by everyone and its revenue totaled $ 40 billion. Twitter has taken more innovative steps compared to Meta by allowing users to use NFT as their profile picture.
Well-known brands from Spotify to Louis Vuitton produce NFT collections. However, the popularity of NFTs is declining. It is known that both NFT trading and NFT searches on Google are decreasing.
NFT can be defined as a digital document that serves to identify who is the real owner of a digital product. It can be thought of as real estate titles, but it is based on an ecosystem of paper and electronic records, legal standards, and expert commissioned institutions. NFTs are less costly and practical than real estate deeds. NFTs have significant potential to drive the digital economy, as private property is at the center of property capitalism, as well as economic activity increasingly online.
Scarcity and Originality
NFTs offer a different perspective on digital trading. Scarcity and authenticity are two features the digital world lacks. Human nature has an instinctive scarcity mentality. Scarcity and originality have produced limited frames to the digital world. The piracy of everything digitally has undermined both technological progress and the long-term innovative mindset. Bitcoin, which has created a reliable space by getting out of this mess, has become a trillion-dollar asset class. Bitcoin’s “proof-of-work” system has likewise managed to ensure scarcity and authenticity.
As it turns out, NFTs offer scarcity and authenticity for digital products. However, this should not be seen as the only way. Banks, platforms like Twitter and Apple are doing this within their industries and are working to address the security concern. It provides an alternative route, although its reliability is questionable. NFTs provide a common and inexpensive way to deliver reliable scarcity and authenticity online. It brings new looks to digital commerce.
Art
A year ago, digital artist Beeple succeeded in drawing attention to NFTs in the art field when Beeple sold Everydays, an NFT mosaic of daily digital images, for $69 million at Christie's. An industry of galleries, museums and consultants supports the fine arts market, along with vintage documents and high-tech gadgets. NFTs offer a defense against digital fraud. The lower the price of art, the more scarcity and originality it requires a scalable platform to create.
Brands
Scarcity and originality are very important for brands. For example, Chanel might sell sunglasses for $500 because they are rare items for wearers. However, branding is beyond enrichment, it has the power to influence people. The branded version of two exactly the same products is bought more than the other. A strong ecosystem of intellectual property laws and institutions enables the owners of a brand to control scarcity, and NFTs empower this system in the digital economy.
Things
One of the keys to NFTs will be portability between environments. As with Twitter, Instagram does not have a Twitter blue tick check, but the NFT equivalent of the Twitter blue check can act as a sort of NFT deed, providing reliable authenticity. This is the metaverse vision that can help digital items feel the same as physical items. As the digital world becomes more active, we will need a space where we feel we belong.
As a result, credible scarcity and authenticity will unlock real value in digital markets where fraud and bubbles are rampant.
