Non-Fungible Tokens (NFTs) have emerged as both pioneers and provocateurs. NFTs represent unique digital assets, often tied to digital or physical art, music, videos, or other forms of creative content, authenticated and verified through blockchain technology.
The allure of NFTs lies in their potential to revolutionise ownership and provenance in the digital space, offering creators new avenues for monetisation and collectors the opportunity to possess exclusive digital artefacts. However, this revolutionary technology is not without its sceptics, as concerns about market volatility and the potential for copyright infringement have cast a shadow over the seemingly boundless possibilities of the NFT market.
These concerns about market volatility and the potential for speculative bubbles have left many wary of investing in NFTs, with fears of a market correction or disillusionment looming over this digital frontier. As the world navigates the uncharted waters of NFTs, the convergence of excitement and apprehension paints a complex portrait of a transformative technology sparking a multifaceted conversation about the future of digital ownership and creativity.
This was a main panel discussion at the recent London Blockchain Conference which was moderated by CoinGeek’s Becky Liggero and included:
- Sean Griffin (ObjectLayer Co-founder);
- Jackson Laskey (AssetLayer Co-founder and CEO);
- Holger Vogel (Independent Consultant);
- Christopher Messina (Tanbreez Mining CEO);
- John ‘Jack’ Pitts (SLictionary Co-founder).
A critical discussion of popular NFTs
Bored Apes NFT and utility
The panel discussion focused on the Bored Ape NFTs phenomena. Each Bored Ape NFT is essentially a one-of-a-kind digital illustration featuring cartoonish, anthropomorphic apes, each with distinctive traits and accessories.
While these NFTs saw significant adoption when they launched, their popularity quickly waned. Laskey noted that this is because of how limited these NFTs are – both in utility and because only 10,000 were created. ‘When I look at tokens and applications utilising these tokens, I want to bring as many users as possible into that ecosystem. Why would I want to build a game for 10,000 people when I can build one for 10 million people?’
By comparison, Laskey’s Duro Dogs NFT collection is targeting a much wider market.
Duro Dogs is an NFT pet game launched on the BSV blockchain. Users can get started in this game for free via their HandCash wallet. All you have to do is connect the application to the Duro Dogs website. Each user will receive a unique free dog that the platform randomly generated based on an on-chain serial number.
Financially restricted NFTs
These issues were echoed by Pitts who noted that Bored Apes are also limited by its financial structure. Bored Apes lack a revenue stream, and their owners can solely profit through speculative sales. By comparison, possessing an NFT featuring a dictionary definition on Dictionary allows users to receive a share of the application’s earnings.
SLictionary is a communal dictionary that lets contributors monetise their entries. SLictionary.com creates value through NFTs by entering words and definitions into the platform. A contributor can tokenise, trade, and own the definitions. Moreover, owners can charge people to see their definitions.
NFT interoperability and scalability
Other factors to consider are interoperability and scalability of the NFT in question, says Griffin. He added that the growth of the sector will hinge significantly on NFT interoperability as typically, applications need to establish APIs for effective communication.
As the number of apps within any given ecosystem rises, the expense associated with this communication becomes prohibitive for many. He added that over time, users will seamlessly transfer digital items across various platforms, liberating their purchases from the constraints of a single point of origin and storage. Currently, the process involves entering a closed ecosystem to buy a movie or music, and the content remains confined within that walled garden.