The Rise and Fall of NFTs: A Never Ending Story?

16

September

2024

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In 2020 and 2021, non-fungible tokens (NFTs) took the digital world by storm, bringing with them innovative technology for digital ownership. Verifiable ownership of digital goods such as music, art, and collectibles was made possible by these indivisible, blockchain-based assets (Malik et al., 2023). High-profile sales of digital artwork, such Beeple’s Everydays: The First 5000 Days, which sold for an incredible $69.3 million at a Christie’s auction in 2021, helped bring attention to NFTs (BBC News, 2021). The idea that NFTs would revolutionize the digital economy and the art world was further strengthened by this sale.

The popularity of NFTs spread to the cryptocurrency markets, where certain tokens—like Ethereum and Bitcoin—saw rapid rises in value. Virtual real estate, meme-based NFTs, and digital art have all attained astonishing valuations; two such instances are CryptoPunks and the Bored Ape Yacht Club, whose values have surged into the millions. In June 2021, a CryptoPunk NFT at Sotheby’s sold for $11.8 million, demonstrating the speculative frenzy that was driving the market (Howcraft, 2021).

The NFT market’s expansion was not without difficulties, either. Because NFTs and cryptocurrencies are speculative in nature, there was a bubble-like situation where values were frequently not in line with the inherent worth of the digital assets. The NFT market started to fall significantly by the middle of 2022. The value of many investors who had entered the market early on suffered a sharp decline in their money. For instance, in a 2022 auction, Jack Dorsey’s first tweet—which was originally auctioned for $2.9 million—failed to draw bids beyond $10,000 (Handagama, 2023).

NFTs are still useful, but the market drop has made clear how erratic speculative digital assets can be. The rise and fall of NFTs serve as a warning about the dangers of making speculative investments, especially in developing markets. Nevertheless, will the NFT hype rise again like it did in 2021? In my opinion, the bubble in 2021 has shown the potential and the essence of what the NFT market could bring. So in this case, if the bull market cycle for the crypto space rebounds, then the possibility of pixelated art and collectibles hitting the millions will re-emerge.

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References:

BBC News. (2021, March 11). Beeple’s NFT digital art nets £50m at Christie’s auction. https://www.bbc.com/news/technology-56362174

Handagama, S. (2023, May 11). ‘Jack Dorsey’s first tweet’ NFT went on sale for $48M. It ended with a top bid of just $280. CoinDesk. https://www.coindesk.com/business/2022/04/13/jack-dorseys-first-tweet-nft-went-on-sale-for-48m-it-ended-with-a-top-bid-of-just-280/

Howcraft, E. (2021, June 10). ‘CryptoPunk’ NFT sells for $11.8 million at Sotheby’s. Yahoo Finance. https://uk.finance.yahoo.com/news/cryptopunk-nft-sells-11-8-154742975.html

Malik, N., Wei, Y. “., Appel, G., & Luo, L. (2023). Blockchain technology for creative industries: Current state and research opportunities. International Journal of Research in Marketing, 40(1), 38–48. https://doi.org/10.1016/j.ijresmar.2022.07.004



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The Metaverse’s Disruptive Impact on Cultural Experience: The Aquarium of Paris and its Jellyfish NFT Collection (2/2)

18

October

2023

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In the last post, I talked about the aquarium de Paris and their jellyfish NFT collection. In this post the focus will be more on the interaction between the creator and the consumer, and I will share my thoughts on how I think emerging technologies can help cultural experiences reach more people and increase engagement.

As mentioned in the last post, people can buy the jellyfish NFT’s. By owning these NFTs they can be more educated on jellyfish as the NFTs are scientific replicas of the real jellyfish project (Aquarium de Paris – Metaseum, n.d.). Additionally, the NFTs also have perks to them such as unlimited and free access to the aquarium and in-store discounts. Additionally they are invited to VIP events and earn access and invitation to events such as the arrival of the polyps of the purchased species or to the establishments night club (Desk, 2022). All of these initiatives makes it possible to create a web3 community for people interested in the marine world, web3, and art enthusiasts. This way, the aquarium is able to interact more with their visitors and create a strong community. They even take this to a next level by opening their doors in the near future in the metaverse (Desk, 2022). In here, there will be even more possibilities to let people interact with the aquarium and make the cultural experience more widely accessible (Gursoy et al., 2022).. In this metaverse aquarium there are no limits and visitors can swim in an aquarium, run through the corridors, or even interact with artwork (Desk, 2022).  

Personally, I think that the metaverse, NFTs and other emerging technologies are a great way to stimulate people to experience culture. A new community is created which is more widely accessible for people. Additionally, I think that people will be more motivated to learn about culture when there is more interaction present, as it has been proven that interaction is a great way of learning (Dahan et al., 2022). This can be done through the extra perks of NFTs, the limitless online world, but also through the learn to earn principle, where visitors will learn to earn crypto currency, which is reusable in the metaverse. However, I am unsure about whether this virtual experience can completely take over the real world experience of experiencing culture. Also, I don’t think the use of emerging technologies should be the goal, instead they should be the means to the goal of offering a wide range of people a cultural experience.

Sources

Aquarium de Paris—Metaseum. (n.d.). Retrieved September 14, 2023, from https://www.metaseum.space/aquarium-de-paris

Dahan, N. A., Al-Razgan, M., Al-Laith, A., Alsoufi, M. A., Al-Asaly, M. S., & Alfakih, T. (2022). Metaverse Framework: A Case Study on E-Learning Environment (ELEM). Electronics, 11(10), 1616. https://doi.org/10.3390/electronics11101616

Desk, A. P. (2022, December 9). The Aquarium de Paris and Metaseum launch the world’s first scientifically accurate NFT collection. AlexaBlockchain. https://alexablockchain.com/the-aquarium-de-paris-metaseum-launch-worlds-first-scientifically-accurate-nft-collection/

Gursoy, D., Malodia, S., & Dhir, A. (2022). The metaverse in the hospitality and tourism industry: An overview of current trends and future research directions. Journal of Hospitality Marketing & Management, 31(5), 527–534. https://doi.org/10.1080/19368623.2022.2072504

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VR Dating: More or Less Superficial?

13

October

2022

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Bored of swiping and wanting more interesting dates? Perhaps a virtual reality (VR) dating experience in the Metaverse might be for you! 

One of the dating applications available on this platform is called “Nevermet” where users can have a dating experience entirely in the Metaverse. Nevermet’s CEO claims to want to change the online dating market, where physical attraction is not the only factor that matters (Harrison, 2022). With this, Nevermet users can only use a virtual image of them (with any customization such as tattoos, piercing, skin colour etc.) for their profile. After a user is matched with their partner, they can decide to go on dates at an imaginary location on Metaverse’s VR world. These imaginary locations are facilitated by the Planet Theta platform, which operates as a social virtual reality where Nevermet users in matches can pick and visit any location on their date (Tolcheva, 2022), such as an apocalyptic wasteland or a restaurant underneath the sea. 

The CEO also believes that more online relationships will be created and become successful in the future as VR technology becomes more immersive in the future (Harrison, 2022). It is also interesting to point out that a lot of things we do nowadays are becoming more and more immersive in the online world. Among the developments and growing popularity in Web 3.0, some of our possessions such as NFTs and Cryptocurrency, or our online persona that we spent time and effort to craft only exist on the internet. Some new dating apps on Metaverse even focuses on these digital possessions, such as “MetaMatch”, where under a similar objective of making online dating less superficial, users with similar psychographs based on their NFT possessions would be matched up (Buckler, 2022). 

Some may see this as allowing users to connect beyond physical attractions, but we could also see this as a move from one superficial focus in dating to another. For example, would a date matching based on the type of cars users own or the shirts that users like sound as equally superficial as common NFT possessions? Also, looking at Nevermet, would not the virtual profile images still allow users to superficially judge each other based on how attractive they are online?

Afterall, we are still at an early stage of Metaverse development, some of these applications are not fully available yet. If the VR world truly becomes more immersive, a lot more aspects of our personality could be integrated online, and superficiality could be combatted in the future. Only time will tell, and the choice to either match up with someone by natural circumstances in the physical world, or by our online persona, is up to us.

References:

Buckler, N., 2022. Metaverse Dating: Can You Find Love Based on What NFTs You Hold?. [online]         BeInCrypto. Available at: <https://beincrypto.com/metaverse-dating-find-love-based-nfts-you-        hold/> [Accessed 13 October 2022].

Harrison, M., 2022. People Are Going on Dates in the Metaverse and It Sounds Very Strange. [online]      Futurism. Available at: <https://futurism.com/the-byte/dating-metaverse> [Accessed 13 October 2022].

Tolcheva, S., 2022. Metaverse Dating: What Is It and How Does It Work?. [online] MUO. Available at:    <https://www.makeuseof.com/metaverse-dating-explained/> [Accessed 13 October 2022].

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NFT + ART = ?

5

October

2021

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The first digital collection “Everydays. The first 5000 days” auctioned by the British auction platform Christie’s was closed in March of this year. The winning bidder obtained the “Non-Fungible Token” (NFT) for the work at a price of nearly 70 million U.S. dollars (69,346,250 U.S. dollars). The occurrence of this incident to a certain extent subverts the concept of the traditional collection market and has brought unprecedented impact to the entire art world and the alternative asset investment market.

“Everydays. The first 5000 days”

What is NFT?

NFT means non-Fungible tokens, which are indivisible, irreplaceable, and unique. Different from ERC-20 tokens, because it is inseparable, it guarantees the uniqueness of each one from the code level. Therefore, NFT can represent physical assets and their ownership in a unique way on the blockchain. You can also understand it this way: there are no two identical snowflakes in the world, so you can use a snowflake to represent something unique in the real world, but the significant difference is that snowflakes cannot be circulated on the chain, so no one will use snowflakes to hype, although it is scarce enough in characteristics.

Use Cases

The current use cases of NFT are mainly concentrated in categories such as collectibles, artworks, games, and virtual worlds. But other categories such as sports, fashion, and real-world assets are also developing steadily. 

In terms of sales volume, collectibles are currently one of the most popular applications of NFT. For instance, there is a market where NFT technology is used to create tokenized versions of celebrity athletes and celebrities. The fantasy football game Sorare allows players to collect “limited edition digital collectibles” of their favorite athletes from 100 football clubs, which has successfully attracted the attention of football fans. And now, this market is booming.

Fantasy football game_Sorare

The application of NFT in the gaming industry is also very extraordinary. Gamers are the perfect target market for NFT because they are already familiar with the concept of the virtual world and currency. But unlike traditional games, NFT allows players to have real ownership of their digital assets, and thus creates a way for players to make money by creating and developing in-game assets, which gradually forms a new economic model. Players can learn encryption knowledge by playing games without taking any financial risks, and more importantly, they can earn ETH and NFT. A player in developing countries can earn as much as their monthly incomes by just playing games like Axie Infinity and Cryptopick.

Axie Infinity marketplace

For digital artists, one of the biggest challenges is to protect their works from copyright infringement. The emergence of NFT technology provides an excellent solution to this problem because they provide proof of ownership and authenticity. Starting in 2020, as more and more museums and galleries are forced to close due to the pandemic, many artists have now turned to NFT and online exhibition halls.

Home page of Rariable

Challenge

Currently, there is a problem with the NFT issued on the two larger public chains in the NFT ecosystem, Ethereum and Flow. Although the cost of the NFT issued based on the public blockchain networks is almost zero and NFT itself cannot be modified, it also makes the cost of deceit negligible at the same time. Even though some NFT issuance platforms have pre-review, follow-up reporting, and other preventive measures, counterfeiters are still hard to completely eliminated. 

Prospect

At present, the application spectrum of NFT is still relatively narrow, concentrated in the niche circles of games, encrypted artworks, and card collections. But I think the possibilities and potential of NFT are limitless. One of the obstacles to its large-scale application might be the lack of extensive education on blockchain technology and the world of encryption. This can be partially ascribed to the geek, rigid and technology-oriented natures of NFT and blockchain technology. Hence, to increase the acceptance rate of the general public, it is fundamentally necessary to further simplify it and make it easy to use. Besides, if the increasing interests from the capital market can greatly enforce the market supervision on NFT trading in the future, the liquidity of NFT in the global market will be substantially increased.  At that time, I believe almost everything can be turned into NFTs, creating more interesting and exciting use cases.

Resources:

Beeple’s masterwork the first purely digital artwork offered at Christie’s. (2021, March11). CHRISTIE’S. https://www.christies.com/features/Monumental-collage-by-Beeple-is-first-purely-digital-artwork-NFT-to-come-to-auction-11510-7.aspx

Clark, M. (2021, August 19). NFTs, explained: what they are, and why they’re suddenly worth millions. The Verge. https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq

https://sorare.com

https://marketplace.axieinfinity.com

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Blockchain technology in the art industry

26

September

2021

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Started as a tool for provenance and authenticity evolved to a new approaches to collect, and even create, new art forms. The impact of blockchain technology within the art industry can’t be denied anymore. It is clear that this trend, which is still al little vague at the moment, will gain popularity the coming years. How is blockchain applied within the art industry? And what does this technology bring to the art industry?

Non fungible tokens (NFT’s)

The evolution of non-fungible tokens (NFT’s) allows artists to register their artworks through blockchain technology and translate these artworks into securable sellable assets. The digital art piece receives an unique serial number which entitles the original piece a form of provenance. As the popularity of an art piece increases, the more people are willing to pay for some rights to the original digital art piece. In contrast to physical art pieces, NFT art can be shared and used everywhere.
To demonstrate the growing popularity of NFT art; traditional and well-known auctioned Christie’s has opened has opened its first auction only focused on digital artworks by one single artist. This new-born platform is called Beeple.

Blockchain as fraud preventer

One of the biggest challenges of art markets is to verify the authenticity of the art works where the artist is not alive anymore. A report, published by the Fine Arts Expert Institute (FAEI) in 2014, stated that more than 50% of the artworks they investigated were falsified or not addressed to the right owner. The use of blockchain could change this. Blockchain is believed to be one of the most secure manners to transfer digital data at the moment. This reason lies in the fact that there is no centralized version of the information accessible and hackable for someone with bad intentions. Blockchain is able to track and verify authenticity via timestamps on transactions.

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Non-Fungible Tokens – Only a Hype?

18

September

2021

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Many of you might remember the Bitcoin (BTC) hype end of 2017. At its peak, BTC rose to $19,783.06 and many people couldn’t understand how a digital coin is worth a little fortune. A digital coin consisting of 0’s and 1’s. And the same is happening again. This time it’s mainly digital art, so-called non-fungible tokens (NFTs). To give you an impression, here are some examples:

Everydays: the First 5000 Days

“Everydays: the First 5000 Days” is a digital work of art created by Mike Winkelmann, known professionally as Beeple. The work is a collage of 5000 digital images created by Winkelmann for his Everydays series. Its associated NFT was sold for a whopping $69.3 million at Christie’s in 2021, the most expensive NFT and among the most expensive works by a living artist (Forbes, 2021).

CryptoPunk 7804

This low-resolution pixel art was generated by an algorithm showing a blue alien wearing a hat and puffing on a pipe. Many people laughed when Dylan Field said he owned the “digital Mona Lisa”, but he wasn’t totally wrong. Earlier this year it was sold for 4,200 Ethereum, worth about $7.5 million (Protocol, 2021).

Etherrock

You might think the crypto and NFT scene is completely nuts, but the most hilarious art was sold in August. A JPEG of a rock was sold for $608,000 (CNBC, 2021) which is now worth $1.3 million.

As the examples show, we are in the midst of a new mania which not only shows its good sites. The Financial Times sees also fraudulent activities during this hype. “NFTs are just the latest way that what we might call the cryptosphere has found to make a quick buck.”, says Kelly. Frances Coppola, a finance and economics commentator, agrees that it’s solely about getting rich that drives everything as it is with all the crypto projects right now (Financial Times, 2021).

Despite all the criticism, the underlying idea is actually good. While physical art is by nature scarce and not (or hardly) replicable, and ownership is typically clear, digital art and digital artists have historically suffered from a more limited ability to profit from digital artwork. NFTs are a gamechanger for the digital art scene, increasingly allowing digital artists to make a living off their work as the examples show (Forbes, 2021). Thus, I am sure that NFTs are not only hype but here to stay. Most likely prices will come down as it was with BTC, but it’s a huge opportunity for artists to protect their work.

What do you think about NFTs? Have you heard of it before? To all the people who own an NFT artwork. Please comment below on what you have created or bought!

References

https://www.forbes.com/sites/abrambrown/2021/03/11/beeple-art-sells-for-693-million-becoming-most-expensive-nft-ever/

https://www.protocol.com/figma-ceo-cryptopunk-nft

https://www.cnbc.com/2021/08/23/people-are-paying-millions-of-dollars-for-digital-pictures-of-rocks.html

https://www.ft.com/content/2757d760-c29e-4834-8636-7601adbacf47

https://www.forbes.com/sites/hannahmayer/2021/09/03/nfts-what-the-hype-is-about-and-where-they-are-headed/

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What are NFTs?

14

September

2021

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Have you also heard about NFT but don’t really understand the concept?

In the last couple of months I have heard once or twice people mentioning NFTs, so I decided to really get into the subject and learn exactly what they were.

What are they and how do they work

NFTs stands for Non-Fungible Tokens, they have been around since 2014 but have really become a trend in the past few years. Non-fungible means that it is a non replaceable item. As such it can be anything that is digital and irreplaceable such as an image, a meme, a video, a music, a tweet and so on. People have spent millions on some NFTs, as an example; the twitter co-founder sold his first ever tweet as an NFT for more than 2.9 million dollars.

Once you buy an NFT that means you own the ‘original’, people can still find it and see it on the internet but you become the owner. The NFT contains a built-in authentication, which proves this ownership. Without going into too many details, NFTs exist on a blockchain which is distributed on a public ledger, maintained by thousands of computers around the world, that record every transaction (a bit similar to a bank when it comes to your bank account). If you have a hard time understanding this, I would suggest watching the following youtube video where the concept of NFT is explained as well as blockchain: https://www.youtube.com/watch?v=Oz9zw7-_vhM

You might then think that cryptocurrencies are NFTs but no, cryptocurrencies are not NFTs. For example a doge coin is fungible because you can simply trade one for another dogecoin and you’ll have exactly the same thing. The only similarity they share is that both have records on a blockchain.

What is the purpose of NFTs

Anyone could create anything digitally and sell it as an NFT, so it can be a huge opportunity for artists or even some companies. As a buyer on the other hand you could hope for the value of it to go up and make a profit out of it, until then you have the rights to use it as you like. But in my opinion NFTs are quite uncertain as we don’t know if this trend will continue or just stop at a certain point.

People might think that it is the new digital art collecting. Do you think it could be the future of art collection? I definitely believe that it has become a new way of collecting art but I remain unconvinced on whether it will continue on forever. In the end how we value things is shifting because of technology.

References:

https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq

https://www.forbes.com/advisor/investing/nft-non-fungible-token/

https://www.bbc.com/news/technology-56371912

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