Is the NFT sales slump a blessing in disguise?
NFT sales have taken a real beating in this bear market.
Overall, sales are at their lowest point in around a year.
Not only are overall sales down, but the floor price of some of the biggest collections has sunk to lows they’ve not seen in some time.
Bored Ape Yacht Club being one of the most obvious examples here. The floor price is now at around 89 ETH.
Which at the time of writing is $94,504.
That’s a massive ~80% drop from the all-time high of an Ape being around $400,000. And that was only a few months back.
You’ve got to feel bad for these NFT collectors.
But, honestly, I think it’s good for the industry as a whole.
Why this NFT slump might be good in the long term
Give me a second to jump to Reddit and find an example of something…
Here you go.
A quick look on an NFT subreddit and you’ll find tonnes of posts like this one.
Low-value spam attempting to promote a collection.
I quickly exercised my Google-Fu for this collection and found the below.
- A website that no longer works
- 9 listed items on Opensea with trading volume of 0.01
- A Twitter account that hasn’t tweeted since January
This shit is all too common.
Scammers trying to cash in with some quick and easy money through creating a basic generative art NFT collection. One that’s most often derivative of a larger, more successful collection.
It’s these collections and creators that have damaged the trust people have in NFTs and blockchain tech as a whole.
But as the bear market claims its unfortunate victims, more of these “get rich quick” scam artists will be forced out and turn their attention to their next grift.
And that’s a good thing for NFTs.
Cause in the background you’ll find a small number of quiet builders.
People who understand the tech and the usability of blockchain. These folk will be building solutions and businesses built on blockchain tech that will genuinely help people.
It’s a shame for all the people who bought into scam projects, but it’s good for the long-term view of the industry.
Is this the end of community-led NFTs?
I don’t think NFTs denoting membership to a community will go away. But the BS attempts will be driven out of the market.
The only “membership” NFTs left will be genuine. They’ll be tickets of a kind to enter real world communities and events.
I’ve already written on some of the best of these which you can find in this piece on blue-chip NFTs.
In short, the NFT will simply be a badge showing membership to a community.
But that’s not all NFTs will be used for.
The real-world usage of NFTs in the future
A while back I ran in one of the half marathons at Disney world.
Before we even boarded the plane to Florida, we were sent a “magic band”. I was told in no uncertain terms to never lose this. The magic band was…
- My ticket into the parks
- My key to get into the hotel room
- A device to buy food and merchandise to add to my account
If you lose it, you’re screwed.
But it’s an easily wearable band that allows you to streamline your stay within the parks.
I think NFTs will have a similar usage in the future. They’ll be digital ledgers of everything we need which you can access through a personal device of your choice.
We’re already on the path for adoption of this. All we need is someone to figure out the tech to make it easy for mass adoption.
For example, a few weeks back I jumped on the Eurostar to Paris for a few days.
I left my house and used my phone to…
- Pay for the tube to St Pancras station
- Store and show my ticket to get on the train
- Keep a record and code to show that I was up-to-date with covid vaccines allowing me to travel
- Use contactless Apple pay to pay for anything we bought while in Paris
90% of the journey was handled through my phone.
The only part I couldn't use my phone was when I had to show my physical passport to get through immigration.
But what if we could add key info like your travel documents or personal ID to a wallet accessible on your phone as an NFT?
This is something Vitalik proposed when talking about soul-bound NFTs.
In short, you add key documentation to a good crypto wallet as a non-transferrable NFT. You could bind these to an ENS name or something similar (depending on the chain).
Then you allow the user access through a wallet on their preferred device.
The result would be a streamlined method for people to store all of the key information that helps them live their life.
Privacy would need to be at the core of this, especially as personal information would be stored.
However, Vitalik proposes a couple of easy technical fixes that could help anonymise the data. However, I think if we’re talking about passports and drivers licenses etc, there’d need to be something else in there to help keep key information secret from everyone.
Perhaps this is something that could be linked with zero-knowledge proof systems.
What are your thoughts on this?
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