I wanted to review this article because it felt pertinent to my research in a couple different facets. NFT’s (Non-Fungible Tokens) “are unique digital tokens, typically bought with cryptocurrency, representing ownership of a specific item or piece of content, such as digital art, music, or videos” (McGimpsey, 2024). They had a meteoric rise in the public sphere in 2021 and were held as a sign of wealth or exclusivity for that short term. These were items that people invested a good a mount of money into, and they started conversations about the ‘artistic value’ and overall digital art world that hadn’t been talked about before. The NFT also had a rapid decline in value in the public sphere after their quick emergence in 2021, and I was curious about the decline and what can be learned from it, and what the future of NFT’s is.
Despite the significant downturn in the NFT market, there is a reasonable argument to suggest that NFTs do have a future, albeit one that may look different from the frenzied peak of their popularity. The enduring value of some of the original NFTs suggests that the concept of digital ownership and NFTs still holds appeal and potential.
The key to understanding the future of NFTs lies in recognising their foundational technology and the unique value proposition they offer. Blockchain technology, which underpins NFTs, provides a level of authenticity, scarcity, and security in the digital world that was previously unattainable. This technological backbone means that NFTs have a potential utility that extends far beyond the speculative art market.
For instance, CryptoPunks, one of the first major NFT collections launched on Ethereum, still retains significant value. This can be attributed to their status as pioneers in the space, offering both historical significance and a digital rarity. Such original NFTs have become akin to collectible art in the traditional sense—valued for their place in the history of the medium and their scarcity.
Moreover, the potential applications of NFTs are vast and varied. Beyond digital art, NFTs have potential use cases in areas such as digital identity, property rights in virtual worlds, and authenticating and monetising digital content for creators in music, literature, and other arts. These applications suggest a shift from speculative trading to practical utility, which could provide a more stable foundation for the future of NFTs.
Additionally, the challenges faced by the NFT market have prompted the space’s reevaluation and potential maturation. The market’s downturn has highlighted the need for greater regulation, transparency, and a focus on environmentally and economically sustainable practices. As these aspects evolve, they could lead to a more stable and credible NFT market.
Furthermore, the intersection of NFTs with emerging technologies like augmented reality (AR) and virtual reality (VR) presents new opportunities. In virtual worlds or “metaverses,” NFTs can bridge the digital and physical realms, offering novel ways to interact with and own digital content.
While the NFT market has undoubtedly faced significant challenges, the underlying technology and the concept’s potential utility suggest that NFTs have a future. This future will likely be characterised by a shift towards more practical applications, greater stability, and a focus on sustainable growth (McGimpsey, 2024).
Although the NFT market may not be a viable one for long term financial growth I believe there is a lot that can be learned from their space in the digital market. The digital art world has been changed a lot by the insertion of NFT’s. At the end of the article McGimpsey mentions that although NFTs have “faced significant challenges” but that the future market needs to focus on “practical applications, greater stability” and “sustainable growth” (2024). I found it interesting that in some cases “original NFTs have become akin to collectible art in the traditional sense—valued for their place in the history of the medium and their scarcity” (McGimpsey, 2024). Showing that, in some ways, the digital space can have similar value to ‘real world’ physical items. In moving forward from this article I believe there is space to see how ‘new’ and flashy markets such as NFTs can have great impact on how art is perceived. Where NFTs failed is where they didn’t have a forward facing plan, and that hindered the positive affects they could have had on the industry. How can design use the valuation of scarce digital artifacts to have a forward facing plan of stability and sustainable growth?
Source
McGimpsey, P. (2024a, January 31). The rise and fall of nfts: What went wrong?. Forbes. https://www.forbes.com/advisor/au/investing/cryptocurrency/are-nfts-dead/
