Although it is no longer news that NFTs (or non-fungible tokens) are overhyped, it would be delusional to dismiss the notion that the emerging industry is beneficial to the decentralised economy as a whole.
Notably, NFTs have proven to be very valuable to the creators’ economy and despite being in its infancy, has attracted so much wealth in the space over the past few years. However, one major setback that may hamper growth in the sector moving forward is the existing community of users.
In a previous publication, we were able to establish that the existing NFTs adopters perceive the initiative as a quick money-making scheme. As such, this has been a major concern for many forward-thinking crypto enthusiasts who are now, more than ever, questioning whether NFTs are truly the future of art.
According to a publication by the Financial Post, the bubble-mania around NFTs will eventually burst. In the post, the FP made reference to the record-breaking auction of the digital sketches by the artist Beeple which sold for about $69 million.
The FP further revealed that the pseudonymous buyer, MetaKovanr who coincidentally happens to be the world’s biggest NFT fund, may have made the acquisition as a form of PR expenditure to steer up interest in the space.
Surprisingly, the NFT market emerged in full force after the sale of the Beeple art collection, with the NFT market generating more than $23 billion in trading volume for the year 2021 alone.
Given the influx of people into the NFT space and their insatiable drive to purchase costly artworks in the hopes of selling them for an even higher price, it’s safe to argue that the existing community of users is more profit-oriented than utility-oriented.
It’s also for the aforementioned reason that there’s been quite a lot of hype recently around NFTs. This then begs the question that if NFTs solely thrive on hype, can they stand the test of time?
That said, we must also establish that if NFTs must scale past the current phase of adoption, then creators as much as developers must look beyond the hype. The next question would then be, looking past the hype, what does the technology actually require to scale?
NFTs require a utility-oriented community to thrive
Most crypto/blockchain initiatives have a user community in common, implying that the type of community that supports a project has an impact on its eventual outcome.
In the same vein, NFTs are community-driven and going by the words of Elliot Ngai (via decrypto.com), co-founder of Doge Fight Club, “people are investing in the community very early just so they can get rewarded for it”.
Generally, most blockchain initiatives, are made up of communities that are driven, first by profit, before anything else. This gesture, however, is capable of limiting the true growth and viability of any enterprise.
A utility-oriented community, on the other hand, is more concerned with putting its idea or concept into implementation in the real world. With the preceding fact established, what does a utility-oriented community imply for the future of NFTs?
To begin, one of the most important ways to ensure scalability is to find a way to incorporate it into our daily lives.
According to several authors, the ultimate goal of any innovation should be far-reaching; specifically, it should be instrumental towards creating a smart future in which people can enjoy the best quality of life. To put it another way, true innovation must fit into people’s lives and lifestyles.
That said, if NFTs are to thrive beyond the current hype, they must nurture a community of users who are more concerned with how the innovation could offer real value to humanity and how it can be deployed in a manner that enhances people’s lifestyles.
For instance, Tyler Phillips, a Florida entrepreneur, recently discovered a way to leverage NFTs as a way of promoting a product that doesn’t yet exist.
Unlike the majority who are continuously looking for ways to profit from the emerging industry, Tyler, on the other hand, who aims to produce a chickpea-based muffin snack called Hummii, used NFTs as a promotional tool.
In conclusion, what NFTs need to scale now are people like Tyler who can see past the profitable aspect alone and not those who see the initiative as a quick money-making scheme.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.