Non-fungible tokens (NFTs), alongside cryptocurrency, are one of the most culturally divisive phenomena of the century.
Their nebulous nature and adamant fanbase have sparked peer pressure from laypeople, vitriol from finance experts, and concerns from cybersecurity analysts.
The skepticism on the value of NFTs is rampant and confusing, so how can the community rebrand for a more promising future of digital currency and blockchain adoption?
Why Are We Skeptical of NFTs?
Fixing the NFT image problem requires an analysis of why it’s damaged in the first place.
The culturally elitist NFT trading scene has no shortage of contention, which is also potentially damaging the value of blockchain technology:
- People steal artists’ works, remint and resell them as NFTs without permission.
- Electricity taxes and gas fees make profits for artists minimal because they have to pay for the energy for the blockchain to verify the transaction.
- NFTs and cryptocurrency have scarce or no government regulation or oversight.
- Hackers can steal traders’ collections and resell them.
- Intense energy expenditure to buy and sell NFTs harms the environment.
- NFTs trading doesn’t have certain longevity as a viable market.
- The scene perpetuates classicism and inequality with sky-high, inaccessible prices.
Skepticism continues when outsiders question why people place hundreds of thousands of dollars of value on a digital asset that seemingly has none.
The NFT community started on the wrong foot, but humans set a surprising precedent for NFTs — fungible currencies and fine art.
Art collectors are willing to pay exorbitant prices for bananas stuck to the wall with duct tape because they declared a value onto it, and the same goes for NFTs.
However, buyers aren’t paying for the banana and the tape — they’re paying for a certificate of authenticity (COAs).
In blockchain terms, these distinct digital fingerprints, called hashes, prove someone owns it in some capacity. These COAs hold the value, not the NFTs in question.
In short, skeptics of NFTs don’t often see the parallels between the tangible and digital worlds. That’s why simplifying education is the most significant glow-up to NFTs’ reputation.
How Do We Fix the Reputation of NFTs?
NFTs can increase their reputation and value amid cultural skepticism with transparency. To start, people in the NFT community have to change their tone.
The cultural assumption is that it’s a get-rich-quick pyramid scheme for petty artists and video game enthusiasts.
However, there are tangible, powerful ways to leverage blockchain’s capabilities with NFTs to make them the assets of the future.
Explaining the technology without jargon could help laypeople have a breakthrough revelation.
Some people have had a necessary mindset shift, and others haven’t, especially as humanity moves to an increasingly more digital world — that digital assets will be just as valuable, if not more, than tangible assets.
People will reevaluate the value of NFTs after the community stops gatekeeping the reality behind high dollar values and confusing technical language.
In fact, blockchain is just a digital notary, and the faster this explanation spreads, the faster the rest of the image-fixing can occur.
Everything is trying to get digitized, from property to CDs. Blockchain technology with NFTs is the first time in history that people can prove they own these digital assets.
Before, purchasing an album through Apple Music didn’t prove ownership — it was just a list of MP3 files with no COA.
It’s also the first practical application of cryptocurrency, where people trade money for art — but it’s just over the internet instead of in galleries.
Humanity has to have a worldwide mental adjustment to see digital and tangible assets as equal. Otherwise, populations won’t be able to adapt to an ever-changing technological landscape.
Explaining blockchain and NFTs in this way will help people understand the inherent value of these assets. However, the next step in legitimizing the system is regulation.
Blockchains can verify hashes to notify NFT owners of fraud and ownership.
However, that means nothing unless governments recognize the community with oversight and legal repercussions for suspicious or illegal activity.
What’s the Potential for Blockchain?
NFTs rely on nostalgia and community. The NBA wouldn’t be selling Michael Jordan’s dunking highlights if fans didn’t want to participate in collecting them like how baseball fans collected cards.
These communities are the lifeblood of NFTs and will solidify the future of how blockchain gets used and how art holds long-term value.
The potential lies within several opportunities, a few being smart contracts and direct-to-fan relationships.
It also relies on the NFT community accentuating how NFTs are helpful outside of art, applicable to supply chains, the food industry, more to optimize business efficiency, tracking, and reduce waste.
The band Kings of Leon was the first to release a new album as an NFT with special surprises inside for owners, including exclusive multimedia files and front-row tickets to shows.
Eventually, artists could use NFTs to deliver more valuable experiences and connect with fans than they’ve been able to in history. It also allows them to cut out the middleman.
No need for publishers or record labels anymore — artists can get their funds directly, especially with the advent of streaming services, causing artists to struggle. Artists can get their autonomy back.
Publicizing the value of smart contracts is another powerful way to raise the philosophical and monetary value of NFTs.
Fine art has a high resale market, in which the original artist doesn’t receive payment for those additional sales.
Anchoring smart contracts in the blockchain could automatically pay the artist and charitable organizations percentages.
These have immense potential to prevent scalpers and keep art in the hands of fans — while doing some social good.
Redesigning NFT’s Controversial Beginnings
Rebranding NFTs means a community cleanup and reality check.
The fandom culture of NFTs didn’t make its origin story approachable for most people, especially when skeptics already questioned cryptocurrency and blockchain sounded like a term exclusive to computer scientists.
However, real, beneficial applications could raise the value of NFTs, not just monetarily, but socially, culturally, and technologically.
With governmental oversight and education, NFTs could become as mundane as buying art prints from Target.