![]() ![]() CEO and founder Jeremy Born believes NTTs are important and can have many uses. Los Angeles-based NFT platform NFT Genius was one of the first to issue non-transferrable tokens (NTTs), a more straightforward moniker for Buterin’s SBTs. Students are tied to these tokens and can share their degrees and accreditations instantly and anywhere in the world with verifiers (for example, employers), saving time and money for parties involved the innovation is that the academic credentials are unique to the student and instantly authenticated. Veng’s start-up Certi.nft builds on this idea by enabling educational institutions to issue relevant degrees or accreditations as NFTs directly to students’ digital wallets. SBTs are a non-transferrable NFTs that retain the proof of ownership element inherent in the tokens. ![]() But to achieve these economic efficiencies, it is key to have, as Buterin highlighted, “non-transferable SBTs” in place. “In fact, NFTs have great characteristics, and can transform how the various processes in our society operate and the economic efficiencies that can be achieved,” she says. earning money) is not the main purpose of NFTs, adds Veng. Perhaps the NFT market crash is, as some argue, a reminder that the by-product (i.e. The tokens found purpose in the art industry to begin with, by allowing artists to put a digital stamp on their work, and though the increased popularity and hype of avatar or jpeg NFTs led to many believe creating NFTs were a way of making easy money, that wasn’t the original intention, says Veng. The original intention of NFTs was proof of provenance of a unique digital asset to denote ownership. The SBT encodes social relationships of trust, and utility is most often “built on persistent, non-transferable relationships” which NFTs fail to capture, according to the white paper. This is the utility and innovation that both McMahon and Malik refer to. This is an idea co-authored by the creator of cryptocurrency Ethereum, Vitalik Buterin, who argues in his May 2022 white paper that Web3’s current focus around expressing transferable, financialised assets, rather than encoding social relationships of trust, means that today’s decentralised finance ecosystem is unable to support activities ubiquitous in the real economy, such as undercollateralised lending or simple contracts, such as an apartment lease. What if the NFT becomes less of a financialised asset and more of a Web3 tool with utility? One such innovation, according to Irene Veng, founder and CEO of Oxford based Certi.NFT, is the soul bound token (SBT). Non-transferrable NFTs could be the innovation needed to save the market “It started with art but NFTs are moving beyond just art and now I am seeing a big shift towards NFTs in the real estate sector as well as in ESG, healthcare, food and entertainment,” he says. Malik predicts innovation in the NFT market and has high hopes for digital real estate as well as many other sectors. "And like real estate or stocks, people say buy the dip. “Everyone has been waiting for this time to buy," he says. And, like McMahon, he can see the positive in current market conditions. In Malik’s experience, everything that goes up must go down. Anjum Malik, co-founder of New York-based private crypto hedge fund Manhattan Crypto Capital, views what is happening in the NFT market as “just a cycle, just like in real estate”. Others liken the NFT crash to any other economic cycle. "These use cases have not yet had their day," he adds. Shifting focus away from crypto assets such as avatar images will lead to truly innovative NFT use cases like gaming, royalties and ownership of real-life assets, says McMahon. ![]() "People won’t return to them for a long time.”īut others, such as McMahon, believe that, though the NFT market may look dead based on July 2022 data, the current crash is simply a much-needed shake-up which will move the market away from NFTs without additional utility. “NFTs were such an obvious bubble," he says. Viewed from the perspective of a market in extreme decline, some, such as GlobalData analyst George Monaghan believe that the NFT market is dead, at least for a while. “I think as the broader crypto market matures and the NFT world matures, we may see a detangling of this,” he adds. So, will NFTs always be vulnerable to the volatility of the cryptocurrency market? McMahon says that as the crypto art sector matures it may mirror the physical art market, which is not necessarily tied to the fluctuations of the underlying currency it trades in. But the symbiotic relationship between NFTs and the cryptocurrency market is undeniable. ![]()
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