Once known as Non-Fungible Tokens, NFTs go around by the name of Not-Fashionable Technology. As far as we remember, NFTs used to be a cool thing. Also, the pandemic played a vital role in establishing NFTs as the town’s talk.
However, it doesn’t attract a lot of people now, and its appeal has diminished over time. A question arises,
Why did something so magnificent fail so miserably?
This article is about finding out what on earth hit NFTs. We’ll explore some major reasons why NFTs flop after gaining a massive following. We’ll try to conduct a post-mortem to find the root cause of NFTs becoming a disappointment. So, let’s get started.
Contents
1. The NFT Bubble. 1
2. Co-Relation Between Crypto and NFTs. 1
3. Contributing Forces. 2
· Price Decline. 2
· No Long-Term Value. 2
· Media Coverage. 2
4. The Future. 2
Bottom Line. 2
- >The NFT Bubble:
At this point, NFTs were no exception. Any new technology experiences the same growth and development. The bubble mostly consists of speculations by the people and critics. Sometimes, they speculate so much that the tech doesn’t bear its burden.
A lot of people and critics were already heavily invested in crypto when NFTs boomed. For them, it was another genius trick to become a millionaire overnight. Such speculations can be good, but to a limit that the technology can deliver.
Unfortunately, the downtrodden NFTs couldn’t survive the speculation’s pressure. Eventually, NFTs succumbed to it and that’s when the downfall started.
The unsustainable growth led to more buyers and sellers racing towards the NFTs market. However, NFTs existed in 2011, but they couldn’t develop a dynamic market. As people realized that digital art doesn’t have many benefits, the NFTs market started drying up.
- Co-Relation Between Crypto and NFTs:
Both crypto tokens and NFTs fall under the umbrella of digital currency. So, you can see that there’s an evident relation between them. However, crypto tokens are much more influential on NFTs than NFTs are on crypto.
The 2022 NFTs crash is closely related to the crypto crash. For the background, let us take you some years back to the pandemic’s time. At that time, the welfare states around the world were assisting individuals monetarily.
Resultantly, the consumer’s buying power increased temporarily. Afterward, people turned to the digital currency because it seemed profitable. Once, the funds dried up, so did the market.
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- Contributing Forces:
NFTs were something that needed a single push to fall. For whatever time it surfaced on the global radar, it amassed a good following. However, some contributing factors equally wreaked havoc on NFTs’ popularity as the factors mentioned above. These were:
- Price Decline:
As soon as the speculations were over, the NFTs’ prices started to hit rock bottom. Why? Because people stopped taking an iota of interest in what NFTs were.
- No Long-Term Value:
For most people, NFTs stopped making sense. As soon as the bubble around the NFTs burst, people didn’t think it was feasible to buy digital art worth millions of dollars. Except in the metaverse, there isn’t any visible benefit of holding on to an NFT in the long run. Consequently, people were held back from getting involved in NFTs.
- Media Coverage:
To make anyone a hero or zero, media coverage is vital. The same thing happened to NFTs to some extent. A few years back, NFTs were the talk of the town simply because the media pumped up its popularity. Now, people are swaying from it because they don’t find it profitable, and that is all over the media now.
- The Future:
Despite all the fuss around NFTs, they can still exceed everyone's expectations. Few major developments have taken place in recent times that can solidify NFTs’ position again. One of these developments is in the gaming industry.
Now more than ever, games are produced on blockchain technology and they’re getting the required traction from the people. NFTs have the potential to become a common item if not luxurious art or digital music.
For example, with transforming technology, there’s a possibility that essentials like driver’s licenses, event tickets, or property deeds may be shifted to NFTs’ technology. The rationale behind the idea is to ensure authenticity as data on the blockchain cannot be copied and is extremely secure.
Bottom Line:
Once a booming market, NFTs aren’t attracting a lot of people now. But given the advanced technology, one cannot altogether rule out its possibility of making a comeback. Only time will tell if NFTs are worth anything or not. Till then, it’s better not to indulge in buying and selling NFTs.
