The NFT market is cooling off, but reports of a crash are overblown. This article looks at some of the current issues surrounding the NFT market. It discusses the benefits of NFTs, including their potential to support more sophisticated digital engagement between teams and fans. It also discusses how their prices can be volatile. The following examples show why NFTs may be an overrated concern. The artist Amy Castor poses with Tristan Fewings, who photographed the artist’s work.
NFTs are a bastion for creativity
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The artist who crafted this project asked that Fast Company not use his name, but we can guess that he is a fan of digital art. The artist, who goes by the moniker mynameistru3, sells NFTs for digital images on a blockchain known as Tezos. His work has sold well, with a 40% increase in sales forecast for the year 2021. There are 1,300 editions of his work, and some editions have sold for several thousand dollars.
Despite their flaws, NFTs are a hot topic in the world of online art and creativity. While they have been around for years, they only recently came to prominence. You can purchase them over various online exchanges and store them on a blockchain. However, there are some risks associated with this. NFTs have a low adoption rate and are highly speculative, and as such they are subject to washout.
They can support more sophisticated digital engagement between teams and fans
Sports clubs are pursuing more complex ways to engage with their fans through technology. The results of recent studies have shown that a more personalized and interactive experience for fans can increase their likelihood of coming back to a game. In fact, the Northwestern School of Professional Studies found that 45% of premium fans would be willing to pay extra to have a better in-stadium experience. This data can help clubs design their online and mobile experiences to maximize fan engagement.
Creating a platform for fan engagement requires a holistic approach. The team must plan ahead and guide fans toward the next big event. Often, these platforms require the use of push notifications to link fans with the team and help them stay up-to-date with what is happening. Participation from fans can take many forms, from physical presence to virtual participation. However, the most compelling and successful fan experiences are those that engage fans on a personal level.
They are subject to price volatility
Compared to other commodities, basic energy prices are more volatile. While a change in fuel price can lead to higher or lower heating costs, many consumers are limited by their inability to substitute a different fuel. For example, if the price of oil rises significantly, a residential customer may not be able to replace their heating system quickly or affordably. On the other hand, food products are readily substituted if their relative price falls.
They are dependent on crypto
A key component of NFTs is the tokenization of physical assets, which democratizes investing. For example, NFTs are much easier to share among several owners than physical real estate. The tokenization ethic can be extended to other assets, such as paintings, and enables multiple owners to boost the value of each piece. It is also possible to trace the provenance of individual pieces and share secondary royalties with artists.
As of mid-July 2020, Art and CryptoKitties collections accounted for over 71% of total NFT volume. By mid-July 2020, the market reached a peak of more than 60000 USD per day. This volume increased dramatically between July and March 2021, when the total daily value of CryptoKitties reached 10 million USD. The booming market is dependent on crypto. To date, NFTs have a market value of over a billion dollars.
In general, NFTs are limited in number, despite being a decentralized asset. However, NFTs can be poofy if the company goes out of business, or the URL scheme changes. Another solution to this problem is to use the InterPlanetary File System, which uses torrent-like technology. While this method is not bulletproof, it is much better than using Google Photos for storage.
They require interoperability
Despite the growing popularity of NFTs, they still lack common rights standards. The sport industry is an interesting lens into the potential of NFTs. While the technological infrastructure is still evolving, sports teams, players, and venues have a number of concerns about IPR. Interoperability is a critical piece of this puzzle. Unless smart contracts are created and programmed to transfer rights, they will remain problematic until a more formal legal framework is developed.
They are volatile
The NFT market is extremely volatile, and you need to be ready for this fact before buying. As a cryptocurrency, it is subject to price fluctuations driven by both demand and supply, and it moves along with the value of cryptocurrencies. There are also scam artists who pretend to be buyers and sellers of NFTs, and steal money from crypto wallets. In fact, Chainalysis estimates that US$14 billion could be lost in NFT scams by the end of 2021.
One of the biggest problems facing the cryptocurrency industry is the lack of regulatory clarity. The government of India recently proposed crypto legislation that would result in non-bailable arrests and high fines. In addition, there are many problems with the cryptocurrency market, such as impersonators and scammers stealing artwork. This was one of the original goals of NFTs – to resolve this issue. It did succeed, however, and the fraudster’s account was removed from the marketplace.