The Sky isn't falling on NFTs
Well maybe some of them
Are you watching crypto and NFTs and feeling like the sky is falling? Are you seeing media saying it is all over and a waste of time? Maybe a Ponzi scheme? I'm here to tell you it isn't. I've got Gartner on my side.
It's understandable when you look at the drop in value of cryptocurrency in recent weeks, but then perhaps it's time to think about the natural cycle of new technologies, an uncomfortable fence that I have sat on many times during my career to date.
Following social media hype, NFTs were bought by people expecting to get rich quick by creating and selling pixelated images of bored monkies. A few did, and many people won and lost a lot of paper money.
Of course, we live in a volatile world today. Crypto isn’t much different from other investments, except that other investments have something more tangible that you can see. Look at what my Netflix shares have done in the last year. Do you think they are going to cease to exist?
My United Airlines shares have dropped almost 25%. Do you think I should be selling them? I don’t. I just think I’m getting them at a good price. Disney Shares dropped over 40% in the last year. Is Disney down the tubes?
Did you know that Walt Disney was rejected 300 times when he was looking for money to create Mickey Mouse and theme parks?
But there are so many new things happening, made possible through the concept of Smart Contracts in NFTs. People are adding equity of art, music, and tickets to shows. It's called Utility. When a value is added, it is no longer about the rise and fall of crypto. It's happening in art, music, entertainment, communities, museums and even contributing to fundraising for food and other supplies for the people of Ukraine.
A few weeks ago I bought a limited edition NFT from Julian Lennon, singing '“Imagine”, a song he swore he would “never sing again until the world was ending or near to it”. With the war in Ukraine, he feels that we are at a higher risk than perhaps ever before in his life. The NFT includes a sketch of Lennon, which is completed while he is singing the song and narrating his feelings about supporting the people of Ukraine, who were the beneficiaries of the crypto used in purchasing it.
This is what we call utility in the world of Crypto, where a Smart Contract adds value. When I bought this NFT, back in April, I was happy with the amount that I paid for it. I wasn’t buying it to get rich, but this was a one-off musical collector’s item sale and if you are into collecting Beatles or similar articles, it’s a bit like buying a collector’s game card. Only a certain number were ever created, and it won’t be repeated, so the only way to get one of these now, is to buy it from someone like me. Sorry, not for sale :)
Take a look at where Gartner showed NFTs to be in this chart from 2021. We have moved from the Innovation Trigger Phase, through the Peak of Inflated Expectations, and are now heading into the Trough of Disillusionment. But look what comes after that. The curve goes up again into the Slope of Enlightenment. That’s when the concept hits maturity, the NFTs have inherent value and utility and people wonder what the fuss had been about.
I hope the world isn’t ending. I kind of like it here. I also love new technology. I think this one is here to stay and going to be a real boon for artists and musicians, seeking new ways to make a living.