The State of NFTs in 2024

Evgeniy Babitsyn, CMO of Bets.io

In the age of blockchain, we have seen a lot of different ways for the technology to be utilised. From digital currency to smart contracts and more, we have observed as the industry has grown to levels unimaginable just 15 years ago. One key aspect of the technology created during the height of crypto and blockchain was Non-Fungible Tokens (NFTs). Celebrities, influencers, brands and businesses alike were diving deep into the world of NFTS, bringing about their own projects, minting art on the blockchain and bringing NFTs to the mainstream. Wherever blockchain was mentioned, NFTs would be too.

However, in recent years, the hype appears to have died down, but this doesn’t mean NFTs are gone. NFT projects that were short-term get-rich-quick schemes providing little value have gone, but what has remained are tangible projects that have stood the test of time and provide real value to consumers.

The 2021 NFT mania and subsequent fall

When NFTs first emerged in the mainstream around 2021, they generated a tremendous amount of excitement and speculation through various means.

Firstly, NFTs offered a groundbreaking way to establish ownership of digital assets. For the first time, digital art, music and even virtual real estate could be owned and traded with the same confidence as physical assets. With everything being tied to the blockchain to prove ownership, the increased interest in digital ownership experienced during this time boosted NFTs to the forefront. High-profile endorsements and participation from celebrities, artists, athletes also brought widespread attention to NFTs. For example, the sale of Beeple’s digital artwork for $69 million exemplified the heights of NFT mania. Additionally, there was an increasing interest in decentralised finance (DeFi), which provided a fertile ground for NFTs, as blockchain technology and cryptocurrencies gained credibility and traction.

However, despite the initial hype, the mainstream buzz has now significantly waned. The NFT market became oversaturated with low-quality projects and speculative investments, leading to a loss of trust among investors and enthusiasts. What’s more, increasing regulatory scrutiny and lack of clear guidelines around digital assets created an atmosphere of uncertainty, deterring new investors and projects. Add to that growing environmental concerns due to the perceived high energy consumption of blockchain networks, and it’s no wonder NFTs are no longer talked about in the same way they were a few years back.

Current NFT uses

Though the loss of interest usually means the end for tech projects, this isn’t the case for NFTs. With the hype reducing, there are now less and less low-quality NFT projects. Projects are being designed with a tangible goal in mind which isn’t just about making a quick dollar. Instead, NFTs have found enduring and practical applications across various industries, proving their value beyond speculative interests.

The sports and entertainment industry is a great example of industries embracing NFTs for fan engagement and memorabilia, deriving tangible use for the technology. Platforms like NBA Top Shot allow fans to buy, sell and trade officially licensed NBA collective highlights, adding to the experience for supporters and fanatics. Similarly, musicians and artists have been using NFTs to monetise their work directly, offering exclusive content and experiences for their fans.

Outside of consumer entertainment, we are seeing impactful projects in regions like the Middle East, where NFTs are being explored in innovative ways within the renewable energy sector. Industry players like SunMoney Solar Group are issuing asset-backed NFTs, tradable as stocks or digital currencies to raise funding for their sustainability projects. These kinds of projects enhance transparency and traceability in the energy sector.

NFTs also continue to serve as reliable proof of ownership for both real and digital assets. Within the real estate market, real estate tokens represent ownership or shares in property assets, allowing for fractional ownership and more accessible investment opportunities. This trend is particularly visible in markets like Dubai, where blockchain adoption is robust.

The future of NFTs

There are many ways for NFTs to still be utilised in this day and age, however, the future of NFTs hinges on wider cryptocurrency and blockchain acceptance. As companies within this industry gain broader acceptance and integration into traditional financial systems, NFTs are likely to benefit. Improved regulatory clarity and infrastructure developments, such as the improved sustainability aspect of blockchain systems, will also support this growth.

Separately, direct interest and investment from institutional players into NFTs will provide further credibility and stability to the technology. Financial institutions, tech giants and even governments exploring NFTs for various applications can drive significant adoption.

In addition, innovations in blockchain technology, such as cross-chain interoperability, will address many of the current limitations of NFTs. These advancements will make NFTs more scalable and user-friendly.

There is potential for a resurgence in NFT projects. As the market matures, more sophisticated and utility-driven NFT applications will emerge. Sectors like gaming, virtual reality, and digital identity verification are ripe for NFT integration, offering practical and engaging use cases. Therefore, though the hype is gone, what remains are the impactful and useful NFT projects paving the way for even better, and more impactful, uses of the technology.

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