While public opinion is still split on the legitimacy of the concept of digital assets in the form of non-fungible-tokens, few would argue that, at this point, the cat is out of the virtual bag. Markets boom and bust, but they generally don’t disappear altogether (the Dutch tulip market is still thriving). That being said, demand is a fickle beast. It’s always possible that today’s digital collectible du jour will end up a cautionary tale – see the decline in the value of celebrity-backed NFT’s for a recent example in the making.
With a current market value of about $7 billion (about equal to the value of Bitcoin in April 2016), the NFT market is assuredly still in the early stages of maturation. Not surprisingly, the most prominent segment has been the one with the most direct conceptual link to the real world: digital art. A list of the top ten most expensive NFT’s sold to date is a showcase of straight-to-pixel creations dominated by Cryptopunk characters and the aforementioned Winklemann, a.k.a. Beeple.
It’s (relatively) easy to wrap one’s head around the idea that the digital space is simply another medium for artistic expression, although its coexistence with art in the physical world has led to some controversial actions. It’s a bit more difficult to conceptualize is the digitization of sports moments, or even music. That doesn’t mean that we won’t see a renaissance in lesser known NFT categories – it may just be further down the road and farther up the curve of our cultural evolution.
So, where does the forward-thinking collector go in search of new frontiers, or if they’ve simply been priced out of the ape market? We’ll examine the NFT trends that are already pushing the boundaries. And for good measure, we’ll end with a scenario that removes them altogether. After all, we’re still early enough in the NFT age that just about anything is possible.
You could say that we’re dreamers, but we’re not the only ones.
Clearly, gaming should probably be the obvious NFT category to watch in the very near future. As a group, gamers are probably as NFT-friendly as any you’ll find. It helps that the notion of collecting in-game NFT’s already has a baked-in framework in the form of in-game economies. When you consider that $1 billion of in-game revenue was generated from just one game, you can get a sense of the scale of the opportunity.
Axie is already blazing paths in this space with its universe built around digital creatures that can be collected as NFT’s. Once acquired, the creatures – grouped into categories such as Aquatic, Reptile, and Dusk – can be bred for battle, to complete quests, or simply as keepsakes of value, real or sentimental. In essence, it’s Pokemon Go meets the Bored Ape Yacht Club. The Axie universe already boasts over 2 million active users and has become a legitimate source of income. Axie #2655 sold for 369 ETH ($820,000) in July 2021 – still a bargain compared to the most valuable baseball cards.
There’s no shortage of opinions about the metaverse these days. If you’re betting on the metaverse to gain ground against reality, you’re either banking on the technology becoming transformative or the real world becoming less desirable. Either way, the fate of the metaverse will likely be tied heavily to that of NFT’s; Sandbox already has a NFT institute that users can visit, beckoning a vision of a future where art galleries are synonymous with NFT collections.
Speed of adoption is still a valid question to pose when it comes to the metaverse, and there plenty who would fall into the category of active resistance. Whether or not you’re of the belief that “if you build it, they will come”, it seems apparent that the first part of the adage is already a given. The NFT possibilities in a fully built-out metaverse are too numerous to cover here, but you can take what you will from the fact that it’s already possible to buy an NFT billboard to advertise within Decentraland.
Yes, it is now possible to acquire an NFT of an NFT. It feels premature to declare that we’ve reached the point where all that is left to tokenize is the blockchain itself, but here we are.
In all likelihood, we’re talking about something that is more of a novelty than a cultural trend. It’s hard to imagine blockchain NFT’s holding much appeal for the mass market, even if digital awareness grows dramatically from current levels. Books have been around for a long time, but there aren’t many clamoring for rare editions of ink and printing presses.
What’s more compelling than the actual is the underlying philosophical implication: if you can create an NFT of an NFT, why not an NFT of an NFT of an NFT, and so on, ad infinitum? Ultimately, the desire to do this kind of thing probably says something about us as a species. We just don’t know what that is.
The theory that all human behavior can fundamentally be perceived as acts of tokenization might be the most ambitious to come out of the NFT movement, if not the most mind-bending.
To go fully down the NFT rabbit hole is to explore the fundamental nature of perception. In a far future where tokenizing machines have consumed the whole of our physical world in what would be a more productive version of the gray goo scenario, would you be able to quantify every waking moment of existence down to individual sensations like biting into a piece of ripe fruit or watching a sunset?
About letting that cat out of the bag…