The Simple Reason NFTs Aren’t As Crazy As You Think

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OK. I understand.

NFTs are crazy. A deed that anyone can own and possess in every other way? Nuts. A technology to create an artificial digital scarcity when the information is meant to be free? Perverse. A mega-bubble with unprecedented prices for JPEGs and a massive crowd of get-rich-quick types with monkeys, yachts and zombies? Inappropriate.

Like I said, I understand. And I agree.

But there is a scenario where NFTs make perfect, logical, unassailable sense, and I spoke with the product manager of one of the biggest NFT marketplaces, Rarible, about exactly that on a recent episode. from Tech First Podcast.

Because the reality is that more and more reality is virtual. Or at least digital. We consume digital entertainment through Netflix, digital music through Spotify; we engage in digital battles on Fortnite; we win virtual wars on our smartphones; we meet others digitally via Zoom; we work digitally on laptops at home with Google Docs on virtual hard drives; we outsource our memories to search engines. Even as we work our bodies in the physical world of meat space, digital trainers urge us to let it go and give it 25, or push a little harder, or stretch a little more. In short, almost everything we do, we do digitally, or augmented by digital realities.

As this evolving metaverse grows around us and our reality becomes even more digital, there is a growing need to represent access rights, ownership rights, and usage rights. What can I use? What can I authorize others to use? What do I own? What do others have? Above all: how can I express all these things in a digital, programmatic and contractual way?

Well guess what we have for all that?

Winner Chicken Dinner: NFT.

“Someone said that [the] the digital signature is one of the greatest inventions of the 20th century,” said Alex Salnikov, Rarible Product Manager, told me recently. “And we actually see the consequences of that, because all the NFTs, everything that exists on the blockchain, is attached to your private key and your digital identity, just your digital signature that you created for yourself. . And it’s like you in the digital world. And before that, there was no “you” in the digital world. »

This is why the hope and dream expressed by Salnikov is that NFTs will come to represent all digital property rights on the Internet. And why he thinks it’s a very realistic dream.

In reality, we already live in the metaverse, Salnikov says, echoing The opinion of Avi Bar-Zeev, pioneer of augmented reality and virtual reality. It’s just the digital universe in which we exist every day that is rapidly replacing (arguably) or augmenting (also probably) the physical universe in which we breathe, eat and move.

“NFT and the whole blockchain revolution is about trying to rebuild that world, from the ground up, and create the level of ownership that’s detached from platforms – that you own your digital items directly on the blockchain, attached to your wallet,” says Salnikov. “This central concept of freedom over private property has never existed on the internet. And now we have private property that is free and open with NFTs, and can represent ownership of anything.

Of course, it started with JPEGs and GIFs (it’s hard G, by the way).

But it is extendable to tickets. Or houses in virtual environments. Or Gucci bags that exist simultaneously, like Legolas and other elves in Tolkien the Lord of the Ringsin the visible and invisible domains.

For Salnikov, private property is a “super central concept” of the physical economy, and bringing the same into the metaverse is a key step in the evolution of who we are, what we do, and what we do. how we act in digital spaces.

So even if the bubble has burst and NFT sales are down perhaps 50% from the dizzying, frothy highs of February 2022, and even if 80% of NFTs created on competitor Rarible OpenSea’s NFT marketplace were fake or fraudulent, and even if 10,000 peddlers came along and created a whole bunch of bored (insert animal here) or (insert adjective here) algorithmically invented zombies, it doesn’t matter.

It does not matter.

Because every revolution and every evolution has a cycle of hype and a boom phase and a trough of disillusionment, and NFTs are no different.

At least, if you buy this line.

“We are at the beginning of a Cambrian explosion of NFTs,” says Salnikov. “People are thinking. People create all kinds of NFTs – physical, digital, attached to this and this and that – and some of them will die, right? They won’t outdo the rest, and some of those ideas will live on.

And the result?

In 2020, the NFT market reached $100 million. In 2021, it exploded to $24 billion, Salnikov says. And we’ve seen growth since then…as well as some contraction.

But if NFTs truly become the decentralized foundation of ownership and access rights in the metaverse we’re hurtling towards, maybe the sky’s the limit.

“I think by 2030 we will reach a trillion-dollar market,” Salnikov says. “And they will represent all kinds of things…. half of e-commerce doesn’t make sense to be physical. I mean, when you buy a Star Wars Lego toy, you’re not buying it because it has physical features, like a knife in the kitchen, no, but because it’s a character, it’s cute , you like it, of this universe. It has almost no reason to be physical. You can have it in AR and it will still have the same utility.

“It will be transferred to the digital world, it will be based on NFTs. He will live purely in the digital world as we live in the digital world. And we’re about 0.1 steps away from that.

Brave new world?

May be.

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