Kings of Leon, a popular rock band, released a limited edition of the latest album as an NFT in March 2021. Also in march, Twitter CEO Jack Dorsey successfully sold the NFT of his first tweet for 2.9 million dollars. And the list goes on. Nearly 2 billion dollars has been invested in NFT projects in the past few months itself. Dozens of big brands and celebrities have stepped into the space to extract the new found value in the tokenverse, if there is a word like that.

What does the future hold? Will the real world objects be worth less in the future than their digital counterparts? Maybe. Maybe not.

Non fungible tokens are unique digital assets built on smart contract crypto blockchains such as Ethereum, Polkadot, Solana and the likes. Its not fungible. Meaning, 1 dollar bill is the same as any other 1 dollar bill. Not so with NFTs. These are unique and can't be interchanged for one another. These can't be duplicated just as you can't have a copy of the Mona Lisa and call it the Mona Lisa. 

Most NFTs exist on ethereum and they can represent digital art, digital land and real world land. They are easy to make and can be programmed to change ownership and its properties via smart contracts. They can say, change their colour depending on the time of the day. Their ownership is provable on a blockchain. But these reasons may not be enough to justify the demand seen in the past few months. 

Some NFTs have utility value, most don't. For reasons unknown, humans like to collect things which are scarce. This may jack up the price of a token even with little or no real world utility. 

Speaking of scarcity, lets say you are an NBA fan. You would be interested in owning a part of the NBA memorabilia. This is what NBA topshot enables. Its a partnership between NBA and Dapper labs which issue digital sportscards and videoclips as NFTs. Obviously these will not have real world utility.

However, some NFTs do have utility, for instance, domain names. The name travel.crypto could be of immense value to a travel blogger since he/she needs to pay for the domain only once in his life. More importantly, the blogger will be able to receive crypto without using the complicated wallet address. More importantly, these domain names are not stored on a centralised server, hence cannot be taken down.

Who doesn't like music? Audius is a decentralised music streaming platform which can give their centralised counterparts a run for their money. The artists will get their due and the consumer might just get their money's worth. 

Chiliz is a digital crypto for the sports and entertainment platforms. It enables fans to have direct involvement via voting power in their favourite club. Socios.com is a fan engagement platform which allows fans to purchase merchandise of their club and uses the chiliz token.

Theta is a decentralised video streaming platform which already has partnerships with the likes of Samsung and Google. Decentraland, ETNA network and more are just a few of the projects which could enable a shift in the demand of the traditional system to the digital one. 

There could be an entire army of traders who might move to NFTs since the money to be made in this space maybe on par or more with what they are making in the stock market.

These projects are just a few of the value propositions enabled by the NFT universe. NFTs could be used in much more impactful ways which are only being thought of now. 

I personally feel that the NFT bubble, if I may say so, of the year so far could burst sooner than we think. Maybe 90% of the NFTs will fail. Maybe there is an oversupply of NFTs in the future. This will ensure that the valuable ones survive and the imposters are out. Some NFT art will survive the burst and will possibly be displayed in the virtual galleries. As will blockchain domains. The education level of the participants could be an issue too. One is that buyers often assume that they’re acquiring not just the token, but also ownership rights and copyright over the associated asset. The conditions of the NFT sale maybe unclear. The fractionalisation of NFTs could be subject to regulations. In short, most people today may not have an idea of what they are getting into.

If the NFTs metamorph into something desirable, just like say sports memorabilia, there should be a reasonable demand for the ones people want.