Non-fungible tokens (NFTs) have revolutionised the digital art scene. Yet in spite of the initial hype, many questions remained unanswered: What is the situation with the value of NFTs? And what role will they play in the future of the art world?
What are NFTs?
Non-fungible tokens, better known as NFTs, are digital assets that are stored on a blockchain – the same technology used by cryptocurrencies like Bitcoin and Ethereum. Each NFT is unique and cannot be subdivided. This uniqueness is what gives NFTs their specific value. They effectively work as digital certificates of authenticity that make digital works of art into non-copyable originals.
Role in digital art
It is particularly exciting to consider NFTs within the context of digital art. Connecting a digital artwork with an NFT gives the artwork the status of a non-copyable original, which thereby gains added value. This is an entirely new phenomenon for artists, as they now have a way to protect their work, which wasn’t previously possible in the digital sphere.
But how is all this relevant to you? NFTs could revolutionise the way we handle digital goods. They could transform the way we perceive art, music and even property.
Has the NFT hype already blown over?
Has the NFT fad already passed? The figures speak for themselves: according to an analysis carried out in late 2023, around 95 per cent of all NFTs are worthless. A prime example of these are the Bored Ape NFTs. These cartoon ape images were swept up in a massive hype in early 2022 and traded for up to $430,000. Now the value of these NFTs is around $40,000. For example, popstar Justin Bieber had to concede that the Bored Ape NFT that he acquired for $1.3 million was now estimated to be worth $60,000.
Why have the prices dropped? Reasons for this include changes to interest rates and the bursting of the crypto bubble in 2023. Cryptoassets became less attractive and therefore less valuable. NFTs, which are ultimately cryptocurrencies with an accompanying image, were particularly affected by this upheaval. But the COVID-19 pandemic, when many people stayed at home and sought new ways of making money, also had an impact. During this time, NFTs were a welcome speculative asset.
A glimpse of the future
NFT art might still make a comeback if NFTs can become more than mere speculative assets. By providing practical value, such as access to exclusive content, they could recover. There is therefore a distinct possibility that NFTs could still play a role in the future of the art world, although it might be under another name.