Fact or Cap: NFTs are the Future

Over the past 8 months, I have delved into the realm of Non-Fungible Tokens, spent thousands on gas fees, and sifted through tens, if not hundreds of Discord servers to better understand the significance of the NFT movement. As an investor and entrepreneur, myself, the Web3 narrative has become almost suffocating. No corner of my social feed or email inbox has remained untouched by crypto mania. However, having lived and invested through two, now nearly three crypto cycles, this one feels different. Why? The NFT. 

During the first cycle, circa 2013, the leading narratives for cryptocurrency were decentralization and anonymity. With a tor browser and PGP key, any tech-savvy tinkerer with an internet connection could browse illicit marketplaces to their heart’s content. And I did. The concept was fascinating, as was the technology. Perhaps if I had a bit more foresight,
I would have saved my first Bitcoin instead of spending today’s equivalent of
about $35,000 on a single silk road purchase (for educational purposes only).

Fast-forward to 2017. Crypto mania is back in full effect. The rhetoric this time around? Utility. Investors are flocking to projects like Ethereum, Cardano, and Chainlink. Every week a new project launches that promise faster processing, more security, and above all else, utility. Currency transfers, stores of value, and the ability to anonymously operate a crime syndicate are no longer enough to satiate investors and enthusiasts. These projects took full advantage of the mania and liquidated swaths of their ICO war chests to fund research and development. By the end of 2019 the hype had evaporated from the mainstream media, but developers had
secured the necessary resources to build upon their early promises.

Here we are again in 2022. Global cryptocurrency adoption has skyrocketed since the end of the last cycle, increasing by over 2300% according to Chainalysis. Twitter magnates, celebrities, podcasters, and TikTokers have lunged headfirst onto the crypto bandwagon in search of views, likes, and those sweet, sweet tendies. Thankfully, this time around it’s not all hype. 

More than two years after the last bull run and many projects are thriving. The research and the development fueled by the last cycle are beginning to pay off. Utility for tokens is finally here. Thousands of ICOs, IDOs, SEEDs and SHOs took place over the last 16 months, which will surely fund the next wave of innovators, engineers, and dApps. Retail and institutional investors continue to pile in every day. Engineers at top companies like Google, Meta, and Microsoft are fleeing to greener pastures in the form of new and exciting blockchain projects. The hot topic of this cycle? Web3. 

Much like VR, AR, and AI, Web3 entered the ranks of “Tech Buzzword of the Year” in 2021. The perfect catchy catch-all term for all things crypto. But what exactly is Web3? To put it simply, Web3 is just Web2, but decentralized. An internet where the users own their data, their assets, and their identity. The decentralized ambition of the O.G. distributed ledgers married with the utility of current day blockchain applications. A worldwide web without big brothers like Google, Meta, and Microsoft. In theory, it sounds pretty idyllic. In practice, it still has a ways to go. The technology itself is strong, but in a blue ocean, it can take time to find solid ground. 

Enter Non-Fungible Tokens. An army of Apes, Punks, and Doodles have arrived to usher forth a Web3 revolution! For the small price of $250,000 you, too, can join the ranks of the NFT army and… upload a verified jpeg as your Twitter profile picture? Flex at Art Basel? Dodge capital gains taxes? So far the only thing that seems obvious at this point is that the function of an NFT is somewhat irrelevant. In fact, the correlation between an NFT project’s floor price and the number of members in the project’s Discord
channel is far more significant than any other metric available. A master class in the Law of Supply and Demand unfolding in real-time, across thousands of chatrooms, tweets, and TikToks, every single day. 

But the bears are coming. A correction is looming and has already begun to take shape. The wheat will begin to separate from the chaff, and the HODLers will be tested. Portfolios will begin to rebalance into blue-chip projects looking for what they have always looked for: utility. So, what does this mean for NFTs? Will Twitter PFPs and Metaverse estates be enough to prop up the market? Probably not. Sure, some mainstream projects will survive, perhaps even thrive, but many more will scramble to justify their existence. 

This is the reality that has weighed on me heaviest during my research. Any member of the NFT cult is steadfast in their belief that NFTs deserve a meaningful place in our society. “Use cases are endless!” they’ll say. And I agree. NFTs have the potential to represent so much more than the pixels on our screen. An NFT could be a passport, a deed to your home, a car title, a patent, a diploma, a concert ticket, and so much more. Unfortunately, we need more infrastructure. We need a bridge between Web3 NFTs and the real or digital assets that carry true value and utility in our day-to-day lives. Until this bridge is built, NFTs may not be able to cross the chasm. 

Disclaimer: this is the part where I shamelessly promote a potential solution of my own creation for personal gain. 

Yes, I decided to take it upon myself to try and build something that could bridge the great divide between Web3, Web2, and the IRL. It’s called NFT Link (creative name, I know), and it is one teeny-tiny step towards getting the NFT creators, blockchain developers, and collectors the tools they need to establish real utility. NFT Link pairs an NFT ownership verification system with user-defined access to real and digital goods. You know, the shit we actually need and want. The assets beyond the jpegs.