current pitfalls and challenges can lead to its democratization

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process. Opinions expressed by Entrepreneur the contributors are theirs.

By this point you will surely have at least heard the term NFT , but before analyzing what happened and the future that this industry could have, it is worth reviewing what it is about as an introduction for those who for the first time. they report it.

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NFT (non-fungible tokens in Spanish) are essentially a digital asset that guarantees authenticity and ownership to its original owner through blockchain technology and smart contracts. Although these are potentially copyable digital pieces – images, GIFs, videos, digital arts, virtual homes, among many other traded digital assets – it is important to note that each NFT is a unique and irreplaceable object. , so that each coin has only one certified original owner (this owner can be an individual, a consortium or an investment group).

High prices have limited interest from a wider audience and attracted the attention of pirates

Commonly traded through the Ethereum cryptocurrency, $40.9 billion worth of NTF was invested by investors and digital art fans in 2021. Artists, celebrities, European major league footballers and anonymous millionaires have made many transactions for this type of coin. , triggering the alarm of the most skeptical because of the high prices that were paid for this type of piece.

With records of up to US$69.3 million for an NFT, alarm bells have started to ring. Critics have started to speculate that a dangerous industry could crash at any moment and, while that hasn’t happened, the downturn has started to play out in the market, as mainstream interest begins to be drastically reduced due to the high cost of NFTs, which has resulted in the industry being seen as a sector that only wealthy individuals can enter.

Many have argued that it doesn’t make sense to pay a lot of money for a JPEG with metadata that looks like any other image you can find on the web, which has been heavily debated due to the value that collectors and enthusiasts place on these coins. which combine the best of art with modern technology. The truth is that the high cost of these coins has also attracted the attention of hackers, who have tried in various ways to breach the security of NFTs and steal works from their original owners, resulting in losses. millionaires. OpenSea, a leading platform for buying and selling NFTs, recently suffered a phishing attack that resulted in hundreds of stolen coins worth $1.7 million, while Axie Infinity, a game that involves NFTs and is very popular in Latin America, $625 million was stolen by hackers who took advantage of a security breach.

The fall in prices

Were the NFT skeptics right? At the moment, we can assure you that this industry has not suffered a dramatic collapse, however, little by little, the number of transactions and the value of the works have started to decrease.

While in January the average selling price of an NFT was above $6,800, by the end of the first quarter the figure was below $2,000, according to market tracker NonFungible. In the first few months of the year, cumulative daily sales also fell from $160 million to $26 million, entering a volatility that certainly doesn’t bode well for investors.

Additionally, a recent report indicates that only 1% of NFTs were traded for more than $1,500, while 75% were sold for less than $15.

For many the situation is concerning, especially for those who have invested large sums of money in NFTs, but in my opinion the industry has started to move towards the equilibrium point that it must reach before to become a new global market, affordable and present in virtually any Internet application or platform.

NFT continues to be a fundamental part of the future of the web

the democratization of NFTs is just around the corner. With the arrival of Web3 and the constant efforts of giants like Meta, which announced plans for creators to be able to market NFT objects on their various platforms, in a few years we could be talking about this type of coins in our daily life, opening has given way to a marketplace of millions of users willing to pay reasonable prices for things like clothing for their avatars, virtual items, in-game accessories, and anything else you can imagine.

So what some see as the potential collapse of the industry may actually lead to the democratization of a potential market, although current blockchain and cryptocurrency-based methods may be moving in that direction. .

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