NFTs
NFTs Almost Completely Useless, Crypto Researchers Find
A team of researchers crunched the numbers to explain why you don’t see people selling ugly cartoon monkeys on the Internet anymore: NFTsor non-fungible tokens, once touted as a revolution in cryptography and digital artare largely useless.
“Dead NFTs: The Evolving Landscape of the NFT Market” is a new report from dappGambl, a community of experts in finance and blockchain technology. After analyzing 73,257 NFT collections, the authors found that 69,795 have zero market value Ether (ETH), the second most popular cryptocurrency behind Bitcoin. In practical terms, this means that 95% of NFTs would not yield a cent today – a spectacular drop for assets that have reached a trading volume of US$17 billion amid a frenzied bull market in 2021. The study estimates that around 23 million investors hold these tokens with no practical use or value.
What’s more, supply has vastly exceeded demand for NFTs. Only 21% of the collections included in the study can claim full ownership, meaning that around four in five collections remain unsold. As buyers become more demanding, the report notes, “projects that lack clear use cases, compelling narratives, or genuine artistic value are finding it increasingly difficult to attract attention and sales.”
And while headlines during the heyday of NFT speculation focused on individual pieces selling for the equivalent of million dollars in cryptography, almost none have such exorbitant prices today. Less than 1% are priced at more than US$6,000, and most of the most expensive collections cost between US$5 and US$100. Almost a fifth of the “top” collections have a zero minimum price. Even among the most expensive NFTs, the report notes, these prices can be set “without any influence on real, tangible demand,” reflecting the desire of sellers and potentially distorting investors’ views of an NFT’s inherent scarce value.
dappGambl researchers conclude that while we may never see an NFT boom like the one in 2021-2022, the assets can evolve in ways that survive the destruction. For example, they could have a specific function, becoming a pass to access special events or a virtual item to be purchased and traded in video games.
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This, however, would not solve perhaps the biggest disadvantage of NFTs, which has become a big controversy as they reached the peak of popularity: their environmental impact. Non-fungible tokens are minted on the blockchain, a process that requires energy, and bought and sold on markets that work with cryptocurrencies “mined” with computer platforms that hold significant value. carbon footprint. But minting tokens itself comes at a cost. The “Dead NFTs” report notes that the nearly 200,000 NFT collections “with no apparent owners or market share” identified by the study caused carbon emissions equivalent to the annual production of 2,048 homes, or 3,531 cars.
Of course, enthusiasts didn’t worry much about this when NFTs were a hot commodity. And if they ever achieve a modest comeback, climate concerns will likely be put to rest again. I can’t let something like this get in the way of the next hype cycle.
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