The Rise Of Non Fungible Tokens

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I am fascinated by trends. How they slowly cook, under the radar, how they explode, and how they eventually fade away.

It’s like a huge, collective lens is pointing at some stuff, and that stuff is what we call mainstream, but then the lens is moving around, magnifying some other thing that was there all along, making it mainstream in turn.

For instance, Bitcoin. For the last 10 years, Bitcoin was hailed as the most important technological breakthrough of the decade. And yet, if you really look at the technology, it is not that revolutionary. I’m not saying this to upset some Bitcoin maximalists (mainly because they will get upset anyway, that seems to be their normal state). I’m saying it to point out that all – and I mean ALL – the components that are making Bitcoin, Bitcoin, were there all along. Peer to peer communication was around since 30 years ago. Cryptography even before that. Hashing algorithms were abundant before (and they are also abundant now, for what matters). The way Bitcoin mixed all these together created a unique product, that’s true, but not revolutionary. It didn’t invent anything new.

What made it important and mainstream was this collective lens pointed at it. All the components in it were small, but then the lens pointed at the mix and the final product became huge. Btw, even if you still think cryptocurrencies, and Bitcoin, are just scams, I want to remind you that BTC is now legal tender in a country. Legal tender. You can pay your debt in it. That state can pay its debt in it, if it so chooses.

Anyway, back to my point.

This collective lens that creates trends, that pulls small things out of anonymity and makes them trendy, moves with a variable speed. For Bitcoin, it took ten years and it looks like it will stay around for at least ten more.

For other things, it moves faster. Some trends are barely lasting a season, a year, maybe two.

And one of these things which are now enjoying the spotlight is NFT. It stands for Non Fungible Tokens and it has turned the world a little bit upside down.

Just like Bitcoin components, NFTs were around since the crypto appeared, but, for some reason, they didn’t pick up. An NFT is something that proves ownership. It can’t be exchanged for something similar – that’s what the “non fungible” part stays for. It is used mainly as a proof of owning digital art. Which is so baffling, since what you own is not the actual file, everybody can copy that JPEG, but you own a link to the original file. That’s all you own, a pointer.

For this generation, though, it seems this pointer is all that matters. JPEGs may be copied, but the pointer is there for ever. Or, for as long as the internet will last, which, for this generation, again, equates with for ever.

I have mixed feelings about this. I’ve seen the dot com bubble, and that one inflated really fast. Just as fast it hit the ground after a couple of years. This NFT craze (I don’t call it a bubble, just a craze) has all the ingredients for following the same scenario. Over inflated and easily replicable assets, over hyped, looks exactly like how websites were back at the end of the nineties.

I have no way to know if the huge trend lens will stay with NFT more than this season. It may hit the ground just like the ICO craze hit the ground in 2017.

Or it may last for at least a decade, like the main Bitcoin trend, completely transforming the way we think about property and ownership.

One thing is sure, the lens is focused on this and the focus is sharp these days.

Image by A M Hasan Nasim from Pixabay

Initially published on my blog.

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That was a very interesting read, and rather humorous between the lines as well! Keep up the good work, as usual! :)

The way Bitcoin mixed all these together created a unique product, that’s true, but not revolutionary. It didn’t invent anything new.

I would disagree. Bitcoin was revolutionary even if it didnt "invent anything new". The smartphone converged mobile, computing, and the internet, technologies that were around for decade. I doubt anyone would say that this was not a revolutionary change.

I have mixed feelings about this. I’ve seen the dot com bubble, and that one inflated really fast. Just as fast it hit the ground after a couple of years. This NFT craze (I don’t call it a bubble, just a craze) has all the ingredients for following the same scenario. Over inflated and easily replicable assets, over hyped, looks exactly like how websites were back at the end of the nineties.

Agreed. We are seeing the over exuberance that is typical with new innovations. The present NFT market doesnt make much sense to me and, I feel, will see many lose most of their money. That does not deter from the long term viable of NFTs. In time, it will be an enormous market with solid use cases throughout. We do not appear to be at that point yet.

NFTs will transform our entire ownership model.

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I would disagree. Bitcoin was revolutionary even if it didn't "invent anything new".

I remember about this web services called Webvan, or Fridge van. It was launched a couple of years before the dot com bubble. Those times were way before what we now call "Internet of things". But basically it was internet of things: you would put a sensor in your fridge, which would "read" what's in it, and then order autonomously what you consumed, without any input from you, automating your grocery shopping. It didn't take out. As a matter of fact, it crashed pretty bad during the dot com bubble and, even if other players tried to revive it under different names, it never really took off.

In a way, Webvan and Bitcoin are similar, because they both just combined already existing technologies. None of them invented something completely new, like, for instance, quantum computing. But, for some reason, Bitcoin took off, while automated grocery shopping didn't.

At least that's my point of view, and, as always, we can safely agree to disagree on this topic.

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When it comes to matters of the future I have started to lean towards intellectual optimism. I believe with every solution we create and its cons, we will find better ways of solving them creatively. I don't own any NFT (I gifted all my splinterlands cards) but I see this craze metamorphosing into something solid in the future, the use-case is there.

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I love the imagery. A lens that moves from topic to topic magnifying it for a time. It sums it up really well.

Really now a days its more and hot topics about NFT beside bitcoin, hopefully it will be a significant impact in new cryto era.