Are NFTs only the bridge to Web3?

What if NFTs aren’t the third version of the internet but the bridge that leads to it? A mix between web2 and web3?

besancia ·  · 06/04/22 ·  5 min

The euphoria that surrounded NFTs in 2021 has subsided, volumes are falling, speculators are less numerous. Maybe it’s time to ask questions about the core values surrounding NFTs.

2018: NFTs were born in a bear market

NFTs existed on Bitcoin long before the ERC-721 standard appeared. Yet, when NFTs are mentioned, it is in reference to those that are present on Ethereum. It was at the beginning of 2018 and we were there to follow the evolution of this nascent ecosystem.

This period corresponded to the entry of the crypto market into a bear market. Bitcoin had fallen from $20,000 to $4,000 in two months and it was going to last about two years. Needless to say, the mood was rather gloomy and anyone hearing about blockchain from near or far was particularly suspicious and mocking.

activité globale NFT 2018
NonFungible.com 2018 NFT report – Global NFT Market activity

We called 2018 the year #BUIDL. We were there to passionately build a new ecosystem. A new internet. NFTs opened up an infinite field of possibilities, it was necessary to build and experiment.

Ethical questions could wait a bit, the priority was to explore this new technology with incredible promises.

2019:  a NFT market in steady progression

smart contract NFT 2019
NonFungible.com 2019 NFT report – Active Smart Contracts over time

The number of smart contracts created during 2019 showed very encouraging signs. A stable progression with new NFT projects every month that were added to the previous ones.

Roadmaps were beginning to take shape with ambitious but realistic goals. Blockchain games announced a few years to develop a complete game. SuperRare, Makersplace and Known Origin welcomed new artists every day.

But one thing was missing: a space for discussion to speak about the values carried by this new digital world. Of course, there was the NFT.NYC. But the agenda was the discovery and presentation of the projects. Not an agenda to determine how the web of tomorrow should be built.

2020: Global Lockdowns and NFT newcomers

2020 key NFT event
NonFungible.com 2020 NFT report – Key events of the year

And then came 2020, the year of widespread lockdowns on the planet. As a result of the global activity of the world, the lockdowns have had positive and negative consequences on the NFT ecosystem.

The first to take a serious interest in NFTs were artists. First concerned by the lockdowns, how to continue to earn a living with the cancelled concerts and the impossibility of meeting?

In July 2020, José Delbo was one of the first international artists to create his own NFT. This was the first sign of a real adoption by an artist of the outside world of the crypto universe.

But at the same time, more and more international brands have begun to show a growing interest in NFTs. Breitling, Atari, Ubisoft, Zynga or Christie’s…

2020 global market activity
NonFungible.com 2020 NFT report – Global NFT market activity

This appetite for NFTs was just beginning. All the players in the ecosystem were convinced that NFTs were going to be the future of the internet. The excitement had spread to the entire community, delighted to welcome newcomers.

Here again, there has been no time to think collectively about the future of NFTs. We had anticipated that 2020 was only the beginning of this adoption, that 2021 was going to be a decisive year.

But… “Who can say what tomorrow will be made of?”. 

2021: NFT market growth explosion

2021 global market activity
NonFungible.com 2021 NFT report – Global NFT activity

2020 was just the premise of what was going to happen in 2021. No one could have expected such a sudden and massive arrival of new users. Of course, superstars, media and big brands have played a role in the publicity that NFTs have enjoyed. But what advertising exactly?

The profits generated by the Picture for Profile (PFP) have taken up all the space, to the detriment, for example, of the number of digital artists that the NFTs have greatly helped financially.

Having a capitalization that increases by 4,400% for such a young industry in one year is not very healthy. This heralded a correction to come. But it also meant something else: NFTs will be part of tomorrow’s digital world.

Only, during the year, the narrative around NFTs was led by the superstars rather than the actors present from the beginning. Because to take so many activities, it took time to recruit and train.

So much time that was not devoted to defining the values of “the NFT community”.

By the way, if you’re looking to explore the history of NFTs, we got you covered: a Short History of NFTs & the History of NFTs on Ethereum.

The need for digital scarcity

Today, on the internet, there is little way to make money from your creations. Influencers manage to “play their cards right” pull out of the game thanks to a resource that has a lot of value: authenticity. Unique content, which has its own signature and that no one else produces. 

But how to value authenticity in a universe where content is infinitely duplicable? Also, how to verify in a transparent and forgery-proof way the veracity of information online? “Blockchain fixes this”.

But here it is, NFTs are not 100% decentralized. As Gaspard Broustine de Ledger said in our interview, NFTs are a mix of web2 and web3. The metadata is mostly hosted on old technology while the token exists on the blockchain.

They can therefore meet an existing need but the industry is still too young to meet a massive use.

NFTs are a Web2 fix, not an upgrade

NFTs are often seen as representing Web3, the one over which we have full control over our data. But to have this full control, there is still a lot to put in place beforehand:

  • Confidentiality of our personal data
  • Full consent to the sharing of this data
  • Recognition of digital professions
  • Valorization of digital artists
  • Democratization of end-to-end encryption
  • Quality internet access anywhere in the world
  • Bridging the digital fracture
  • More public consultation for digital regulations

NFTs can solve some, but not all, of these problems. And you don’t build a castle on sand, right? Based on this observation, wouldn’t it be more accurate to consider NFTs as they are now as overlays of Web2? 

As a kind of band-aid on problems that have been put aside for too long. 

Maybe we should call NFTs web 2.5 rather than web 3. 

What are NFTs utility?

Apart from financial freedom granted to a few, the question may therefore arise: what is the real use of NFTs? Revolutionizing the internet would be the most coherent response.

Not upgrading, revolutionizing.

The transparency and non-censored aspect induced by a sufficiently decentralized blockchain highlights the problems that already existed beforehand. This time, the power to verify information is in anyone’s hand and not just a small private or government group.

For online creators, this change is a dream opportunity: it offers them the opportunity to enter a market on an equal footing with anyone else. With, in addition, the possibility of receiving royalties on the resale of their NFT for life. Without these digital creators, it is impossible for a brand to be seen effectively.

For entrepreneurs, more and more aspects of our lives are being digitized. But only some of these aspects need to be ‘tokenized’.

Which ones? It’s not up to the NFT or crypto community to answer alone. It is up to all actors and users of the Internet.

NFTs have highlighted problems and solutions. They have created a bridge between the internet of tomorrow and that of today. It is up to Internet users to grasp the substance of the problems rather than focus on the form!

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