The big buzz on NFTs is crashing the internet. And although many of us still don’t even understand what cryptocurrency really is, plenty of us are rushing to get into this promising world. However, when it comes to the future of NFTs, it is sad to say that artists might be a little too late.
Kulture Hub had the opportunity to talk with Shidan Gouran, co-founder and president of Global Blockchains Technology Corp. What follows is an incredible insight into what creatives can expect of NFTs in the future.
But first, what are NFTs really about?
As a matter of fact, NFTs are basically another form of cryptocurrency. This time, however, they can be literally whatever digital object you want.
From a Twitter handle, digital NBA cards, to a digital work of art. And, according to Shidan Gouran, that is exactly the problem with it.
“NFTs can represent a contract, but they can also represent something completely meaningless. You are not actually buying the rights to anything. It’s just kind of hype nonsense.”Shidan Gouran, 2021
However, the reasons behind all the hype are actually good and meaningful. People have realized the tremendous value of uncentralized networks and the beneficial use they give to their creations.
For the digital artists, in particular, it actually makes a lot of sense. In theory, this could potentially solve the problem of authentification making it easier to manage copyright material. Not to mention, this method allows transactions to be much more profitable, as artists would be able to profit every time the work is re-sold, faster, and safer.
Take the case of Beeple, the Instagram sensation that sold his first NFT through Christie’s at almost 70 million dollars.
Sounds promising, huh?
The problem with the future of NFTs
“I think you are going to see a major crash in this space when people spend their money there and realize they are buying nonsense really.”Shidan Gouran, 2021
The theory is awesome. But the internet is not there yet. Not to mention, it takes an excessive amount of energy and it is not sustainable. To put it on a scale, every bitcoin transaction costs a trip from one side of the states to another and right.
However, this fantasy world where grassroots artists are able to profit from their art creates problems where promises are hard to keep. According to Gouran, the future of NFTs is different than what we expect.
Like in any market, its saturation makes it inefficient. So, artists hear stories like Beeple and expect to have his same success. But according to Gouran, the market would simply not hold to that amount of artist getting an NFT.
“I think at some point this would become a market of musical chairs, where the market won’t want what the supply is. I think right now the disadvantage is that all artists saw this and rushed into it, even the ones that were dismissive of this space and they are just not going to see those results.”Shidan Gouran, 2021
So, if it’s not already, it would soon become too late for these grassroots artists.
The future of NFTs, contrary to art, is bright for gaming
However, Gouran insists that NFTs still have a bright future many years away. For businesses like the NBA or any sports trading cars, the future seems more promising.
“I think other businesses like baseball cards, or basketball cards are going to become NFTs and are going to be traded in a completely de-centralized fashion using a regular database. But they are going to have the option to move it outside the platform just like any exchange, and take it somewhere else and bring it in as an NFTs. So that is where I think you are going to see the scalability of it and the real use for the near future.”Shidan Gouran, 2021
And, of course, games.
“So, imagine buying a game inside of roadblocks and moving it to a completely different game.”Shidan Gouran, 2021
According to Gouran, in games assets, NFTs make perfect sense. They are successfully creating an online economy where these assets become more valuable.
Not to mention that they are also taking care of DRMs so they know that no one can cheat their systems. Plus, it is cheaper for them. They can move it from one game to another and that is really a big deal.
Currently, all the major publishers of games and platforms are looking to create a consortium that could do these types of things. Something that could potentially move one asset from one company to another, and they are looking to use NFTs for that purpose.
“Actually, I think that when gaming companies come on board, and they are all working on this now, the DRM solution would be baked in and that is really their benefit for doing this.”Shidan Gouran
What else is there to expect?
Shidan concluded that in the next two years, we can expect the hype with grassroots artists to die out. Not only because of market saturation but the fact that this type of situation is not scalable to start with.
But, we can expect exponential growth in sporting and gaming consortiums that support this kind of collectibles as assets.
However, limiting NFTs to the digital world overlooks the possible opportunities they could have in the physical world too. The physical world already trades this collectible, (people collect cards, jewelry, etc).
There is a possibility of using NFTs in these as a transaction receipt or potentially a warehouse receipt where people won’t actually have to redeem the goods.
And also certification for other goods like art or even jewelry. With NFTs associated with any of these goods, the authentification and certification process would be much easier. Because once you have this online, it is not a company that has to take care of it, but a decentralized system.
This is an amazing and more effective way to make things more efficient.