Temporary depression or bursting of a bubble? The market for certified digital objects (“NFT”), very flourishing since its emergence last year, has just come to a sudden stop and must now improve to attract the general public and last, according to specialists.
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After generating $44.2 billion in 2021, “NFT” (“Non-Fungible Tokens” or “non-fungible tokens” in French), these unique digital assets authenticated on the blockchain (or “blockchain”) – the technology that serves as base in particular for cryptocurrencies such as bitcoin – saw a drop in spending volume of 75% between February and mid-April, according to firm Chainalysis.
Mini-Crash Symbol: The NFT from the first ever tweet, bought for nearly $3 million in 2021 and auctioned off again on April 7. Its owner expects 48 million dollars but, at the moment, the best offer is barely more than… 20,000 dollars.
The sale of virtual land in “Otherside”, the “metaverse” (digital universe) of the “Bored Ape Yacht Club”, the most famous club of “NFT” owners, however, reached several hundred million dollars in 24 hours through Begginings of may. .
For the general public, it’s hard to understand this highly volatile market in the hands of a few big carriers called “whales,” these heavyweights who drive “the NFT buzz” using their clout, according to Molly White, founder of a company specialized site that identifies scams in the world of cryptocurrencies.
So, beyond the fashion effect, on what basis can we base ourselves to define a “fair” price that everyone can understand?
Rather than “utility,” it is the “status” conferred by owning an “NFT” that seems to establish its value, Molly White continues. The “NFTs” available in few versions, such as the “Bored Apes”, give access to very closed groups, and therefore are the most expensive.
The crypto artist “Louis16art” offers to rely on the fame of the author, the identity of the previous owners of the “NFT”, the quality of the work, as well as the technique used, some being more demanding than others. others.
Other specialists advocate in particular the creation, in the image of what exists in traditional art, of a database intended for novice buyers and supplied by specialists in digital art.
Problem: These assets are mainly sold on “Opensea”, an unregulated market. “However, as soon as you have a new technology, you immediately have scammers on the lookout,” Eric Barbry, a specialized lawyer associated with the Racine firm, told AFP.
In January, the platform revealed that 80% of the images freely transformed into “NFTs” on its network were fake or stolen. “+ Opensea +, it’s a huge project, we don’t know what we’re buying there,” says Olivier Lerner, co-editor of the book “NFT Mine d’or” with Sophie Lanoë.
For Molly White, the market will not succeed in attracting the general public without stricter “regulation” and “consumer protection”, even if greater control risks diminishing the interest of this market, based so far on a strong profit attractiveness.
“It’s the Wild West,” sums up Sophie Lanoë, for whom the bursting of the bubble is, however, an opportunity to start over “on solid foundations.”
“As long as we don’t have a specific right, we must adapt the + normal + right to the NFT”, warns Eric Barbry, for whom an evolution of the regulations will be made “according to the maturity of the sector and its development”.
Beyond the security flaws and persistent legal “loopholes” that can deter the acquisition of “NFTs”, how to simplify their purchase, which is still complex to understand for a non-tech-savvy public?
“No one understands anything about it, but everyone loves it”, Olivier Lerner wants to believe.
To help this market, “it is enough that the platforms are easily accessible”, by not asking for a specific portfolio for each type of digital asset, he proposes for example.
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