Most NFTs are now worthless, according to a new study that signals the end of the cryptocurrency craze that saw internet users trading what amounted to digital pictures with each other.
And it was indeed a craze, as NFTs had reached nearly $2.8 billion monthly trading volume in August 2021. But now, the NFT crash has occurred, and most NFTs today amount to no value.
That’s what’s surmised in the report “Dead NFTs: The Evolving Landscape of the NFT Market,” authored by a group of finance and blockchain tech experts, as Rolling Stone reported this week.
Calling the turn of events “shocking,” the researchers found “of the 73,257 NFT collections we identified, an eye-watering 69,795 of them have a market cap of 0 Ether (ETH),” which is the second most-popular cryptocurrency after Bitcoin.
READ MORE: LimeWire Is Now Peddling NFTs
The study says, “95% of people holding NFT collections are currently holding onto worthless investments. Having looked into those figures, we would estimate that 95% to include over 23 million people who’s investments are now worthless.”
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The researchers say, “This highlights the incredibly high-risk nature of the NFT market and underscores the need for careful due diligence before making any purchases, especially ones of high-value.”
What Are NFTs?
NFTs — non-fungible tokens — are essentially digital certificates of authenticity that point to a file, such as an image or video, and exist on a record-keeping blockchain in a way that makes them uniquely identifiable and able to be sold and traded.
Just a couple of years ago, they were positioned by some as the latest harbinger of a new decentralized web known as Web3. Some NFTs sold for millions and some celebs endorsed the trend.
But critics had pointed out that someone who buys an NFT doesn’t usually own the underlying file, only the token itself. That’s often the case with digital art, as the NFT basically functions as a link to that file on the internet — the original copyright remains with the creator. Still, anyone could save and copy that file (though they wouldn’t own it on the blockchain), and the NFT’s link could possibly be changed.
Alas, the overall consequence seems to be that, although proponents at the time estimated NFTs would only increase in value for their owners, they have nearly all plunged to rock bottom valuation.
NFTs + Music
As with any new tech, NFTs came to music. In 2021, artists including Avenged Sevenfold and Linkin Park’s Mike Shinoda began making or “minting” their own NFTs. Even late rocker Kurt Cobain’s Nirvana became the subject of an NFT series.
But in 2022, the music NFT website HitPiece was shut down when the Recording Industry Association of America (RIAA) declared it a “scam operation” and sent it a letter threatening a lawsuit and demanding it stops infringing on musicians’ IP. HitPiece had called itself a marketplace that “lets users buy and sell NFTs from musicians.”
What do you think of NFTs? Did you ever buy one?
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