NFT’s are gaining a lot of traction and attention right now due to the various applications it has and the immense ways in which it can be used to convert anything into a digital version that can be traded online, thus making it a wonderful opportunity for collectors, investors and enthusiasts in various fields including sports, music, art, drama, films and a lot more. With benefits like this, NFT’s are sure to attract the attention of businessmen and be the centre of full-blown start-ups based on NFT’s.
Yes, there exist some start-ups that are working on using blockchain technology and building marketplaces for NFT’s to buy, sell and trade these tokens which are growing in popularity each day. But there exist some real problems that are hindering the growth and stopping them from scaling to unimaginable heights. The technology used now to back eth and Bitcoin is extremely inefficient from an energy standpoint, causing large scale damage to the environment by leaving a large carbon footprint behind. This is a factor that repels certain artists and stops them from converting their art into NFT’s and contribute to the growth of this sector. Apart from the environmental factors there exist many problems with the current solutions. Let’s take a look at them from both the supplier and the consumer’s point of view.
Undoubtedly there exist a million options out there for creators to choose from when it comes to picking the right platform to list their NFT’s and allow them to be bought and traded. Despite this, there ceases to exist a solution that makes the process of minting easy. The method of listing, navigating, monitoring the sales and resales of their NFT’s seem to be an extremely tedious task. Indeed, a reason for them to avoid NFT’s altogether.
NFT’s are bought and sold primarily using cryptocurrencies like eth and BTC now. The time when the vast use of this currency comes into play is far from near, so the use of this as a primary currency tends to be another addressable issue. The use of fiat currency is still predominantly used globally, so using that to fund NFT transactions might seem like a more viable option with the current scenario in mind.
Blockchain is the technology that forms the basis of non-fungible tokens. The levels of security and the complexity associated with it fend off some creators as the task of understanding how it works and how they can be implemented can be a mind-numbing task for some.
In the case of cinema and sports, NFT’s could be made representing an entire team/film. The ownership of such NFT’s is difficult to determine and even if it is, the splitting of funds from its sale and resale is an awfully demanding task, unless it is automated with the support of some applications in the future.
NFT’s are expensive. The minting, listing and trading of NFT’s are not targeted for the majority audience of the internet as the monetary values linked with it are obnoxiously high. The security associated with NFT’s is provided by the use of some popular blockchains that verify the minting process. This verification and security come at a price, called the gas fees. The fees that the blockchain charges for the proofing and verification of the NFT’s.
An issue that is common to consumers as well, is the dependency of NFT purchases on cryptocurrency and the inability to be able to purchase it using other currency (in-app currency and fiat currency).
When a certain object is in demand, there tend to be fakes that popup, that are used to cater to the needs of the fans and mint money from. The issue of fake collectables is one that might cause some panic in the NFT and crypto space as well. Fake versions of popular fan collectables might go around, which will question the reliability and authenticity of the marketplace itself at times.
The lack of proper forums for discussion related to certain memorabilia. Fans love community discussions with like-minded people and also input from experts in that field that pertains to them, gives them some context of the token at hand. This sort of system where feedback can be given by experts, discussions can take place and NFT’s can be bought and sold is the need of the hour. It combines Reddit with a purely transaction-based marketplace which can lead to a great overall experience. ITSMYNE is Reddit for buying and trading licensed digital collectables.
As mentioned earlier, NFT’s are perceived as something meant for the rich and inaccessible to the masses. The high prices of tokens make it impossible for everyone to invest in their favourite tokens. The concept of fractional ownership (something akin to what masterworks.ai are doing) might contribute to solving this problem to a large extent.
A strict NFT marketplace is something that people will visit occasionally which will limit their frequency, engagement and leading to a very transaction-based experience all in all. This might lead to the user getting bored, moving onto some other platform, which basically reduces the lifetime value of the customer.
These are some of the problems that are currently being faced with respect to the NFT marketplace situation. ITSMYNE is working on eliminating these and building a sustainable and worthy solution to all these problems.