Are NFTs the Key to Blockchain Going Mainstream?

The crypto market is currently going through slightly choppy waters, with both Bitcoin and Ethereum experiencing significant pullbacks over the last couple of days. Many are speculating that this is the end of the bull run. While there may be a downturn for the market in the short term, it is important not to lose sight of how far crypto has come in the last year. The total cryptocurrency market capitalization is currently nearly six times what it was last year. 

This is the result of a year that has seen crypto gain unprecedented mainstream attention. The arrival of institutions in the space, culminating in Tesla purchasing 1.5 billion worth of Bitcoin, was a huge moment in legitimizing cryptocurrencies in general. 

However, in the first quarter of this year retail investment outnumbered institutional investment in Bitcoin at a ratio of 187,000 to 173,000. This is in contrast to 2020 which saw institutional investment in Bitcoin outnumber retail investment. This indicates that despite the interest from institutions, crypto bull markets are predominantly driven by retail investment. 

The fact that retail is still the driving force in the market is indicative of the decentralized nature of crypto. However, it also means that for crypto to continue to grow it is important to be able to bring more retail investment into the space. Currently, most retail investors will have at least some exposure to crypto in their portfolio. 

Holding digital assets is not the same as actively engaging in blockchain protocols though. Despite the huge gains made in the DeFi market, the entire market cap of the DeFi industry is less than 15% that of Bitcoin alone. This indicates that although the mainstream are starting to invest more and more in crypto, they are still not utilising blockchain in an active way. With this in mind, crypto needs to bring a new demographic into the space that fully engages with blockchain. 

The NFT Solution 

There is no area of the crypto sphere that engages people in the same way that NFTs do and this could be the key to true mainstream adoption of blockchain. When the NFT hype earlier in the year died down, many people wrote NFTs off as a fad. However, we are currently seeing another massive surge in the market with the number of sales doubling between April and August. 

Generally speaking, crypto attracts people as a means to store wealth or as an alternative to banking. In other words, it appeals to investors and speculators. NFT collectibles on the other hand, are able to appeal to a totally different demographic. They engage people in a much more playful way and represent a totally different type of investment. Holders of NFT collectibles are looking to make returns, sure, but they are also members of an online community built around NFT cartoon apes or whales. They engage in lotteries and NFT drops trying to get a rarer version of a cartoon cat. The NFT collectible market is decentralized finance colliding with Pokemon cards. 

Lucky Maneki is a great example of different aspects of the NFT world. It’s an NFT collection on the Ethereum chain composed of 14,159 NFT characters based on Japanese lucky cats. They are programmatically generated from a combination of 410 variable characteristics so that each one is completely unique. Certain Manekis inherit “fortuitous” mutations that make them rare than others, qualifying them as either rare or Epic Manekis. An additional collection recently became available.

Holding one of these NFTs gives the owner a vote in the community and enters them into a lottery with a prize of 10% of the ETH collected from the protocol. The investor also has access to different quests (that reward players with cryptographic prizes), as well as the Lucky Bank, which contains funds to be used for community initiatives voted by NFT owners. 

The community-owned, decentralized ecosystem demonstrates the different layers of an NFT project. It’s a combination of investors and collectors that form a very active user base. It encapsulates the driving force behind the NFT boom.

Making Blockchain Engagement Necessary 

One notable aspect about NFTs is that they are not stored on centralized exchanges, which are cryptocurrency markets with all of the most popular coins. Buying coins on these exchanges is exceedingly simple. This means that NFTs force those interested in investing to learn how to use decentralized marketplaces and other basic features of the crypto world. In addition to this, NFTs can be easily minted by artists, influencers, or even normal investors. This, of course, familiarises an entirely new demographic with some key concepts of crypto. 

There are also some projects that put NFTs directly in the mainstream consumer’s line of sight. Many different films and TV shows are currently using NFT to market themselves and gain a new revenue stream. Everything from massive pop culture icons, such as characters from the Marvel Universe, to clips of NBA games. A project called TokenSociety is using NFTs called “Snippetz” to raise funds for independent entertainment projects. Snippetz are short clips of a show minted as NFTs. They launched this new program by selling Snippetz to fund the pilot of a new show called “Men of the House,” a day in the life of a father and his three sons. Snippetz can also be accompanied by real-life experiences and assets, anything from meet-and-greets with the cast to props from the show. Projects like these put NFTs directly into fan’s wallets whether they intended to involve themselves in crypto or not.

Another project will soon make NFT technology part of our everyday lives. They move healthcare data sharing onto the blockchain. That means that instead of a hospital or institution owning your healthcare data, you will own it and control how it is used. They recently revealed part of their ecosystem named NFT.HLTH.network, which is a genomic NFT marketplace. Users can store their genomic data as NFTs and give consent to research institutions to use this data for science. For a price. These NFTs can also be gifted to friends, family, and even pets. Dog breeders can use these NFTs to prove the authenticity of their pups. One day, everyone will own their own genetic data as an NFT, and no one will have the opportunity to steal or use that data without consent. 

NFT Twitter accounts and Discord servers are alive with people hunting for the next NFTs drop so that they can add to their collection. The space has mass appeal and it’s familiarising people with blockchain in an unprecedented way. NFTs could well be the technology that brings the rest of blockchain truly into the mainstream.