The internet is abuzz with words like cryptocurrency, blockchain and now, NFTs. The question for many of us is, what is an NFT?
Meet the non-fungible token
NFTs (non-fungible tokens) are digital assets created on a blockchain technology that can be traced back to the original owner or creator. They “can be works of art, photos, music, videos, collectibles, memorabilia, contracts, coupons, certificates of authenticity, ID files, health records, and more.”1 NFTs are extremely automatic and transparent as they allow businesses “to create digital proof of ownership, attendance, and even transference to different experiences they offer their customers.”2
The buzz around NFTs
NFTs have been the talk of the internet, as the demand for digital art and the rise of cryptocurrency aligned with the COVID-19 pandemic. As COVID confined many of us inside our homes, people became crafty when searching for alternative sources of income, according to a recent report by Research and Markets. Celebrities have also joined the NFT craze—by buying NFTs or introducing their own NFTs. The Bored Ape Yacht Club, perhaps one of the most famous and expensive NFT collections, has attracted buyers such as musicians Justin Bieber, Eminem, Snoop Dogg and Timbaland.
NFTs and Canada
NFTs have also made their way close to home. In May, Black Rhino—an Ontario based start-up company announced it is bringing together wildlife conservation and blockchain technology. Black Rhino’s Early Adopters is its first collection of NFTs partnered with Keep Nature to support BioRescue, a scientific rescue program. Through this initiative, Black Rhino is working to help save the Northern White Rhino species. The Early Adopters NFT collection was released on Solana, which is an environmentally friendly proof-of-stake blockchain.
“We are really proud to work with Keep Nature Alive and the Conservation and Research Fund to support this wonderful mission of BioRescue, working to save the Northern White Rhino species. Today it may be the Northern White Rhino, but tomorrow it could be a number of other important species or habitats that we need to help. This is the first step towards looking at modern technologies,” said Brandon Samuel, co-founder of Black Rhino in May. The NFTs released feature “the inner beauty of a vulnerable Tortoise species using computed tomography scans taken at the lab.” Black Rhino also says it will provide “non-profit organizations around the world access to blockchain powered tools and opportunities, such as cryptocurrencies, ledgers, and NFTs.”
In Vancouver, blockchain-based Global Fit Club announced in May that when its members join by purchasing the Global Fit Club NFT, they will get access to gym services and discounts by simply holding the NFT in their crypto wallets. Over time, as long-term users, members will receive free tokens that can be exchanged for fiat currency. Members can also be “paid” by participating in the company’s move-to-earn game, where users earn from completing daily workouts. This is the first time that real life utility is being applied for NFT holders, as most “move-to-earn” gaming NFTs have no value outside the game.
The crash
While some businesses are trying out NFTs, the market has taken a major hit in 2022. Along with cryptocurrencies, the NFT market has crashed in value. According to bitcoin.com, NFT sales over the last 30 days have dropped by 74.44 per cent. Total sales were $1.07 billion, down from $4.18 billion in the month prior. The Bored Ape Yacht Club saw its sale prices decline in May, dropping by 60 per cent. The average sales value slid by $89,666 in May, seeing average sales value of $218,850 down from $308,517 in April. The Jack Dorsey tweet NFT, which sold for $2.9 million US last year, was listed in April for $48 million in an auction. The top bid was a paltry $0.09 ETH (worth $277 in April). Ethereum—the blockchain where most NFTs are a part—has seen its value plunge by 70 per cent.
Despite this, NFT analysts state that the market has halted in the past and later rose back to its former glory. It is possible that new innovation will pick up the pieces of NFTs like Bored Ape Yacht Club and positive cryptocurrency conversation will begin again as emerging companies like Black Rhino and Global Fit Club find new ways to use NFTs to their advantage.
References
1Constantino, Tor. “5 Ways NFTs Can Kickstart Your Small Business: How your business can benefit from the NFT bonanza.” Inc., (2021).
https://www.inc.com/tor-constantino/5-ways-nfts-can-kickstart-your-small-business.html
2Stelzner, Micheal. “Why NFTs for Business: What You Need to Know.” Social Media Examiner (2022).
https://www.socialmediaexaminer.com/why-nfts-for-business-what-you-need-to-know/
