[imagesource: Chris Torres]

A non-fungible token, or an NFT, provides a method of authentication for a piece of digital content, based on blockchain technology. It certifies and tracks the ownership of a unique digital asset.

For example, that work above, Nyan Cat, recently sold as an NFT for $590 000 (around R8 million), and that’s far from the most eye-watering figure.

A digital artist known as Beeple sold a digital collage called “Everydays — The First Five Thousand Days” for almost $70 million (at the time, R1 billion) on auction in March, and that sparked a frenzy.

Digital hoodies? Around R370 000, and as much as you might have enjoyed the ‘Charlie Bit My Finger’ video, would you really buy it as an NFT for $760 999 (around R10,3 million)?

Here we are, mere months after everyone went NFT befok, and already the bubble is bursting. Gizmodo below:

The current answer to the question “What is the value of an NFT” appears to be “not much and dwindling fast.”

Crypto news site Protos reported on Wednesday that NFTs tracked in the Nonfungible.com database peaked on May 3, booking $102 million in NFT transactions in a single day.

The seven-day period surrounding the peak brought in $170 million in transactions. But in the past week, that number collapsed to $19.4 million in NFT sales, a 90% drop from the peak.

In addition to a huge drop in sales, the number of active NFT wallets – which are the accounts being used to purchase the tokens – has already fallen from over 12 000 to 3 900.

Let’s see the drop-off in graph form:

Image: Protos / Nonfungible

The recent drop in Bitcoin price, as well as other cryptocurrencies, would have spooked the market, but this is not great news for NFTs on the whole:

NFTs were always about speculation, and interest in both the big-ticket art items and the cheaper collectibles is fading rapidly. Sales are plummeting. The NFT bubble has popped.

That same sentiment is echoed on Kotaku:

Now, this isn’t to say any of the companies involved, or the major figures partaking in NFT sales, are going to disappear…

But for now? The bubble has burst, and this hopefully spells the end of breathless and unquestioning mainstream media coverage of the concept, and the deeply questionable gold rush that saw formerly sane artists and fans hurl themselves on the pyre in pursuit of a quick buck.

Who among us hasn’t hurled ourselves on a pyre to try and get rich?

There are some elements of the NFT market that appear to be doing alright, like the NBA’s digital trading cards, but as a whole, it’s a worrying picture.

[sources:gizmodo&kotaku]