Mable Jiang, a partner at Multicoin Capital, noted down her new understanding of NFTs on Twitter. With the popularity gained recently, NFTs can be seen as a new form of value storage and transmission, compared to how they were viewed six months ago.
Mable states that NFTs should be categorized concerning a specific medium instead of being defined as a general category.
NFT marketplaces have evolved massively since their inception. NFTs were used to offer everything from in-game assets to arts but can now offer a specific type of medium such as image, video, music, text, etc.
Tokenize IPs To Increase Growth Rate Of NFTs
Intellectual properties (IP) of real-world assets can gain traction for their NFTs easily as they can skip the process of forming a new consensus. NFTs are all unique collectibles and hence, don’t require a consensus algorithm. Jiang stated,
“Tokenizing existing IPs is a crucial step in driving mainstream NFT adoption from the non-crypto world.”
NFTs can become an essential form of value storage, hosting multi-dimensional information in the long run, but they cannot be monetized right now. Jiang says before reaching that point, there will be a phase where the value of communities and real-world social relationships can get on-chain.
Assets on the blockchain have seen immense growth in efficiency and speed of information transfer in recent years. Information can be cut into smaller and smaller pieces and transferred with lower costs. Users can freely bundle and unbundle these fractionalized pieces in all possible ways.
An example of this is the different breeds Cryptokitties offers now or the programmable art that Async Art had proposed.
Interoperability Of NFTs Must Be Explored
The interoperability of NFTs is a core value that is yet to be explored. The information of the assets is all permissionless and public. One asset or piece of information can be reused anywhere else with the blockchain ecosystem, and maybe in the future, on another blockchain too.
NFTs carry that potential with them, and blockchain interoperability creates the on-chain liquidity premium. Together with DeFi, the future of metaverse is ripe with possibilities.
Jiang further added,
“During my recent conversation with @kankanivishal, he suggested and I agreed that if we say a fungible token contains one scalar quantity, then an NFT can contains N scalar quantities. In the world of blockchain each of these scalar quantities can be striped and rebundled.”
Can’t Predict What NFTs Can Evolve Into
NFTs are still in their early days and there’s immense scope for development. As stated by Jiang on her Twitter thread,
“We are in the early days of NFT's development. Similar to how people designed light bulbs in the shape of candles, or how in the 1990s yellow pages looked like magazines, the NFTs we see today are likely going to be massively different from how they look like in 5 years.”
Human economic behavior is highly unpredictable and can influence NFTs in ways that one cannot foresee right now. Conceptually, NFT will contain the layers of information generated from various streams, amalgamated under one asset.
Good Infra is The Need Of The Hour
Based on the above assumptions, Jiang states that the NFT space needs good infrastructure. NFTs have a highly prospective future that can help artists, creators, and others to organize and collate their pieces of information, creating a crypto-collectible that they can present the public with. Or it could be useful as a simple fractionalization layer.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.