The crypto market has been up and down in 2021, with the roller-coaster ride leaving many feeling dizzy. From Bitcoin and Ethereum to Non-Fungible Tokens (NFTs), investors have seen huge gains followed by big losses – and it doesn’t look like the turbulence will be ending anytime soon. Despite the volatility, NFTs have remained a major part of the market, as unique digital assets that provide scarcity and a purpose-driven approach to investment. However, one challenge that continues to plague the NFT market is the ongoing lack of clarity on copyright law and the digital-first sale practices emerging in the blockchain Napster era.
Cryptocurrency has made the concept of digital scarcity possible, as users are able to ensure that digital goods can exist in fixed quantities and have real genuine value. NFTs have become a popular use case for this kind of digital scarcity, as they represent digital goods that are indivisible and cannot be replicated, creating a unique and distinctive offering in the crypto market. However, because the law has not yet caught up with the technology, the courts remain stuck in the ‘Napster era’ when it comes to digital-first sale practices. This creates an ongoing challenge for creators of NFTs, as they may not have the legal ability to invalidate entire secondary markets.
The future of NFTs lies in projects that focus on utility, community building, and an authenticity that can be trusted to remain resilient in an ever-changing market. With the motto ‘buy the hype and sell the news’ driving the hype-driven market, savvy investors will look to identify projects that will stand the test of time. Projects that prioritize long-term utility, sustainable communities, and Web3 strategies will be best positioned to make it through the turbulence that is sure to continue in the months and years ahead.
The market for NFTs has been thrown a curveball in 2021, but with the right direction, it could be an incredible opportunity to establish strong digital-first sale practices and create a brighter future. As long as the law continues to catch up to the technology and creators ensure that projects are focusing on long-term utility, it is likely that the NFT market will continue to evolve and remain a key part of the crypto space for years to come.
