Good morning from New York City, which is basking in early summer weather as crypto enthusiasts attend NFT.NYC—an annual conference and shindig that revolves around non-fungible tokens. The vibe is more subdued than last year’s get-together when the price of most NFTs was 90% higher than today, and when it was easy to find people eager to spend hundreds or thousands of dollars for pixelated monkeys.
Despite the downturn, NFT devotees told me they remain convinced that non-fungible tokens will transform everything: culture, collectibles, and more. As usual, I found many of their arguments persuasive—in theory at least. But I do find myself wondering why, if NFTs are so transformative, they have failed to gain traction outside of a niche subsection of the crypto world.
I think one reason is the name. The term “non-fungible token” is confusing and overly technical, and fails to invoke any real-world product or experience. This feels like a giant branding misfire on the part of the crypto community, but at this point, we appear stuck with it. NFTs also face a more serious obstacle in that, for most people, the world of tokens and wallets remains a bewildering experience.
This may be starting to change, however, as popular brands begin to adopt NFT technology in a way that hides all the messy crypto elements. Starbucks, for instance, sold 2,000 NFTs in less than 20 minutes last month as part of its membership program but called them “digital stamps,” which is a far more relatable term. And as Fortune reported in December, Reddit quietly created a $10 million market on its platform while calling the tokens “customizable avatars” instead of NFTs.
This is a step in the right direction. Meanwhile, some of the smarter minds in crypto are offering new insight into how NFTs should fit into our culture in the first place. This includes Li Jin, a founding partner at the venture capital firm Variant, who has written an intriguing piece for Harvard Business Review about how product designers should build psychological attachment into NFTs and other elements of Web3.
Jin cites the example of Spotify, whose customers don’t regard the platform as simply a music service but as a part of their identity. Likewise, people value their profiles on platforms like Instagram as a digital extension of their real-world selves. According to Jin, this sense of attachment increases when someone can customize and store an element of their digital lives—an experience that NFTs are well poised to deliver.
If she is right, NFTs are likely to become part of our day-to-day lives. But how long this will take to happen is anyone’s guess.
Jeff John Roberts[email protected]@jeffjohnroberts
DECENTRALIZED NEWS
Law enforcement’s growing familiarity with blockchain tracing tools has changed the perception of Bitcoin as an anonymous currency. (WSJ)
The price of FTT tokens doubled in response to news that the overseers of bankrupt FTX may reopen the exchange. (CoinDesk)
Block announced a partnership with the African crypto exchange Yellow Card as part of a broader push by the company into cross-border payments. (Fortune)
Ethereum broke $2,000 for the first time since last summer in response to the success of the Shanghai upgrade. (Bloomberg)
Twitter will let users trade crypto and stocks through a tie-up with eToro. (CNBC)
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