The End of the NFT Craze: What Did We Learn?

At the start of 2022, almost everyone heard about NFTs. It wasn’t something you could ignore or not get curious about. Because insane amounts of money were getting splashed on NFTs, Celebrities and household names were creating, adopting, and purchasing NFTs, each day, NFTs were a topic you would see Trending on Twitter and other Social media platforms.

And global searches of NFTs were off the roof. It was like it was something that became popular overnight, similar to musicians like Billie Eilish, who came up to become Global stars in one day and never went back down. But the sad news is that NFTs did!

Contrary to popular belief, just like the notion that musicians like Billie Eilish became Global Superstars overnight, NFTs didn’t just become popular in a day. The History of NFTs can be traced way back to the year 2012.

History of NFTs

Before the existence of Ethereum, Meni Rosenfield published a paper in the year, 2012 that suggested a ‘Coloured Coins’ proposal for the Bitcoin blockchain, which became the push needed to actualize the concept of NFTs.

The concept of these Coloured Coins was to establish a class of methods for recording and maintaining real-world assets on the Blockchain in order to show ownership of such assets, similar to conventional Bitcoins, but with an extra ‘token’ element that dictates their usage, separating and distinguishing them.

Because of the constraints of Bitcoin, the Coloured Coins proposal was never implemented; nevertheless, it did provide the groundwork for the trials that led to the development of NFTs.

Kevin McCoy minted the very first NFT named – ‘Quantum‘ on the Namecoin Blockchain network on the 3rd of May, 2014. ‘Quantum’ is a digital picture of a pixelated octagon that hypnotically changes colour and also pulsates in an octopus-like fashion.

After these developments, there was an incredible amount of research and development, and platforms were established on top of the Bitcoin network. The Ethereum Blockchain also began its early dominance over NFTs.

Bitcoin 2.0 was founded and grew in popularity as a platform for the creation and development of digital assets.

What Features Made People Interested in Purchasing NFTs?

• Because NFTs are indivisible, they cannot be divided into smaller quantities like other cryptocurrencies.
• Because NFT tokens reside on the Blockchain, they cannot be withdrawn, erased, or recreated – They are unique.
• Blockchain guarantees that the creator can be easily identified, and there is no need for third-party verification.
• Because NFTs are rare, their popularity and value increase, which is why people are eager to create NFT tokens.
• Contracts can be included in NFTs; Smart contracts are feasible owing to the Technology behind the Blockchain; when certain circumstances are met, the next action is triggered. For example, an NFT that has a contract gives artists a portion of the earnings from the NFT’s future sales.

What Caused the Decline of NFTs?

The monthly volume of sales on the biggest NFT platform, OpenSea, fell to $700 million in the month of June, dropping from $2.6 billion in the month of May and much below the record of almost $5 billion in January.

According to Chainalysis economist – Ethan McMahon, there has been a lot of buzz in 2021 and 2022 and a half around what might be termed profile picture NFT collections. These are collections like the popular Bored Ape Yacht Club, which sold NFTs for more than $2 million each piece, as well as digital artist Beeple’s cryptocurrency art, which sold for $60 million for a single piece near the pinnacle of the NFT frenzy in 2021.