But don’t dismiss NFTs as a fad just yet. While the majority of NFT sales so far have come collectiblesart and replicas of physical goodsAccording to experts, there is much greater potential in the future to harness the blockchain technology behind NFTs to revamp the media and entertainment sectors, from real estate and subscriptions to events and music.

Some of the fanfare is dying down due to the general economic downturn, that analysts believe could lead us into a recession, as well as the general volatility in the cryptocurrency market. NFTs are linked to crypto and can be created as physical or digital goods, and regulators are still trying to figure out how to tax these transactions.

Why the NFT fever is fading

During the last quarter, mentions of NFTs on social media fell more than 48% between January and March, according to GlobalData. Additionally, a market downturn has been crushing much of the tech industry as a recession looms and revenue gains during the year of the pandemic have slowed. During a recession, investment fads like NFTs and meme stocks tend to lose short-term appeal.

“There are concerns that the NFT hype is over, with Google searches for NFTs more than halving since January 2022,” said Amrit Dhami, an analyst at GlobalData. “However, the excitement around NFTs was renewed with Meta’s recent announcement that NFTs would be brought to Instagram.”

Dhami is referring to Meta’s Instagram NFT launch in May, which allows users to add NFTs to their profiles and is compatible with various blockchain networks. Twitter recently added a feature to allow an NFT profile picture and the ability to mint NFTs on the platform. Some believe that these experiments by social giants could make NFTs more mainstream and push other companies to follow suit.

“The more adoption from the tech giants, the better,” Mark Basa, director of crypto firm HOKK Finance, told TheWrap. “Facebook was the first company to really figure out its identity on the Internet, and now the identity [in Web3 and who you are] It’s going to be a key growth area.”

But in the short term, crypto expert and former Mauldin Economics analyst Robert Ross predicts that the NFT market will continue to plummet, with many prices falling before their next bull run coincides with the crypto market.

“NFTs proved resilient at the start of this crash, but price floors are now starting to collapse,” Ross said. “Now that the initial mania has faded, a major washout is likely with the vast majority of NFT prices falling by 95% or more. Most will never see new all-time highs, however this is the time to start speculating on the next big move higher.”

What is NFT 2.0?

In general, experts think that the original art NFTs or the replica sneakers that have attracted so much attention have not been really useful or valuable, beyond serving as collector’s items or providing some nostalgia. In the future, they see us using NFT in more practical ways, whether through streaming subscriptions, album releases, or even buying ownership shares, further leveraging smart contracts, or programs to execute deals, stored on a blockchain. .

The possibilities for future applications of NFT could affect not only media companies, but also everyday consumers, as blockchain creates a digitally distributed, decentralized, public ledger of every content update, from a sale to a purchase. addition of new material (such as a new song). in an album).

Shahid Khan, a partner at consulting firm Arthur D. Little, predicts that wills, home deeds, car titles, and passports could become NFTs. “Robust blockchain technology and real-life use cases for NFTs will come out the other side,” Khan said. “Many companies are starting, which will create practical applications of NFT.”

Within the media industry, companies are considering selling streaming subscriptions like NFTs or releasing albums that can be updated with new songs or videos after purchase. For example, the new decentralized streaming platform Rewarded TV provides access to premium content with NFTs instead of traditional advertising or subscriptions. The limited supply of NFTs will give viewers lifetime access as the site continues to add more movies and shows.

“As this technology becomes more accessible and pervasive… I think it will eventually overtake traditional media platforms,” said Robert Powers, chief growth strategist at Vivid Labs. “NFT technology has the potential to infiltrate everyday life through programmatic capabilities, allowing the creator to continuously share content with shoppers and create ongoing social interactions.”

And because virtually anyone can create an NFT, it’s also attractive to content creators looking to build a following. Many have produced NFTs from their art and photography, tweets, and videos. Creators can also sell NFTs from movie releases, event tickets, or turn other types of content into a digital asset.

NFTs are programmable assets, which means that their final use is up to us: the companies, the creators, and the consumers. For Mark Fidelman, founder of the crypto firm SmartBlocks, the next generation of NFTs will open the door to easier transactions, be it access to software or real estate investments.

“Real estate projects or commercial projects, like construction stocks, could be broken into NFTs,” Fidelman told TheWrap. “If you have a stake in a building, it is not easy to sell it. NFTs are easy transactions to handle, and it’s really easy to see who owns it with the blockchain ledger.”

Powers added that we have yet to unlock the potential of the blockchain. “The first iteration of NFT may be losing popularity,” he said, “but we have barely scratched the surface of what this technology can do.”