Are NFTs here to stay and what does the future of NFTs have in store for us? NFTs have seen a massive boom over the last few years, leading many people to ask what their future holds. Due to numerous rug pulls, scams, and overinflated value, NFTs have had a contentious rise to popularity. Still, just because there are bad actors in the NFT ecosystem doesn’t mean they aren’t a promising technology. To understand the future of NFTs, you first have to understand their journey so far, their proposed utility, and their possibilities.

NFTs so far

Colored Coins are often considered to be the first NFTs. Colored Coins were first released in 2012 and represent physical assets like coupons, real estate, digital collectibles, equity, and more. Although many people point to Colored Coins as the first NFTs, they aren’t NFTs literally.

Quantum by Kevin Mccoy is considered by many to be the first real NFT. The work was first minted in 2014 and was sold for $1.47m at Sotheby’s “Natively Digital” auction in June 2021.

Two of the most notable early crypto projects are CryptoPunks and CryptoKitties. CryptoPunks is a series of 10,000 unique pixelated characters with specific “traits” that contribute to their rarity. Traits are now a standard piece of nearly every popular NFT series. They often involve hats, colors, accessories, and other features that appear a specific number of times within a given series. NFTs that have less-common traits are often regarded as more valuable.

CryptoKitties is perhaps the first NFT series to introduce gamified elements to their project. Buyers were able to breed new kitties by combining kitties they’ve purchased, giving users something to do with their assets besides simply owning or selling the NFT.

Many naysayers consider NFTs scams, and it is hard to say they don’t have a good reason for feeling this way. There have been countless projects that have popped up and disappeared in a month or less, leaving buyers with worthless digital assets. Still, the technology is relatively new, and as people learn how to distinguish legitimate projects from potential scams, we’ll likely see fewer bad actors in the ecosystem.

What’s the point in NFTs?

NFTs are primarily used to represent a specific digital or physical asset ownership. Gaming is a prime use case for NFTs, as many games allow users to purchase skins, outfits, and weapons for their characters. By utilizing NFTs in a gaming environment, developers can allow players to own their skins and weapons outside of the actual game.

In essence, NFTs can be considered a simple purchase receipt. You could even use NFTs the same way you’d use a paper receipt at a store. For example, a clothing store could easily mint a receipt every time they sell a piece of clothing, in which case your receipt of purchase would be safely stored on the blockchain and easily accessible at any of their locations.

What might the future hold for NFTs?

The future of NFTs is largely dependent on where you live. The SEC is growing concerned that digital assets are often unregulated securities token offerings. It is uncertain what will happen, but the SEC has subpoenaed numerous NFT projects in recent weeks. These subpoenas could lead to fines, lawsuits, and a massive change in the future of NFTs in the United States.

Still, many countries have yet to regulate NFTs, meaning creators can express their creativity freely. Game developers are showing a growing interest in NFTs, and we could eventually see gaming NFTs that can be used in multiple games. For example, a developer could design a video game engine that allows people to use NFT-based skins, weapons, and items in any game created using that engine.

We’ll likely continue to see more controversy surrounding NFTs as well as more developments in the NFT art, gaming, and investing sectors. Additionally, major retailers are beginning to realize the utility NFTs offer. For example, Walmart is rumored to be partnering with Hedera to use their blockchain for NFT-based coupon offerings.