95% of NFTs now totally worthless, say researchers
- Reference: 1695315605
- News link: https://www.theregister.co.uk/2023/09/21/95_percent_nfts_worthless/
- Source link:
For those who don't recall, [1]NFTs are entries on a blockchain, typically the Ethereum blockchain, that represent ownership of assets – usually a digital asset like an image file or in-game item, but NFTs could also be tied to physical items.
Back in their 2021-22 heyday, collectors were paying [2]millions for NFTs, but crypto gambling website dappGambl now [3]says that most are worthless.
[4]
After looking at 73,257 NFT collections (a collection can contain any number of NFTs that can each be bought and sold) based on data from CoinMarketCap and NFTScan, dappGambl said it determined that 69,795 of those collections have a market cap of 0 Ether.
[5]
[6]
"This statistic effectively means that 95 percent of people holding NFT collections are currently holding onto worthless investments," dappGambl said in its report. "Having looked into those figures, we would estimate that 95 percent to include over 23 million people whose investments are now worthless."
Gigantic supply, meet shrinking demand
While millions may be out the value of their NFT purchase, there are still a ton of NFTs that have gone unsold, which is a problem too. According to dappGambl's analysis, only 21 percent of the NFT collections it examined were fully spoken for, which it said ultimately means four out of every five NFTs remain unsold.
"It is a stark reminder that, while the NFT space has introduced a revolutionary new model for ownership and the monetization of digital assets, it remains a highly speculative and volatile market," the researchers said.
[7]British Prime Minister Sunak's plans for UK NFT on ice
[8]Token prison sentence for first convicted NFT insider trader
[9]Stoner Cats NFT project declawed for being an unregistered security
[10]Meta winds down NFTs but will continue token efforts
Value, too, remains an issue, dappGambl found. Eighteen percent of the top NFT collections identified by CoinMarketCap have a floor price of zero, "indicating that a significant portion of even the most prominent collections are struggling to maintain demand," dappGambl said.
Additionally, 41 percent of NFTs are priced between $5 and $100, and less than 1 percent are valued above $6,000, all of which points to genuine value in the NFT market being hard to find, said dappGambl. That, in turn, led researchers to conclude that the situation could be even more bleak than the data suggests.
One project, said the researchers, had a floor price of more than $13 million, but all-time sales of just $18. "It becomes clear that a significant portion of the NFT market is characterized by speculative and hopeful pricing strategies that are far removed from the actual trading history of these assets," dappGambl said.
[11]
In other words, the bottom on the NFT market has well and truly fallen out.
Meanwhile, NFT creators keep burning that carbon
Cryptocurrencies and their blockchain-adjacent NFT neighbors require computers, and computers require power. If we're going to burn all this energy on cryptocurrencies and NFTs, they'd better be [12]worth the power being used to create them and power their blockchains, but that doesn't appear to be the case – especially as the NFT market collapses.
NFTs, being registered on a blockchain and not mined mathematically like currencies, don't expend energy in the same way, but are still responsible for a lot of carbon being spilled into the atmosphere to mint them onto blockchains and power their continued existence.
In addition to the 73,000 collections of NFTs that dappGambl examined for its report, it identified an additional 195,699 NFT collections "with no apparent owners or market share."
The energy required to mint the NFTs included in those collections, dappGambl claims, is equivalent to 27,789,258kWh of energy, or approximately 16,243 metric tons of CO 2 . Figures for the energy cost to mint a single NFT are widely available online. dappGambl said that equates to the yearly energy emissions of 2,048 US homes, 3,531 US automobiles, or 4,061 passengers flying from London, UK, to Wellington, NZ, all being burned to create NFT collections that no one buys.
[13]
The solution proposed by dappGambl is to only mint NFTs with utility, like in-game assets, token-gated access to events, or links to physical products. Or – bear with me here – we can decide this entire NFT fiasco was a bad idea that didn't actually create anything of value. That's what the numbers suggest, after all. ®
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[1] https://www.theregister.com/2021/05/04/what_is_nft/
[2] https://www.theregister.com/2021/03/12/beeple_nft_sold/
[3] https://dappgambl.com/nfts/dead-nfts/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZQy9BBIqrvBbRSrG233EOgAAABc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQy9BBIqrvBbRSrG233EOgAAABc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[7] https://www.theregister.com/2023/03/28/sunaks_plans_for_uk_nft/
[8] https://www.theregister.com/2023/08/23/nft_insider_trading_prison/
[9] https://www.theregister.com/2023/09/14/stoner_cats_nft_sec/
[10] https://www.theregister.com/2023/03/14/meta_/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQy9BBIqrvBbRSrG233EOgAAABc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2022/09/09/crypto_mining_regulations_us/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQy9BBIqrvBbRSrG233EOgAAABc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
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oh wow, such a shock.
That anyone was dim enough to buy them.
Really.
You'd have to be a moron or a scammer to have been involved in buying and selling receipts for a number on a computer that was somhow linked to crappy, childlike, crayon art.
Shocked
Nobody saw this coming. I am flabbergasted. Clearly NFTs are just better than fiat and are so much more fungible. My friend Brad sold me an nft of an adorable Roger smoking crack for $20k and now you say it’s worthless? Whatever.
Re: Shocked
You should have gone for Panda Roger, that one is going to hold its value!
“Now”?
“Now” would imply that things were different in the past.
And the percentage seems low to me…
Re: “Now”?
As with many things, the "value" existed because other people believed there was value, and nothing else.
All it needed was for everyone to realise the emperor actually was naked (to mix metaphors), but unfortunately it took longer than it should have.
Re: “Now”?
Curious, how "whose investments are now worthless" sounds _so_ much better than "who lost their bet".
Isn't there an old proverb about 'fools and money'?
All those who 'invested' in NFTs will now realise they were conned into spending money on basically a GIF file, but fair do's to those who managed to sell some fairly rudimentary art for large amounts of money to gullible people at the NFT high. As long as they were sensible enough to cash out any payment they received for the sale of NFTs to real money and didn't decide to keep it as crypto.
Not everyone was scammed. Metallica Trump used hers for money laundering.
> they were conned into spending money on basically a GIF file
Nope, you've missed the subtle distinction that all the value of NFTs relies upon.
They didn't spend money on a GIF, the GIF was free for everyone to enjoy[1].
What they bought was a note on a blockchain (hopefully, that blockchain is still being mined and hasn't just evaporated) and that note said they now owned this copy of a URL - i.e. they literally owned one copy of a sequence of characters that starts "http" - and the fact that, at the specific point in time when the note was made, the claim that said URL leads to a copy of the GIF in question. Where that same URL leads to now, or tomorrow, is one of the great imponderables[2]
The value is all in understanding this chain of references and how its very ephemeral nature highlights the essence of Man's struggle against Nature. Or something like that. Maybe it was Man's Inhumanity Against Man[3]?
[1] enjoyment is not guaranteed; the aesthetic appeal of a garish cartoon of a monkey may go down as well as - actually, no, it just goes down.
[2] or it is just a 404 - damn, I should have sold NFTs to a 404 page and saved the hosting fees for the GIF! Is it too late?
[3] if the NFT mongers had made that claim, they could have actually had a case for charging money for the things: "the art is in the process by which we ripped people off, it is a performance piece".
LMAO BROS
Your AI killed your Monkeys.
We Need a Simpsons "Nelson" Icon
Ha-Ha!
I'm only surprised by the implication that 5% are still worth something.
Indeed. Certainly exceeded my expectations!
Reckon it is the pictures of monkeys or frogs that make up that 5%? Or perhaps even those coordinates (virtual land?) in ratty Unity3D games.
Yes. I hope my nautical ennui primates are the ones still rapidly increasing in value. Maybe I should cash out now and put my money in Theranos AI Robotaxis inc?
Purpose
For crypto investors NFT's fulfilled a vital purpose - for a while at least. They provided the liquidity to the market that investors needed to sell their crypto currency assets. The whole thing is effectively a 'find an even bigger idiot' scam, and the people that are left holding this shit at the end have really lost out.
I have an NFT of the world's smallest violin to sell you.
SHUT UP AND TAKE MY MONEY!!!!!
First rule of poker
If you can't spot the mug sitting at your table then it's probably you. In a semi-fungible sort of way.
Re: Tell your friends
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That sounds like a recipe for EVEN MORE ADS!
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Yes, some of us would subscribe for ad free bliss.
Re: Tell your friends
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Hahaha
hahaha
Take the Money and Run.
Like all good cons, you hype, you sell to mugs, and you leave quietly by the back door.
NFT = Not F-ing There
Still my favorite article on NFTs, and it has aged well: https://www.theregister.com/2022/04/16/something_for_the_weekend/
Well, an asset with a NFT assigned to it is still the same image or object, so the actual difference in value between other copies is arbitrary. It wouldn't keep its exclusive value for long because there's no reason to keep caring.
I laughed at the concept, because I couldn't give a fuck.
Revolutionary new model?
"the NFT space has introduced a revolutionary new model for ownership and the monetization of digital assets"
With quotes like that, dappGambl's are clearly part of the cult of bitcoin, so for them to say their favourite parrot is dead, must mean it is indeed very very dead.
crypto gambling website dappGambl now says that most are worthless.
Well who could doubt the authority of a website whose homepage screams "Your Crypto Gambling Made Easy" at you? Except of course that they're right, although it's taken them a lot more time than those of us who instantly said what a load of worthless bullshit the whole idea was. I guess the idea is to say "don't waste your money on NFTs, they're worthless! Come and gamble it with us and win some other kind of digital token which definitely isn't also worthless no siree!".
I doubt they'll be researching and publishing how much the mugs who hand them money are making on average.
a revolutionary new model for ownership
Weird concept of "ownership".
It is sad, in that there is a very real need for digital art to be saleable, so that artists who put work into it can get money.
Unfortunately Midjourney more than NFT scams, is probably going to destroy any perception that digital art took actual creative time and effort, and has real monetary value.
95% of NFTs now totally worthless
Along with 87% of all statistics.
Though I never did "get" why/how they were ever going to be worth anything in the long-term (NFTs, that is).