“We are different from coins” NFT that distances itself from cryptocur…
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Non-Fungible Tokens (NFTs), which serve as proof of original digital content based on a blockchain network, are considered to be a deficit and inseparable relationship with virtual currency. However, as the price of virtual currency plummeted due to a series of bad news, such as the Terra Luna crisis and the bankruptcy of virtual currency exchange FTX, the NFT industry is showing a movement to distance itself from virtual currency.
Devin Fincher, CEO of OpenSea, the world's largest NFT exchange with over 35% of the NFT market share, told the Financial Times on the 29th of last month, "NFTs do not necessarily have to be displayed and traded only as cryptocurrencies as they are now." “There is no reason NFTs should not be denominated in US dollars,” he said. It implies that it will be possible to purchase NFTs with dollars. At present, when trading NFTs, the virtual currency Ethereum is used as the official currency.
Some exchanges are already using dollars rather than cryptocurrencies for NFT transactions. Coinbase, North America's largest virtual currency exchange, partnered with Mastercard in January last year and made it possible to buy NFTs with credit and debit cards. Nifty Gateway, an NFT exchange owned by the Winklevoss brothers, also made it possible to buy NFTs as a dollar-based payment method from March 2020.
The reason why the NFT industry is trying to break up with virtual currency is because the cold wave of the virtual currency market made the NFT market freeze. The monthly NFT trading volume at the time of opening reached $4.9 billion in January of last year, but in November, it plummeted to $253 million. As NFTs are traded as virtual currencies, their value and transaction volume also declined. In the end, Open Sea laid off 20% of its staff in July last year.
NFT market monthly transaction volume trend
For this reason, the NFT industry these days has set out to differentiate itself by emphasizing that “Unlike cryptocurrencies, which are only highly speculative, NFTs have various uses.” Beyond digital collectibles, it is said that it has a variety of uses, such as a unique profile picture (PFP) or digital ID card grafted onto Twitter, etc., avatars and real estate in the metaverse (3D virtual world), which is considered a next-generation platform, and new membership services or voting rights in the real world. will be. An example is the ‘Starbucks Odyssey’, a mileage point system in the form of NFTs launched by Starbucks on the 8th of last month. Ben Flomion, CMO (Chief Marketing Officer) of Deeps, an NFT marketplace company, said, “As consumers become more aware of the usefulness of NFTs in the real and digital world, overall sentiment is improving.”
The NFT industry's move to decoin is also an example that reveals how many limitations virtual currency has as a payment method. To purchase NFTs with virtual currency, you must create an electronic wallet, purchase virtual currency, and then link the wallet and exchange to pay fees for using the expensive blockchain network. In this process, slow processing speed and cumbersome procedures were pointed out as factors that made them give up entering the NFT market. In a survey conducted by Mastercard in June of last year with 35,040 people in 40 countries, about half said they needed more flexibility to purchase NFTs with a credit or debit card.
NFT-based digital virtual shoes 'Monster Shoes', which LG Electronics introduced at CES 2023 held in Las Vegas on the 5th. Customers can collect 5,500 uniquely designed NFT shoes, and manage and enjoy real shoes and NFT shoes together through the LG ThinQ app. Recently, more and more global companies are using NFTs for marketing to provide customers with a unique experience.
