Is NFT Déjà vu for 3D TV and Its Heydays?

By Lim In-kyu, a CEO of LVC Co., Ltd.

The rise of the NFT (Non-Fungible Token) has turbo-charged the world of blockchain, turning it into a major social phenomenon. But, for most people, it is still a strange concept and few can define what NFT is or explain why it has so much potential. How big might the NFT market grow? What dangers might prevent this tech from achieving mainstream acceptance? And is it the real deal, or just a flash in the pan?

I think a very useful comparison for understanding NFTs is the rise of 3D television, a little over a decade ago. There had been a few attempts over the years to launch 3D TVs, but things really got serious after 2009, with the release of the incredibly popular 3D-movie Avatar by director James Cameron. Avatar became the most successful movie of all time, and home appliance manufacturers all over the world thought its release on DVD would spur major demand for the technology, so they began to produce 3D TVs. In addition, Nintendo started offering 3D technology on their flagship portable video game console.

If 2009 was the first year of the 3D home video business, 2021 could be considered the foundation of the NFT, the year it started to reveal its strong potential. One blockchain and crypt statistics company, The Block, found four of the five major NFT services (Axie Infinity, CryptoPunks, NBA TopShot, and Sorare, but not Crypto Kitties) were actively trading. So far in 2021, there have been many big success stories involving NFT. Tim Berners-Lee, the creator of the World Wide Web, sold an NFT version of the WWW source code from the early 1990s for $5.4 million. And, in March, the artist Mike Winkelmann — better known as Beeple — sold an NFT of one of his artworks for $69 million.

However, the reality of the NFT market is not hundred percent positive. Trading volumes and the number of users has already started to decline, even though NFT tech was introduced less than a year ago. This downturn could be due to a general slump in crypto assets, and overall NFT market volume faced a dip by the time Beeple’s painting was sold. Since that huge sale, newer NFTs haven’t been considered unique or original enough to fetch the same kind of prices. Quartz magazine published a provocative article on June 11, 2021 titled “The NFT boom has gone bust — for now”.

Back in 2009, 3D TVs manufacturers didn’t know it yet, but it turned out that demand for 3D TVs was already at a peak. The technology just didn’t sell, and by 2017 most companies had stopped making them. There were many reasons for this, but the biggest is that consumers voted with their wallets, and it turned out that what they really wanted was higher resolutions (4K) and HDR.

Today, a lot of people can barely remember there was a 3D TV period. They’ve forgotten the massive advertising campaigns and the flooded market. It wasn’t that long ago, but people forget quickly.

Which makes some people wonder: Are NFTs the next 3D TV, overhyped and destined to flame out?

I think the most important thing to think about, when evaluating how likely a hot trend is to become part of daily life, is practicality. Could 3D TV been more successful if people didn’t have to wear those big, uncomfortable glasses? What if 3D content could have been watched without an expensive playing device? What if visual improvements like HDR had been applied to 3D? If the technology has been implemented in a more practical manner, maybe today we’d be watching sports, blockbuster dramas, and movies on 3D TVs.

This is an important lesson we need to learn. NFTs at this stage involve a fairly inconvenient user experience, with new NFT markets localized for each country and local regulations. This means that each NFT market is designed differently and the various blockchain wallets tend to have completely different policies. When you sell your NFT item, you must send the funds to another crypto-asset exchange to convert the money back into a legal currency and then exchange from there again. This leads to large fees for each transaction and process — plus, for Ethereum-based trading, you also have to consider the huge amount of electricity usage. So, given all these problems, is there a case for NFT optimism?

Well, imagine these scenarios. Imagine there’s an artwork by a famous cartoonist and everyone knows about it. What about a rare, powerful item from a popular video game that can be turned into an NFT and made available for trading in the game? Imagine there’s an NFT market asking for less input but with more output per post than Instagram. Imagine digital information that has never known physical form but you can put value on it and buy and sell it. Imagine a world where you can buy NFT items with only a few clicks and save them on your hard drive or in your cloud, just like regular online shopping and express shipping.

If content options flourish and the market operations are free and convenient environment, big businesses will increasingly grow comfortable with NFT, creating a bigger pool of NFT items for the public to trade freely.

LINE released a beta version of the NFT market in Japan on June 30 that is integrated with LINE BITMAX Wallet and uses its own crypto asset (LINK) as a payment method. The LINE Blockchain Team is leading the way in popularizing NFT and improving the user experience so that more companies will adopt this innovative technology, helping to make NFT more fun and accessible for all.

Source: The Korea Economic Daily (Hankyung) Koala Newsletter 

Original Column: https://www.hankyung.com/economy/article/202107058273i