More global consumers are drawn to the blockchain technology and cryptocurrencies due to the popularity of non-fungible tokens (NFTs), whose trading volumes have increased significantly, says a report titled 'New Value Crypto Trends in Business and Beyond-2022, published by published by enterprise crypto solutions provider Ripple.
According to the report, people in the "Asia Pacific (APAC) and Latin America (LATAM) are more optimistic about the value of blockchain and its tokens.
While the Middle East and Africa (MEA) and North America were somewhat less enthusiastic, Europe was the most conservative.
However, the report said that the consumer experience wasn't smooth due to Web2.0 infrastructure and design issues.
Ripple surveyed over 800 people in 22 countries in the Asia-Pacific (APAC), Latin America (LATAM), North America, Europe, and the Middle East and Africa (MEA) regions.
"NFTs offer an opportunity to crypto holders to support artists and communities they connect with. As people spend more time online, these assets have high usability whether it's a custom profile picture, a community membership token, or simply art that collectors will want to display and hold over extended periods," said Poorvi Sachar, Head, operations, Tezos India, an organisation that empowers Tezos blockchain ecosystem in India.
According to Ramkumar Subramaniam, the CEO and co-founder of Guardianlink, an NFT marketplace, "Environment-friendly blockchains will be the order of the future. But it should not be forgotten that the dependability of the blockchain was established by big players. We believe that the extent of the adoption of blockchain will also help in proportionally increasing the adoption of green blockchains as well. Blockchain and its manifestations like NFTs becoming popular in highly populous countries will aid in this transformation."
Here are some interesting highlights about consumers' feedback on NFTs, metaverse, the central bank digital currency (CBDC), etc.
Consumer Interests In NFTs Higher in APAC Region
The report noted that "respondents in APAC were up to three times more likely than respondents in other regions to say they would want to buy an NFT to commemorate an important moment. And they were twice as likely to say they would buy an NFT to show their appreciation for an artist, pop figure, or brand."
This "suggests that the emotional attachment to creators and/or moments will be an even bigger driver of NFT interest in APAC than in other parts of the world."
NFT Key Technology In Metaverse
The report finds that NFTs are widely used and "key technology for powering ownership in what is called the metaverse." Metaverse is a 3D animated virtual world that offers people an immersive social, gaming, and entertainment experience.
The report further notes that whether virtual land, a car or an NBA star's virtual sneakers, "NFTs represent ownership of unique forms of value in the metaverse." And people can "do things like trade, game, showcase, collateralize, and lend" with this value.
Hence, the trend shows that "NFTs in metaverse are adding different values to people for varied activities," and that's why it is a crucial technology.
Piyush Gupta, co-founder of VOSMOS, a metaverse website and President of Kestone, a metaverse marketing company, said that NFTs will have to evolve to attract a larger audience and that’s only possible "once it creates value that has a higher probability of appreciating, rather than depreciating, in the future. I also believe that once Metaverse is accepted and used by the masses, NFTs can play a big role in actually creating value. They can become an exchange medium for actual goods/art etc. to be purchased. Something like the barter system that used to exist in old times."
Functional Interests Score Over Emotional Reasons
Globally, consumers are "more interested in what we might call the functional benefits of NFTs as opposed to the more emotional benefits."
Functional reasons to buy an NFT include trading, unique experiences, and appreciation in value. Emotional reasons include buying to show appreciation for any specific pop culture, artists, and brand.
"50 per cent of respondents said they would only buy an NFT for a functional reason. This is compared with 45 per cent of respondents saying they would buy an NFT for an emotional reason," according to the report.
Music Is Most Popular NFT Genre
The report finds that 55 per cent of consumers would be interested in buying music-themed NFTs, followed by collectibles at 43 and gaming at 41 per cent. Sports and Arts came in fourth and fifth place at 39 per cent and 33 per cent favouring them, respectively.
"It will be interesting to see in the coming years if and how the metaverse changes consumers' interest levels across these categories and perhaps introduces new categories," says the report.
According to Abhay Aggarwal, founder and CEO of Colexion, an NFT marketplace, "The growing popularity of music NFTs is two-fold, it provides more power to the musician and avails an easy stream of income by eliminating record labels and others who charge hefty fees, and brings in ownership of new music directly to the fans, who can further trade the NFTs as and when they wish. Music NFTs thus create a qualitative value for the musicians creating the art, and the fans awaiting its release, becoming the top consumer choice in the NFT marketplace."
Trend Of Rising NFT Trade Volume
Ripple noted that the trading volume in NFTs increased by a whopping 38,000 per cent between 2020 and 2021, and over $10 billion worth of NFTs were sold in Q3 2021 alone.
It also notes that "artists, musicians, movie stars, athletes, brands, and more are seeing NFTs as a new way of engaging their audiences with something innovative, unique, and valuable."
Opinion About Current NFT Technology
According to the report, most respondents believe that NFTs have a lot of scope for innovation. The NFT technology at its core is not new but an "age-old human desire to own things that connect us to our interests, passions, and memories. The core technology is proven; now, the industry needs to make it easier for consumers to participate."
"Considering how the blockchain has spawned into multiple avenues of advantages including NFTs, gaming, record-keeping, and event ticketing, it would now be a good time for exploring economically and environmentally viable options," added Subramaniam.
"Currently, NFT in the Metaverse is only for a very few. One sees more gamification rather than actual value in it. Yes, you can own something which you are passionate about, but I don’t see that creating any commercial value in a long run," added Gupta.
According to the report, new "approaches, including decentralised identity, will help solve some key issues around trust, security, and privacy for consumers, while making it easier to verify, buy, sell, store, transfer, show, and use NFTs."
