Since early June 2022, the total trading volume of NFTs has essentially come to a standstill, reflecting the hollowing out of the market. As traders evaporate, owners of blue-chip NFTs are now actively working to exit their positions. This downturn impacted the value and demand for these digital assets. As buyers became more cautious, sellers found it challenging to sell their NFTs at desirable prices. The decrease in market activity signaled a shift in investor sentiment, leading to a bear market for NFTs.
NFT Trading Volume on Ethereum ( data source: NFTScan)
NFTs have so much further to go. Without a large number of users buying and selling NFTs, the market will struggle to grow and remain relevant. As more people become aware of NFTs and start using them, we can expect to see an increase in the value and diversity of these unique digital assets. Therefore, it is crucial for the NFT market to have mass adoption in order to achieve long-term success.
There are several fundamental obstacles that the industry needs to overcome, as a whole, before NFTs' mass adoption can take place. With that in mind, let’s take a look at factors standing in the way of the mass adoption of NFTs.
Accessibility
First and foremost, there’s the issue of accessibility. As with the crypto and blockchain space in general, accessibility is a major roadblock to the mass adoption of NFTs. Quite simply, there’s a steep learning curve in regards to getting to grips with NFTs — and as it can result in losing money, a lot of people won’t be willing to make the climb.
For a start, even the very concept of an NFT can be a little tricky for the average person to wrap their head around. This means that stakeholders are going to have to invest in first-class educational resources to make creating, buying, storing, and selling NFTs as simple as possible.
Just as important, however, is making NFT marketplaces, wallets, and other tools as accessible as possible. Currently, NFT platforms and software are made by developers for other equally technical people — or at least it seems that way. Navigation on most NFT platforms isn’t as intuitive as it could be and instructions are usually filled with too much technical jargon.
Accessibility is one of the key things that need to be addressed if NFTs are to reach mass adoption.
NFTScan developer platform
Scalability
The issue of scalability hangs over the whole crypto industry like a dark cloud, so it will also play a role in preventing the widespread adoption of NFTs. At present, simply put blockchain technology just couldn’t handle the demand that would come with NFT mass adoption.
The best example is the Ethereum blockchain, on which the majority of NFTs are sold, which already has scalability problems, despite both the NFT and DeFi industries being in their infancy. The lack of scalability combined with the high demand results in slower transaction times and higher transaction, or ‘gas’, fees.
NFT Collections’ Gas volume (24h). Data source: NFTScan
This is especially a problem for potential NFT creators, such as digital artists and photographers, as to put an NFT up on an NFT marketplace, you’re required to pay a minting fee. At the moment, this can cost somewhere between $70 and $120, on average, but during peak times this has been known to skyrocket to as high as $200–300!
This is way too much of a barrier to entry for an aspiring NFT creator to test the waters and will scare away people that would have otherwise been successful — and the entire NFT industry will suffer as a result.
Questionable Real-life, Long-term Value
Another roadblock that NFTs could encounter on the road to mass adoption is a lack of evidence regarding their real-life, long-term value. Sure, NFTs have generated billions of dollars and, subsequently, digital artists and meme creators have become millionaires overnight, but we’re only talking about a very small group of people in such cases. As attention-grabbing as headlines about NFTs selling for millions of dollars maybe, as far as the general public is concerned, it’s just another case of someone getting rich off something they don’t fully understand.
While, on the other hand, there’s talk of NFTs being a huge part of the upcoming metaverse or potentially revolutionizing online identity verification, such projects are years away from being realized. And — who knows — maybe some other technology will come along that’s better suited to those applications than NFTs are.
For NFTs to achieve mass adoption, there needs to be a strong reason for them to actually be adopted by the masses.
Regulation
Although NFTs are subject to some regulation, namely, financial and consumer laws, there’s a distinct lack of regulation specifically made for NFTs — especially when it comes to copyright protection.
Unfortunately, at present, there’s little to stop someone from turning someone else’s art into NFT, claiming it, and profiting off it. Take a look at the story of someone trying to sell a fake Banksy NFT as evidence of this.This lack of regulation is a huge problem for both buyers and sellers, as someone that purchases a dodgy NFT could be unknowingly sued for copyright infringement.
Fortunately, as an industry grows, it attracts more attention and demands more regulation. This happened with eCommerce in the early days of the internet, it’s currently happening with the blockchain industry as a whole, and it needs to happen with NFTs as well for them to reach mass adoption.
Empowering NFT Market Growth: NFTScan’s Role
1. Bridging Diverse Ecosystems
The decentralized nature of blockchain technology has led to the proliferation of NFT ecosystems across various blockchains. However, this very decentralization has led to market fragmentation, making it challenging for enthusiasts to explore a diverse array of digital assets. NFTScan recognizes the importance of cohesive exploration and takes a multi-chain approach. By aggregating data insights from 16 blockchains, NFTScan offers users a unified platform to explore NFTs seamlessly across ecosystems. This unified approach streamlines research, promotes discovery, and fosters cross-chain interaction.
The NFT Explorer of 16 blockchains (Supported by NFTScan)
2. Enhance Transparency
As the NFT ecosystem evolves, the significance of overcoming adoption roadblocks cannot be overstated. NFTScan emerges as a pivotal player in this narrative. By providing real-time trading volumes, historical sales data, and market trends, NFTScan equips traders, collectors, and enthusiasts with critical information. This information empowers stakeholders to make informed decisions, thereby contributing to enhanced liquidity and a more robust NFT trading environment. NFTScan becomes a catalyst for transformative change. Its data-driven insights create a ripple effect, cascading into a landscape that is more accessible, transparent, and dynamic. The integration of NFTScan’s insights is instrumental in enabling NFTs to realize their full potential.
Collection Analysis (Data source: NFTScan)
3. Verifying the Imprint
Amidst the excitement surrounding NFTs, the issue of authenticity and provenance has emerged as a persistent concern. Buyers and collectors seek assurance that the NFTs they engage with are genuine and have a verifiable history. NFTScan steps into the spotlight with an unwavering commitment to transparency. Through meticulous tracking of transaction histories and ownership records, NFTScan creates a transparent trail that allows users to verify the authenticity of an NFT. By putting the power of verification in the hands of users, NFTScan builds trust and credibility in the NFT market.
Collections Analysis (Data source: NFTScan)
4. Decoding the Complex
The realm of NFTs often feels like a labyrinthine journey through blockchain intricacies, leaving newcomers perplexed. Navigating this digital landscape, with its intricate blockchain technology and nuanced ecosystem, can be daunting for those unfamiliar with its inner workings. The lack of accessible information and comprehensive education has emerged as a substantial roadblock, preventing many from fully embracing the NFT revolution. Enter NFTScan API, a beacon of clarity amidst the NFT complexity. Recognizing the challenges faced by newcomers, NFTScan has harnessed the power of data to create an accessible and informative gateway into the NFT world. Seamlessly integrated into the platform’s user-friendly interface, the NFTScan API serves as a key to unlocking the mysteries of NFTs.
Behind every NFT lies a treasure trove of data waiting to be unearthed. The NFTScan API becomes a bridge to this data, providing insights that not only enlighten but also guide. From tracking the history of NFT transactions to understanding the rarity of specific assets, the API transforms raw data into actionable insights. Imagine having the ability to analyze the historical performance of certain NFT collections, understand market trends, and make informed decisions about NFT acquisitions — all at your fingertips. NFTScan’s API empowers users to harness the power of data-driven decision-making, helping them traverse the NFT landscape with newfound clarity and purpose.
NFTScan API: https://docs.nftscan.com
NFTScan API Doc
In response to the intensifying cryptocurrency bear market, the blockchain industry is launching self-redemption campaigns. Public chains such as Ethereum, Decentralized Finance (DeFi), and Dapps are all exploring new directions. Meanwhile, NFTs, which were once the hot topic in 2021, have also entered a decline and are now trying to find new directions and motivations.
Although the recent stagnation in the NFT market is disappointing, we can still focus on identifying the fundamental problems and coming up with solutions to these issues. There is still a long way to go in realizing the true value and possibilities of NFTs.
NFTScan is the world’s largest NFT data infrastructure, including a professional NFT explorer and NFT developer platform, supporting the complete amount of NFT data for 15 blockchains including Ethereum, Solana, BNBChain, Arbitrum, Optimism, and other major networks, providing NFT API for developers on various blockchains.
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