The Wild Ride of NFTs

Unless you were living under a rock, it was impossible to avoid the NFT craze that swept through the worlds of art, tech, and finance in 2021. I have to admit, I never really got into the whole NFT thing myself. But the sheer craziness of it all was too fascinating to ignore. So I decided to mint my own NFT, just to say I did it. More on that later, but first, let's dive into the wild and wacky story of the rise and fall of the non-fungible token.

The NFT Boom

It all started with the $69 million sale of digital artist Beeple's collage at Christie's auction house in March 2021. This was the moment NFTs exploded into the mainstream consciousness. Suddenly, these unique digital assets recorded on the blockchain were the talk of the town.

Over the next few months, the NFT market went absolutely bonkers. Trading volumes skyrocketed from millions to billions of dollars per month. Celebrities like Snoop Dogg, Paris Hilton and Jimmy Fallon boasted about buying NFTs of cartoon apes and punk avatars. Even brands like Adidas and McDonald's were mulling NFT projects. It seemed like everyone and their grandma was trying to get a piece of the action.

The allure of NFTs was multifaceted. For artists, they provided a new way to monetize digital creations. Smart contracts allowed creators to collect royalties on secondary sales, something not possible with physical art. For speculators, NFTs were the shiny new asset class, with prices only going up. Exclusivity was a big factor too. Buying into NFT collections like the Bored Ape Yacht Club was like joining an elite social club.

Of course, there were skeptics who saw NFTs as a speculative bubble. How could a JPEG really be worth millions? But in the heat of the moment, the FOMO was real. Environmental concerns about the energy usage of blockchain technology were also largely brushed aside. When there's a gold rush, who has time to worry about the environmental impact of mining?

My NFT Adventure

Amidst all this hysteria, I got curious. What was it actually like to create an NFT? I’ve dabbled in digital art, I have some of my vectors right here on the site in the Design section, so I figured I could whip something up in Photoshop or Illustrator. So I made a goofy replica of my old logo with the tongue falling out of the mouth, added some trippy colors and shapes, and voila! My masterpiece was ready.

I used OpenSea, the largest NFT marketplace, to mint my creation on the Ethereum blockchain. The process was surprisingly easy, though I did have to pay some pesky "gas fees" in ETH. And just like that, I was the proud owner of my very own NFT. I listed it for sale at the bargain price of 0.5 ETH (about $1000 at the time). And then I waited for the offers to roll in.

Spoiler alert: the offers did not roll in. My NFT sat there, sad and lonely, with zero bids. Turns out I didn't have quite the same clout as Beeple in the NFT world. Oh well, it was still cool to be able to say "Why yes, I do own an NFT." Even if that NFT was essentially worthless.

The NFT Bust

As it turns out, my NFT wasn't the only one gathering digital dust. By late 2021, there were signs that the NFT mania was losing steam. Month-over-month sales growth slowed after the dizzying surge earlier in the year. Scams and hacks proliferated in the unregulated "Wild West" of NFTs. The crypto market wobbled as interest rates rose and risk appetites waned.

Then came the big crypto crash of 2022. The implosion of major projects like Terra/Luna and the FTX exchange rocked the entire ecosystem. Bitcoin and Ethereum plummeted in value, erasing trillions in paper wealth. Unsurprisingly, speculative assets like NFTs were hit especially hard in the downturn.

Weekly NFT sales cratered from a peak of $2 billion to under $100 million by mid-2023. Even blue chip collections like the Bored Apes saw prices tumble 80-90% from the highs. The vast majority of NFTs minted during the bubble were now essentially worthless. Turns out my pic was in good company after all.

Google searches for NFTs fell off a cliff as the hype evaporated. Celebrity NFT shills went radio silent, no longer eager to flaunt their digital apes and punks. The industry was left to lick its wounds and ponder what went wrong. Was it all just a case of tulip mania for the digital age?

The Future of NFTs

So where do NFTs go from here? The technology itself isn't going away. NFTs do have legitimate use cases beyond speculative collectibles, like ticketing, gaming items, and proof of ownership for physical assets. The ability to verify digital ownership and enable creators to monetize their work is genuinely valuable.

But the era of easy money and skyrocketing valuations for NFT art is likely over. The market will need to mature and find sustainable use cases and valuation models. We're already seeing a "flight to quality" as collectors focus on top-tier, blue chip NFTs. Hype and celebrity endorsements can only carry things so far.

As for my little NFT, it's still floating out there in the ether(eum). Maybe one day a discerning collector will snap it up for 0.5 ETH. I will not add it here, because I want it to remain a mystery. More likely, it will remain an amusing relic of a strange moment in internet history. And that's okay. Because if there's one thing the NFT craze taught us, it's that value is in the eye of the beholder. One person's masterpiece is another's worthless JPEG.

So while I never made it big in the NFT game, I'm still glad I took the ride. It was a fascinating peek into a new frontier of digital ownership, with all the excitement and excess that comes with it. Will NFTs change the world like the early believers promised? Only time will tell. But one thing's for sure - it was one hell of a wild ride while it lasted.