NFTs will have wide applications once hype settles

Significance

Yet NFTs divide opinion over whether they are a bubble waiting to burst or will redefine ownership of digital assets and become a core element of the metaverse. The two outcomes are not mutually exclusive.

Impacts

• Digitisation will increase the need to replicate physical properties such as scarcity, uniqueness and proof of ownership of digital assets.
• An NFT's value is based on what a buyer is willing to pay for it, making it a speculative alternative asset class for investors.
• NFTs mostly require a cryptocurrency to purchase, thus tying their value to another volatile asset.