The Metaverse and NFT Boom Is About to Go Bust
Over a year ago, the landscape of the online world was altered forever when Beeple’s ‘Everydays — The First 5000 Days’ digital artwork sold at a first-of-its-kind auction for $69,346,250.
While digital art wasn’t a new concept, the medium had struggled to establish itself because the ease of duplication (right-click, copy) made it near-impossible to assign ownership and value. But the arrival of NFTs and blockchain technology finally enabled collectors and artists to verify the rightful owner and authenticity of digital artworks. In other words, no matter how many people choose to copy the digital item, there is only one true owner.
Beeple’s extraordinary sale was the ultimate test case — people would pay, and pay lots, for purely digital items — and it opened the floodgates to a whole new market, sparking an NFT frenzy. The biggest craze was JPEG images that could be used as social profile pictures. One of the more successful ventures was the Bored Ape Yacht Club, which tied its tokens to an exclusive membership club in an effort to make it more than just expensive pictures (some Apes have sold for over $3 million). Other projects, like Crypto Punks, have been equally successful, with the highest sale price over $20 million. The rest… well… most aren’t worth the words. Celebrities soon joined the fun, with many promoting (or trying to inflate the price of) NFTs they owned on late-night chat shows. Serial entrepreneurs like Gary Vaynerchuck promptly joined the party, with all the same talk of community and the same outcome of money, money, money.
Alongside the NFT boom was its counterpart, the Metaverse, which many believed (read: prayed) would be the digital playground to use these NFTs, whether through avatar skins, items, or interacting in exclusive online communities. Mark Zuckerberg saw an opportunity to lead the way, rebranded Facebook into Meta, and declared that “[the Metaverse] is just going to be a big part of the next chapter for the way that the internet evolves after the mobile internet.” In a recent earnings report, Meta revealed that the company had already blown $10 billion to pursue this dystopian dream and expected to burn through plenty more. Like Beeple, Meta put the…