NFTS double the craziness with the Phygital trend

It would be an understatement say that crypto is going through a difficult time. Since Bitcoin reached its all-time high of almost $ 70,000 last year, it has lost 70 percent of its value. The entire market has shrunk by trillion dollars.

When I traveled to the Next Web (TNW) conference of the FT to Amsterdam last month, a meeting of technology leaders, developers and investors, I was curious about the mood of the participants. I wondered how many would work for crypto; How many hardcore believers remained to preach to preach to the word "Hold" using acronyms like "Hodl" (the word comes from the wrong spelling of the word ", but" stick to my love life "). To my surprise, people were anything but shy to talk about the industry. If at all, there was renewed enthusiasm to announce the long -term value of crypto. As the saying says, it is in the middle of a downturn "Now time to build".

The topic of the day was not fungal tokens (NFTS), digital collectibles, whose buyers receive ownership certificates on the blockchain. They are usually bought with cryptocurrency. Like the wider community, their greatest believers remained confident. Perhaps because the tokens are associated with the optimistic idea of the web3 internet, which is supposedly driven by forces of social connection and decentralization. But also because the sales of NFTs were almost $ 41 billion in the past year and triggered a gold rush, which urged companies and artists onto the market that hurried to publish their own versions.

Some discussion participants evangelized via an NFT utopia in which the tokens would close the gap between our online and real life. "I hate this word," said Sandra Ro, CEO of the Global Blockchain Business Council, "but I'll say it: Phygital."

"Phygital", a Portmanteau from "physical" and "digital", was shaped by the advertising specialist Chris Weil more than a decade ago to describe what he called the "immense opportunities for brands" to include consumers in both worlds. In the meantime, the term has developed a life of its own. The fashion industry organized "Phygitale" shows during the pandemic, while the word is also used to describe a generation that grew up and at the same time inhabited both the physical and digital world.

RO’s use of "Phygital" referred to a kind of NFT, which partially aimed at clearing up skepticism in relation to their benefits in the real world. In addition to digital asset, a phygital gives the buyer access to something real-let's say, a real designer T-shirt that can also wear their avatar in a meta-verses.

phigital is also the name of a marketplace for 3D nfts that will soon start, although at first they will only be digital. I asked Julian Picaza, a product manager at Smart MfG, the Phigital, whether he is worried about the future of NFTs given the crypto crash. "Not in the least," he replied. Amy Wu, who heads the FTX Ventures risk capital company, was more careful: "We are here in a long cycle. We may not see mainstream acceptance in a few years."

Some uses of NFTs such as sport have gained dynamics. But when the cryptocurrencies decreased, the sales of the tokens have also broken in. The monthly trading volume of OpenSea, the largest NFT marketplace, fell by around 85 percent in the first half of this year.

Many people at TNW were obviously happy to be there in real life this year. When I went, I wondered if this could be an indication of why despite the NFT evangelization, the promise to own a piece of the digital world does not seem so convincing outside of the crypto bubble.

Scott Chipolina is the digital assets correspondent of the FT

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