A little more than a decade ago, consumers were met with the prospect of owning their very own desktop 3-D printer. They could design and print their own plastic objects! If a plastic piece of their toaster broke, they’d be able to print a new one and keep on using it! The utopian concept quickly fizzled as consumers realized they had little need or desire for such a wonder tool. On the bright side, the white-hot focus on the industry in the heyday of the 2010s brought investment and innovation. As a result, today, 3-D printers are revolutionizing home building, space exploration, healthcare, and many more industries.
As our foresight specialists have watched the rise of NFTs, we see history repeating itself. Are NFTs the next 3-D printer; the next item that sounds super cool and garners heavy investment but ultimately has little direct consumer utility and goes on to disrupt commercial industries? (NOTE: If you are wondering what we’re talking about, we recommend this primer on NFTs from The Verge.)
The Rise Of NFTs
NFTs have certainly captured public interest, enough so to achieve meme status. According to Variety, in July 2022:
- Nearly 6 in 10 people have heard of NFTs, up from 35% a year prior
- 13% of people own an NFT, up from 10% a year prior
Likewise, there is a lot of investment swirling around the NFT space. Along with investment in NFT marketplaces and blockchain-based Web3, Christie’s auction house has launched a venture fund for art tech. But will consumer interest in NFTs hold and justify these investments?
To understand the viability of this trend as a bona fide cultural shift among consumers, we gathered a group of Gen Z digital natives to learn what they think of NFTs. While many of their generational peers are making millions minting and trading NFTs, the Gen Zs we spoke with were very skeptical.
They acknowledge the hype is hard to ignore. As one 18-year-old guy tells us, “I have friends who would buy an NFT… They’re buying into the hype, with the dream the NFT skyrockets in value. It's a trendy and new thing so people want to get in early.” But ultimately, they don’t think NFTs are for them: “I think all this crypto and NFT stuff is all bogus. Things are worth what people would buy them for. There’s no tangible value for them, that’s why they vary in price like crazy,” noted one 19-year-old guy. An 18-year-old girl added, “I would never buy one. I think it's only for people who are risk takers who maybe want to be able to show off.”
Our findings are echoed in a recent study, which found that younger generations, including 82% of Gen Zs, are more likely than older generations to think NFTs are a scam.
The Future Of NFTs
With such skepticism, it looks unlikely that NFTs will escape the fate of the 3-D printer. NFTs may not become a common household item, but we predict they will have a huge (if largely unrecognized) impact on consumers lives. The technology is poised to disrupt any number of industries, and with such attention and investment in the space, consumers may feel the impact just a few years down the line. For example, financial services companies are watching the NFT space considering all the buying and selling of property (okay, and crypto, too). NFTs could streamline the processing and costs of the legal transfer of assets, such as titles and deeds. Healthcare companies are also paying attention with talk of the advent of NFT health records which could shift ownership of health data to individuals. Entertainment industries are facing a power disruption with the rise of blockchain-backed smart contracts that make it easier to track and distribute artists’ royalties, which could dramatically support the rise of fledgling artists.
However, while promising exciting innovation across all of these industries, NFTs face a significant stumbling block to their ubiquity. They aren’t very sustainable. The environmental cost of digital infrastructure, including storing and trading digital goods, is an issue of which consumers are increasingly aware. For younger generations who are particularly conscious of their carbon footprint, that may be one trade off they aren’t willing to make. To succeed, the value that NFTs provide will have to outweigh the cost to the environment.
Exploring NFT Impact
Is your brand interested in exploring NFTs, including how tokens might disrupt your industry and impact your relationship with your consumers? Our team can help with bespoke consultative and research engagements. Drop us a line at hello@empatixconsulting.com to learn more.
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