The inventor of the non-fungible token says he has spent the last two years lurching “from excitement to dread.” Although artist Kevin McCoy says he is “gratified” to see people engaging with what started as his “own private thought experiment,” he claims to be terrified by the gold rush it inspired. In March 2021 during the early throes of NFT mania a single token, tied to an artwork called Everydays: The First 5000 Days, by digital artist Beeple, sold for almost $70 million.

When McCoy and his partner, entrepreneur Anil Dash, pitched the idea for a unique crypto-like token that demonstrated ownership of digital goods back in 2014, they had some sense it was an “important idea.” The intention was to create a mechanism for tracing the provenance of digital works and give small artists a new way to make money. But McCoy says he never imagined NFTs would become a conduit for financial speculation.

Over the course of 2021, beginning in earnest with the landmark Beeple sale, a frenzy of buying and selling drove the prices of NFTs sky high. By the end of the year, the average price of an NFT had risen beyond $3,000, despite a tsunami of new tokens diluting the market, while the cheapest NFTs from the most vaunted collections were selling for $200,000 a piece

But all economic bubbles must eventually burst, and the NFT bubble has done so in spectacular fashion. In January 2022, $17 billion worth of NFTs changed hands, but by November that figure had fallen to $400 million, a collapse of 97 percent. Precisely what triggered the crash is unclear, but the fall in demand—catalyzed by a slump in the cryptocurrency market—has wiped almost $9 billion from the combined value of all NFTs in circulation.

Tasked with picking through the wreckage, members of the NFT industry are treating the collapse as something of a cleansing event. “I’m a strong believer that you don’t need the hype,” says Shiva Rajarman, VP of product at OpenSea, the world’s largest NFT marketplace. Although the publicity was good for business, he says it brought people to NFTs for the wrong reasons—to make a quick buck—and distracted from the utility of the technology.

With regulators now circling, and skeptics basking in the schadenfreude, the NFT is at a crossroads. The consensus among industry insiders is that, for the technology to achieve widespread adoption and continued cultural relevance, it will need to be recast in a different light.

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