NFTs will eventually be used by the government, which will mark the 'final stage' of adoption for a market that just had a monster August, one expert says
- NFTs have had a banner month in August. Experts see more growth ahead.
- The final stage of adoption for NFTs is government adoption, said one expert.
- Incorporating NFTs into traditional financial assets could also be an indicator of going mainstream, said another.
Non-fungible tokens had a banner month in August, with sales volume rising to record highs.
But even with massive growth, the space is still in "very early stages," Lennix Lai, director of financial
Lai said the best use case for NFTs would be to seamlessly integrate into the real world, not just exist in digital form.
"I think if you really want to make something impactful for the real world - actually bring crypto mainstream - you need NFTs," Lai told Insider. "I think the final state would be government adoption."
Lai envisions a world where people's personal information from social security numbers to COVID-19 vaccine cards are safely stored on the blockchain as unique and immutable pieces of data But Lai clarified that the industry needs a "lot more innovation."
"If NFTs are only restricted to collectibles, the future is not that exciting," Lai said.
Storage is also a problem. Some investors who have purchased NFTs in certain platforms in the past have had issues when those platforms disappeared, said Vanessa Grellet, head of portfolio growth at CoinFund, a digital asset venture fund.
"I think we'll see [NFTs] go mainstream in the next five years," she told Insider. And like Lai, she sees more use cases for NFTs other than art and collectibles.
"I'd like to see more assets come into the
Yet, similar to other innovations that threaten to disrupt industries, there is resistance to broadening the uses for NFTs, she said.
"There is a natural sort of slowness until people see a bottomline opportunity," she said, adding that the space also needs regulatory clarity to succeed.
NFTs have surged in popularity this year. When people buy NFTs, they gain the rights to the unique token on the blockchain, not the artworks themselves. But the fact that the information on a blockchain is next to impossible to alter makes NFTs appealing, especially to collectors and artists.
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