In the past year, the crypto craze has expanded into an inescapable hellscape. The technology is all over social media; even game companies like Square Enix and Ubisoft are almost trying to incorporate NFTs into their games.
However, much like the cryptocurrency that is used to purchase NFTs, the cryptoart is a remarkably small market. Additionally, that tiny market already has its own top percent that owns the majority of assets.
10% of NFT owners own 80% of NFTs
In a report by NNW, the miniscule population of the cryptoart industry was exposed. Despite major companies hyping up the technology as the “next big thing”, the majority of people are seemingly uninterested in dropping thousands on virtual assets.
By the month of November, 2.7 million NFTs were registered in circulation. However, despite assumed popularity via a very vocal majority, those assets were owned by a population of just 360,000.
Additionally, that 360,000 population could, in reality, be even smaller. The current population is based on the number of crypto wallets that NFTs are tied to. However, in the crypto world, one person can hold a number of wallets, and that's often the case.
The NFT industry is also populated by a massive number of “whales”. In the article, it was revealed that 80% of all assets are owned by just 10% of investors. This exactly mirrors the cryptocurrency industry which is also populated with wealth hoarders.
Second Life vs Non-fungible Tokens
The market for non-fungible tokens has often been compared to MMOs, most specifically Second Life. Those who believe that NFT technology is the future claim that these virtual assets will be usable across “The Metaverse”.
As per NNW, more people own virtual items in the rather niche MMO world Second Life than people own NFTs. At the time of writing, more than 500,000 Second Life players own some form of premium virtual items.
The outlet writes: “Second Life hasn’t been “hot” in the tech world since 2008, but its virtual economy is still larger than the supposedly hot NFT market?”