Why the $12 billion (and growing) NFT market needs 5G
2021 was the year of the NFT, with big names getting in the business. Yet as this industry evolves, 5G may be able to power it to new heights.
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Art credit: Supercube v.5 (2021) by Krista Kim x Outliers
2021 was the year of the NFT. What was once a niche interest for a few cryptocurrency investors is now a global phenomenon, and NFTs, or non-fungible tokens, are finally being considered as more than simply “JPEGs.” Adopted by major brands and celebrities, NFTs are being bought, sold and talked about like never before. This nascent industry is still evolving, however—and 5G may be able to power it to new heights.
What are NFTs?
NFTs can be anything—because, at their core, they’re just a technology that allows for the record of the data to be permanently logged in a safe-yet-public manner: on the blockchain. And while cryptocurrency is also stored on the blockchain, NFTs are non-fungible.
What does that mean? When something is “fungible,” such as the U.S. dollar or a cryptocurrency such as Ether, stored on the Ethereum blockchain, one unit is always worth another unit. A nonfungible token represents a unique, indivisible asset. It has relative value that is dependent on a number of factors including scarcity, access, certification and more. NFTs can be used to authenticate and certify ownership of a good or service, access to an event, or even a membership into a club or community. They can also exist as purely digital entities.
While NFTs continue to evolve from fodder for an SNL skit to a technology we might use in our daily lives, many of the perceptions around them are likely to shift. As we’ve witnessed with recurring record-breaking sales just last year, NFTs are a growing means to buy and sell art and other collectibles: They are immutable certifications of authenticity, evidence of provenance and can help artists or their estates receive royalties in perpetuity.
5G may be a natural partner to the NFT market as its low latency, lightning speeds and load capacity can provide, among other benefits, the ability for art owners to experience complex assets that move beyond static images to the interactive and immersive.
Art credit: AUGMENTED SEQUENCE / Ropsten test mints 1-10. By Toimintoimin
Beyond art: Experiential NFTs
NFT technology has many use cases beyond buying and selling art, and new concepts are constantly emerging. For example, experiential NFTs focusing on experience and engagement instead of valuation have been on the rise across industries like sports, fashion and gaming.
In June 2021, Verizon launched its first NFT public beta, along with esports partner Dignitas, during VCT Game Changers 2021, a gaming event focused on elevating women and marginalized groups within the esports community. The NFTs were AR (augmented reality) captures of Dignitas’ team for the first-person shooter (FPS) game VALORANT, with each member’s victory dance minted as an NFT. At a live signing event over BlueJeans, Verizon’s video conferencing platform, the athletes interacted with fans and signed autographs for randomly selected participants. Once the NFTs are signed by the athletes, each victory dance is now customized with their autographs.
From JPEGs to AR and mixed reality
NFTs that incorporate augmented reality (AR) and other mixed-reality technology require significant bandwidth to minimize load times and create a more immersive experience. This is where 5G could play an important role. According to Dante J. Pacella, technology fellow at Verizon, “Although AR has been around for a while, 5G has the potential to really transform the experience. Because of the lower latency 5G can provide, you’ll be able to interact with more immersive assets in near real-time.”
This is especially important at events in the public sphere, Pacella says. “If there’s any type of modification to the environment in AR, you’re going to want to see that in as close to real time as possible. Once you’re out in the field or once you have highly immersive content that has to be updated, it can be a much better experience over 5G.”
The potential impact of 5G on NFTs stretches far beyond being able to see AR installations in higher quality. The ability to experience lower latency and faster load times in virtual experiences unlocks currently untapped potential in the realm of mixed reality. As companies plan to roll out various wearables and products aimed at facilitating mixed-reality experiences, users will increasingly rely on 5G networks to experience evolving technologies like NFTs to their full potential, especially on the go or at events.
The future of events and Web3 IRL
5G can also allow those of us engaged in the NFT ecosystem and “on-chain community” to interact IRL with greater ease. Lower latency and higher speeds can allow certain processes to happen nearly instantly. From using NFTs to access both virtual and IRL events and seamlessly paying with crypto to experiencing extended-reality artworks, the accessibility of our data, when stored on-chain, is highly dependent on our access to reliable networks.
As we move more and more into a Web3-enabled world, NFTs and metaverse experiences will likely move beyond VR headsets and computer screens and into our immediate environments. We can buy NFTs via AR filters on our phones or on wearables in near real time, which we’ve already seen in NFT integrations at mainstream events such as SXSW and Art Basel over the past year.
We are sure to see more events like this over the course of 2022—and future activations will be even more complex and immersive. As Pacella says, “With a 5G connection, there is an increased opportunity for a much more immersive, real-time, interactive experience.”
Go deeper on NFTs to understand how non-fungible tokens will change the content world.
