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NFTs Will Eventually be Used by the Government Which Will Mark the 'final stage' of Adoption

  • 1 yr ago
  • 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.

Driven by digital art collections such as Bored Ape Yacht Club and Pudgy Penguins, interest in NFTs drove sales on OpenSea alone to $3 billion, with over 300 million transactions on a single day.

But even with massive growth, the space is still in "very early stages," Lennix Lai, director of financial markets at crypto firm OKEx, told Insider.

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.

For now, NFTs - digital representations of artwork, sports cards, or other collectibles tied to a blockchain - still need to overcome multiple hurdles before further mainstream adoption can occur.

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.

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