NFTs represent a physical asset. Normally you transact in physical assets after verifying the intended acquisition for authenticity and suitability. NFTs can represent an asset after it has been subjected to due diligence. It helps prevent duplication and fraud. In some cases, NFTs will be able to reduce transaction costs also. NFT use cases are increasing, becoming popular as transactions increasingly become remote.
Tokenization is becoming more and more popular. Central Bank Digital currencies are being designed with tokenization at the core. The recent experiments on the Indian CDBC are a case in point.
Cryptocurrencies are facing resistance from national regulators. Regulators are finding it difficult to authenticate the validity of transactions. Tax evasion and transaction opacity are some of the chief concerns. The recent scandal and massive losses incurred by the US-based cryptocurrency exchange and the subsequent indictment of its founder has shaken this market. The market value of crypto assets has nose-dived, and much of investor wealth has disappeared.
The recent Ukraine- Russia conflict and resultant sanctions on Russia have hugely impeded financial transactions with Russia. Reports indicate that cryptocurrencies are being used to bypass traditional banking channels and circumvent transactions. The opacity and lack of traceability of cryptocurrencies have suddenly emerged as an advantage. Such transactions will be characterized as illegal under international law. Therefore, the use case mentioned above will get limited traction globally.
As these are designed today, I believe cryptocurrencies will have limited utility. They will continue to be an asset class with some use cases that people will find of value. Blockchain technology is being used to create sovereign-supported and regulated digital currencies. These, in the future, will become an important global transaction medium.
Net-net, NFTs, and cryptocurrencies will be popular among users. Other use cases of blockchain technology, like smart contracts, will probably become more popular than NFTs and cryptocurrencies.