Non-fungible tokens (NFT) topping Collins Dictionary’s ‘word of the year’ ranking demonstrates the buzz this new asset has gained in such a short space of time. GlobalData’s Social Media Analytics tool shows that mentions of the hashtag ‘#nft’ have increased by a massive 3,566% between January and October this year. Further, the leading data and analytics company’s Filing Analytics database reveals that even businesses are following suit, seeing a 20x jump in mentions of the keyword ‘NFT’ between 2020 and 2021.

Amrit Dhami, Thematic Analyst at GlobalData, notes that the popularity of NFTs is due to the herd behavior propagated by social media, and unless someone can invent a real-life use for the technology, the bubble will soon burst.

Dhami comments: “The technology-related words on Collins’ new words list – ‘NFT’, ‘crypto’, and ‘metaverse’ – are buzzwords that aren’t widely understood but have pervaded conversations everywhere this year. This is thanks to the herding pressures of social media, where users feel the need to keep up with the latest trends flaunted in the posts they follow.

“Indeed, many popular NFTs originated from widely circulated memes such as ‘Disaster Girl’ and ‘Success Kid’. The monetization of internet memes is a trend also showcased by the Dogecoin and Shiba Inu cryptocurrencies.”

An NFT is a unit of data stored on a blockchain to certify ownership of a digital asset  like an image, audio, video, or tweet.  One of the most popular NFT projects is the ‘Bored Ape Yacht Club’. Musician Post Malone and presenter Jimmy Fallon were among the proud owners of a unique cartoon of an unimpressed-looking primate living on the Ethereum blockchain.

Dhami continues: “The wild prices that NFTs sell for make them the latest playground for the super rich. The hype is propped up by people jumping on the bandwagon and replicating the actions of influencers, celebrities and entrepreneurs. Venture capitalists are massively increasing investment into startups developing NFT collectibles.

“NFTs will be perceived as a fad until real-life use cases are developed.  Like all market bubbles, it threatens to burst once investors realise the lack of substance.”