In this edition of ICON Weekly, we’ll discuss ICX price movement and why I think development of NFT-based products is important for ICON.
ICX Breaks $1.00
After bottoming out at $0.10 in December 2019, ICX saw a steady climb up to the current trading price of $1.50. I’m not going to lie, I spent most of 2019 worrying if we’d ever see the $1.00 price point ever again. Even though I’ve expressed my fair share of criticisms towards ICON over the years (most of which have been addressed) I’ve never doubted the potential of ICON from a fundamental perspective. That’s the thing about crypto though – price action isn’t really correlated with a project’s fundamentals.
For nearly two years, I continued dollar cost averaging into ICX while watching other projects, many of which were clearly scams, rocket to the moon. It really made me question whether a project’s fundamentals had anything to do with valuation. I still think price action in crypto is still primarily driven by market making algos, but perhaps less so than 2017.
For ICX, I really do think organic demand has picked up over the past few months, and especially the last two weeks. Both the staked supply of ICX and the number of ICONFi users have been trending upward, and this is only possible with retail buying and withdrawing ICX from exchanges.
I’m not sure what else to say about price action (I’m not a trader), but I had to acknowledge it. Breaking $1.00 may look like nothing special in a few years, but it’s undoubtedly a huge milestone after two years of consolidation between $0.10 and $0.40. Again, I’m not a trader, but the next level I’m paying attention to is $2.00 – a support area that held for four weeks back in 2018.
NFTs is the Next DeFi
If you’ve been in crypto for a while, you probably remember masternodes. Back then, everyone wanted to accumulate enough crypto to launch a masternode. I remember researching how to set up a DASH masternode myself, until I saw how expensive it was. After masternodes, delegated proof of stake was the next frenzy. A year or so later, DeFi became the leading narrative in crypto, and that brings us to 2021. With DeFi moving from pure speculation to truly usable and meaningful products, what’s next in line?
I think non-fungible tokens (NFTs) are going to have a huge year in 2021. If you’re not familiar with NFTs, think about them as tokens with unique characteristics. In other words, NFTs allow you to represent the difference between a first edition Charizard and a regular edition Charizard with a liquid digital token. In 2021, NFTs are being used in a variety of industries to tokenize assets in the real world. For example, artists tokenizing illustrations into NFTs.
At this moment in time, I see NFTs as a trojan horse of sorts. It has huge potential, but the environment is not yet ripe for disruption. This is why I think it’s a great time for the ICON community to start building primitives for mainstream NFT adoption in the future – more on that later.
NFTs allow for “digital scarcity”, which is an extremely difficult concept for people to grasp. If you purchase a one-of-a-kind painting at an art gallery or acquire a Stradivarius violin, you can physically feel the analog scarcity. A painting is something you can see and feel, while a Stradivarius violin is something you can play and hear. When dealing with physical objects, there’s no interactional barrier – it’s a direct interaction-to-sense experience.
In my opinion, digital scarcity is difficult to comprehend for two main reasons.
- Computers are seen as devices that accelerate traditionally time-consuming tasks. For example, it’s much faster to copy and paste a Microsoft Word document than to write out two copies of said document by hand. Right or wrong, this phenomenon cheapens our perception of the value of digital data because it can be copied with very little physical work.
- The user experience of interacting with digital data is pretty terrible at this point in time. Imagine if you bought a CryptoKitty NFT. Now what? You can’t do much with it beyond looking at it on your screen or selling it on the open market. As a blockchain nerd, I still think buying a digital cat is cool. For mainstream users, buying a digital cat is a gimmick.
In order for NFTs to take off, the two aforementioned issues have to be addressed. If we solve #2, I think #1 will actually solve itself.
Let me explain.
If scarcity is correlated with an object’s (analog or digital) ability to be interacted with, the most obvious way of increasing a digital object’s “scarcity score” is to make it accessible to more human senses – this effectively reduces the interactional barrier. So, instead of just being able to look at an NFT of a painting on your computer screen, what if it was possible to actually place the painting of the wall of your apartment?
This is exactly what augmented reality (AR) allows you to do. A few years ago, AR was a new technology for the consumer market, and it was mostly a buzzword. In 2021, the situation is very different. Over the past two years, Apple has made huge strides in AR from both hardware and software perspectives. The latest iPhones and iPads are equipped with proprietary silicon and camera technology optimized for real-time spatial calculation, while the latest version of ARKit (Apple’s SDK for developer AR apps) gives developers a powerful suite of tools to create high-quality AR experiences.
So, the processing technology (silicon and cameras) and software (ARKit) is there. The missing piece of the puzzle is a truly immersive experience. Right now, it’s possible to use an iPhone to place an NFT painting on the wall of your apartment, but the barrier of interaction still remains because it doesn’t provide an immersive experience.
Interestingly enough, Apple is reportedly working on its first AR headset to be launched in 2022. This report should not be taken lightly. Historically speaking, Apple doesn’t enter new markets prematurely. Furthermore, when they do enter a new market, they tend to dominate within a few years.
MP3 players existed before the iPod, smartphones existed before the iPhone, tablets existed before the iPad, and smartwatches existed before the Apple Watch. In all four of these situations, Apple waited until the necessary technologies could be distilled into exceptionally usable products before making its move and dominating market share shortly after release.
We have no reason to believe the AR market will deviate from historical trends. Various AR headsets have been on the market for a while now, and almost all of them are not really usable in everyday life. Current AR headsets are unabashedly niche products that are limited by practical limitations (battery life) or societal inefficiencies (they look ridiculous). If Apple is ready to enter the AR headset market, it means they’ve been able to miniaturize the involved technologies to the point where a mainstream headset can be produced.
So, how can ICON gain traction in this new and upcoming market?
I propose forming a team of designers and developers to build an intuitive API for both launching NFTs from iOS apps, and representing NFTs within iOS apps. Imagine if an iOS developer wanted to add NFT support to an app. Instead of having to learn about NFT token standards and building an API from scratch, what if they could just import a well-documented Swift library that uses ICON for the backend to generate and manage NFTs? An iOS developer shouldn’t need to be a blockchain developer to use blockchain.
What do you think about NFTs and my idea for building out an API bridge between NFTs on ICON and Apple’s ARKit? I’ve been toying with the idea of putting together a CPS proposal for this idea. If we can get a team together (graphic designer, UX designer, ICON blockchain developer, Swift developer), I think we can do this. Let me know what you think on Twitter!