Fred Ehrsam: 90% of NFTs will become worthless in 3-5 years

A recent Bloomberg interview with Coinbase co-founder Fred Ehrsam raised a question: There are 5,350 cryptocurrencies on Coinmarketcap. Just nine years ago, there was only Bitcoin. After Bitcoin, various types of altcoins emerged, and then ICOs. Finally, starting last year, non-fungible tokens (NFTs) and decentralized finance (DeFi) have seen a huge explosion. Although so many tokens are listed by CMC, can each of these tokens survive in the next few years?

“People are going to try all sorts of things,” said Fred Ehrsam. “There will be millions of cryptocurrencies and crypto assets, just like there are millions of websites. Most of them will not succeed.”

Ehrsam has a similar view on NFTs, which are hot in the cryptocurrency industry. He compared NFTs to the early Internet companies in the late 90s. He said, "I would even say that 90% of the NFTs produced currently may become worthless in three to five years. However, this statement also applies to the early Internet companies in the late 90s."

The NFT market has been booming this year. Recently, a pixelated digital figure called CryptoPunk #3100 was sold for $7.58 million, becoming the second most expensive NFT ever, second only to the digital artwork of artist Beeple. NFTs have also spread rapidly in the music and fashion industries, and celebrities and artists have publicly expressed their support for NFTs.

Ehrsam said, "The difference between now and 2017 is that suddenly the door is opened and the application range is wider. The emergence of Ethereum shows that applications based on blockchain can be built... I think over time we will see mainstream consumer applications, and maybe NFT is a strange 'bleeding edge' (referring to a cutting-edge, not perfect technology)."

During the interview, Ehrsam also talked about Dogecoin. He said, "If there's anything that cryptocurrencies have taught us, it's to never dismiss a good meme." Even though he criticized the bubble that exists in the cryptocurrency market, he remains optimistic about Bitcoin and other "meaningful" cryptocurrencies. He added, "The world is not going to change overnight, but you can see the seeds of exponential growth are already there. So, I do think we're going to live in a future where we no longer need a centralized platform to coordinate work. Financial services have become a clear example, you can be your own bank. You no longer need a central institution to hold your money."