Ownership of non-fungible tokens (NFTs) is concentrated to just a few hundred thousand people, new data has revealed, despite massive media attention over the last year.
Figures from blockchain analysis platform Chainalysis show that between February and November last year, the 2.7 million NFTs in existence were owned by just 360,000 people. This compares to the roughly 300 million people that use cryptocurrency.
Less than 10 per cent of those owners hold 80 per cent of the value of the market, meaning it is dominated by so-called ‘whales’ and mainstream adoption remains a long way off.
“Can we start 2022 by facing the fact that NFTs, which in 2021 attracted copious media coverage and buy-in from top investors and brands, reportedly has less than 400,000 actual owners – less than 40,000 of whom own 80 per cent of all NFTs value,” author and virtual reality commentator Wagner James Au said.
“That’s a niche of a niche of a niche.”
In a blog post detailing the discrepancy between the media attention they receive and their actual popularity, James Au noted that more people own virtual items in the online game Second Life –roughly 500,000 – than the number of people who own NFTs.
“Second Life hasn’t been ‘hot’ in the tech world since 2008, but its virtual economy is still larger than the supposedly hot NFT market,” he wrote.
“And that’s setting aside the report that less than 10 per cent of those NFT owners – i.e. under 36,000 people – dominate that economy. This should be the kind of figure that makes people in tech [who are] excited about NFTs deeply question their assumptions.”
Despite the lack of mainstream adoption, several high-profile celebrities, public figures, corporations and even charities have entered the space in recent months.
Eminem reportedly paid £334,000 to buy a Bored Ape Yacht Club NFT this week, adding to his collection of more than a dozen NFTs.
Former First Lady Melania Trump also announced an NFT venture last month, selling a digital watercolour painting of her eyes called ‘Melania’s Vision’ as the first offering.