The NFT bubble WILL bursts, with 90 percent of Non-Fungible Tokens tokens becoming worthless in the next five years, Crypto expert and Coinbase co-founder say.

NFTs have shaken up the digital trading industry this year, but one cryptocurrency expert predicts that 90% of their value will be lost in the next three to five years, reducing them to "little or no value."

For those unfamiliar with the concept, non-fungible tokens, sometimes known as 'digital trading cards,' are a one-of-a-kind digital asset that is encrypted with an artist's signature and permanently connected to the item, proving its ownership and legitimacy.

It permits 'original' versions of famous online content to be sold as if they were real works of art, such as viral memes, sports clips, and tweets.

NFTs are taking over digital trading

NFTs have quickly emerged as the next big thing in the crypto world, allowing buyers to purchase a one-of-a-kind digital asset such as a sports highlight or even a tweet. The Non-Fungible Token is then permanently attached to the piece and encrypted with an artist's signature, proving ownership and authenticity.

Most NFTs include digital artwork of some kind, such as photos, videos, GIFs, and music. In theory, any digital device could be converted into an NFT.

NFTs are now mostly traded via 'drops,' or timed online sales by blockchain-backed marketplaces such as Nifty Gateway, Opensea, and Rarible.

There are numerous reasons why someone might wish to purchase an NFT. Because NFTs are considered collector's objects, emotional value may be a factor for some. Others regard them as a potential investment opportunity, comparable to cryptocurrencies, because their value may rise.

Andrew Steinwold, a writer and podcaster, traced the beginnings of NFTs back to the development of the Colored Coins cryptocurrency in 2012. But it wasn't until 2017, when the blockchain game CryptoKitties began selling virtual kittens, that NFTs became ubiquitous.

And, with major names like Elon Musk and the NBA on board, there's money to be earned in NFTs, with over $10 million in daily NFT transactions already taking place, according to the website DappRadar.

Even meme creators have gotten in on the act, selling NFTs of their most popular creations and making a lot of money.

Unfortunate Events Brian, Kyle Craven's comically terrible yearbook photo turned into a meme, sold for more than $45,000.

The painting Overly Attached Girlfriend, which was inspired by a YouTube video of Laina Morris satirising her love for Justin Bieber, has sold for $459,260.

In March, Twitter CEO Jack Dorsey's first tweet, 'just setting up my twttr,' sold for $2.9 million as an NFT.

However, early cryptocurrency pioneer Fred Ehrsam predicts that the bubble will burst, giving NFTs three to five years before losing most, if not all, of their value.

In an interview with Bloomberg TV this week, Ehrsam stated, "I go so far as to estimate that 90% of NFTs developed will probably have little to no value in three to five years."

'In the late 1990s, you might argue the same thing about early internet companies,' he said.

Such crypto schemes have crashed and burned in front of Ehrsam's eyes, with many of them relying more on excitement than substance.

'People are going to attempt a lot of different things. Millions of cryptocurrencies and crypto assets will exist, just as there were millions of websites. 'The majority of them aren't going to work,' Ehrsam admitted.

According to the Observer, Ehrsam began trading Bitcoin in 2010 as a foreign currency trader at Goldman Sachs before departing in 2012 to co-found Coinbase with Brian Armstrong, which went public in April at a whopping $100 billion value.

The crypto company's market cap has decreased by half in the months after it launched an IPO, despite continuous regulatory pressure.

Ehrsam, on the other hand, remains certain that bitcoin is "the next internet-sized opportunity for the United States."

In a Bloomberg interview, he observed, "The world doesn't change overnight, but you can see the seeds of exponential growth occurring already."

'I believe we will live in a world when we won't need these centralised platforms to cooperate.' In the case of financial services, you can already be your own bank. You don't need a central bank to keep your money any more.'

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