OT Discussion: NFTs - Are they here to stay or are they just a fad?
NFTs have really taken off in the past few months. Starting with NBA Top Shot, it seems like anyone and everyone is creating NFTs, some of which are selling for tens of thousands of dollars. Tom Brady recently started an NFT company that sounds like it is going to sell NFTs of athletes' autographs. For me, it's hard to understand the value in NFTs. They are just a unique digital copy of something that has no utility, yet the value of some NFTs is insane and people will buy and sell them for large sums of money. I can understand the value of physical objects like art, memorabilia, shoes, etc. but NFTs lack some of the characteristics of real objects that seems to hinder their ability to have value and increase in value over time.
We have a large age range of users with different knowledge on this board and I'm curious what people think about NFTs and their future.
Tokenization of investments is here to stay. These prices are not.
Another bubble being blown.
Naked Bootlegger NFT demand is off the charts.
But I still don't really understand them.
I'm knee-deep in cryptocurrency.
In my opinion, NFTs are real and enduring.
Speculators have driven the price of things to absurd highs but the underlying concepts/values (verifying authenticity and proof of ownership) are real and, therefore, will eventually reach mass adoption.
Marc Andreessen wrote a famous piece titled "Why software is eating the world." More and more of our world will be digitized. NFTs will make this further possible.
To that end, Ether (the token of the Ethereum network) will continue to gain value especially as DeFi replicates financial instruments of traditional finance.
What your long terms if you don’t mind me asking?
April 16th, 2021 at 10:00 PM ^
Because cryptocurrencies are more volatile (as a nascent market), long-term is 3 years imo.
For something like equities (re: traditional stocks), I would say minimum 10 years.
The pace of innovation is simply much faster in cryptocurrency.
Once NFTs start getting applied to more things that are truly unique and "ownable" I think you're right that the real value will be in the platforms. I could see them being used for things like warranties, proof of purchase, and all kinds of other things.
NFTs as collectibles seem like an enduring concept, but whether a specific type (TopShot, CryptoKitties, etc.) has any enduring value is a crapshoot just like any other fad. All you're really trading is the ability to say you own something, even though there's no way to enforce it.
That said, I minted a haiku just to see how the process works and if anyone would like to purchase it just let me know.
NFT pricing structures are absurd at the moment. It'll need to come back to Earth. My graduate student has been selling very very mediocre work he makes in minutes for like $850. Who is buying that? When I glance through the marketplace, I see much of the same quality of work - some going for $10,000. Makes no sense. That being said, I'm going to create an account and milk it for all its worth while I can! See ya!
Are you a professor of marketing by any chance? If so, you should do great! My problem is that it isn't free to put them up for sale, and my "art" isn't very good, so my experiment was very short lived... hah
The most important applications of NFT are NOT collectibles. The big market will be tokenization of illiquid and hard to value assets. I have written on its applications in real estate. Suppose you tokenize a football team or a player. The tokens will have claim on life-time income of the player. Half of the tokens are "purchased" by the player so that he will have a skin in the game. The other half are sold. First, you have made the "player" liquid and his human capital can now be traded. Second, traded value of the tokens will tell you immediately how much the player is worth. I was involved in real estate tokenization project in the UK, and now we have a clear idea what the property is worth and besides small owners can sell their tokens and do not have to wait for the primary owner to liquidate the investment. It is revolutionary.
Interesting! Not sure how I feel about people feeling they have an ownership stake in someone else's life/income. I can't imagine the pressure an athlete or other professional would feel in that situation. Any thoughts on the ramifications of such a system for the individuals? What's the exit strategy for something like that?
April 16th, 2021 at 10:24 PM ^
The proceeds from the sale of the tokens go to the player. The player gets to diversify his “portfolio” of asset. Instead of everything being tied to his human capital, he can use the proceeds to create another source of income. A British soccer player has already done this.
I believed in bitcoin but this is a fad
I think NFTs will endure for identity but not for commodities.
I mean, someone just paid $300,000 for a Pokemon card, so how can anyone know what is real anymore?
When people have too much money, all kinds of bubbles get formed.
Don't know much about NFTs but I know that the comments are not working in Brian's MBB minutes distribution article, FYI
Glad it's not just me.
Just waiting for the next wars to be fought over internet servers instead of oil
That will probably be a quick war. Everyone will just be DDOSing each other into oblivious and the internet will basically stop working.
You mean sort of like to MGoBlog site during a bad Michigan football loss???
/ducks
More like NK hacking SONY and holding the data hostage while leaking embarrassing emails.
The Daily from the NYT just had a podcast on NFTs this week. It's worth a listen.
I would only be interested in NFTs created by people who lived long before "digital copying" existed. Like an NFT by Dégas or Bernini would be cool.
NBA Topshot is my first and only experience with NFTs thus far. I got in mid January. At one point I had an ROI of almost 20. It has since dropped to about 5. Still extremely lucrative, but timing was key. People that got in at peak valuation in late February could have a negative ROI. Conversely, the initial closed Beta investors could easily have an ROI of 100.
I dont think the current Topshot valuations are insane. As a digital collectible with the backing of the NBA, I think it could be undervalued relative to physical cards.
The past few months have been interesting on Topshot. The exponential user growth caused pretty massive problems scaling the infrastructure. The are not really marketing it right now and it is still growing.
It will be interesting to see what happens as they come out of Beta. I can see it continuing to grow or fading away.
Seems legit to me! Now if you'll excuse me, I have a few more gifs to make. These are lucrative.
Sincerely,
Beeple
As someone that owns around 30 different types of cryptos (coins, tokens) I too am a bit confused about these types of NFTs. I guess they are going to be a big thing.....
This is how I feel about NFTs.
https://www.abc.net.au/news/2021-04-15/digital-art-single-pixel-nft-sold-more-1-million/100070810
I don't think so in their current form.
You're verifying the authenticity of a digital object essentially, which is a contradiction.
Rich people will only really buy this stuff if they think they can resell it, and the realization that the emperor has no clothes can't be far off.
This is how I would sum up the rise of NFTs...
Remember the old picture discs?
I remember a long time ago in the 90s when the media was saying something technologically incredible was going to be revealed, something that will change life as we know it. More important than the internet they said. As big a deal as the PC someone said. There were speculations that it was fusion power, economical electric/hydrogen cars etc.
It was the Segway.
I thought then it had no future beyond being a really expensive toy but it found it's niche and is here to stay.
I feel somewhat similar about the NFT.
The amount of overheated hype about the Segway was comically ridiculous. I think I see people using them about twice a year, if that.
To get all that PR its founders must have been either rich or ridiculously well-connected. It was insane.
Not sure but as a digital artist, I hope they stay. It's a new medium and way to make a living that wasn't available to us before. It will definitely peak soon and be considered a "fad" by some, but I'm sure the idea will be around forever. Just maybe not as hyped as it is now.
For any collectors or fellow artists, check out my new but growing collection below!
https://opensea.io/accounts/sebaballe
Not in their current form, but I do think the blockchain will eventually be used for something useful (e.g. smart contracts and whatnot, which is kinda what NFTs are attempting to do).
Meanwhile, plenty of snake oil going around in crypto. Caveat Emptor.
I couldn't tell you, but then again, I'm still sitting on a barn full of tulip bulbs.
Make sure you get out before 1637.
At first I scoffed at them because like how does one display an NBA Top Shot? Its not like a trading card or a piece of art that you can hang on the wall. So on one hand I don't really understand why people are spending money on these things. But then I also realize that people have been trading and collecting sports memorabilia for over 100 years, and going back even further people bought things of little intrinsic value, like Renaissance paintings. I mean what is so special about a Warhol painting or the shark in formaldehyde that sold or millions. People will buy rare comic books and other things that can easily be digitized and have an NFT attached. I think the value comes from the fact that you can trace the origins and authenticity of the product with the NFT, and that you're getting something that is *one of a kind*. So that is something that will be here to stay and something that will have value. In theory, no more getting ripped off buying fake stuff or copies. Since this is all very new and uncharted territory, I think its getting worked out in real time by people throwing a bunch of money at things that they aren't even sure of.
Sticking around, it's the real deal IMO.
Top Shot for hte NBA may be overvalued now, until they release some all-time moments like Jordan's shot in 1998 to beat the Jazz, or anything from the 80s
NFL moments, MLB. Now thing about Fortnite moments or any other online gaming platform. If you have a kid under 20-25, you understand how those may be in demand.
Moments form movies. Or even real life. Digital artists could make some real dough - they are already.
Digital crypto will only grow, especially etherium since that seems to be the basis currently.
But why would someone pay for a clip of Michael Jordan when they don’t get anything other than the ability to say “I paid for a clip of Michael Jordan”? I could see if you got IP rights and the revenue that follows but I haven’t heard anything to suggest such a thing
b/c they are non-fungible. rare. popular or in demand. Same reason people buy art I guess
Bragging rights if it's something really special.
Wouldn't someone like WD love to say that he, and only he, officially owns the very first Tweet?
I’m indifferent. If people want to spend their money on something, that’s on them. I personally find no inherent value in a unique digital asset that is easily replicable, if not officially so. I like to invest in things that have tangible value and are focused on long term value creation focused on solving real problems. To each his own.
It feels awfully 'bubbly' to me, fueled by all the liquidity floating around and no reason for price appreciation other than the greater fool theory, but that's just one man's guess. Kudos to those of you artists who have been able to make some money off this, strike while the iron is hot.
As a technology, absolutely. An NFT allows a digital object to be designated as authentic and original, even if the underlying object is copied.
As a way to "sign" digital art, probably. Think of all those signed numbered prints artists have sold for a while. It can also let you designate a single digital copy as the "original".
As an investment, probably not, except as the other uses hold value. An investment is something you expect to appreciate in value. An NFT has intrinsic value in being the "original" or "non-fungible" denominator for something, over and above value that the "something" has, or any copies of that thing have. Put another way, if you have an NFT for a piece of art that designates it the original, that NFT will hold value only if people value that designation. Collectors have attached value to that for as long as there's been a collectible market for art, even when it became possible to produce physical copies of that art cheaply. For example, some of us might think it would be pretty cool to have one of 50 NFTs attached to a hi-res video of the 1998 Rose Bowl - the equivalent of a DVD signed by the team. There would be other copies out there, but they wouldn't be signed or "authentic".
The real question is whether enough people would attach that same sense of pride-of-possession to a digital copy. I suspect that it will depend on your age, too - I attach a lot of importance to physical books, which I don't attach to e-books, because physical books are an indelible part of my life.
NFY-Crypto but make it even dumber.
Serousily though, I could conceive of some uses of NFTs (patronizing digital artists, IP rights) but paying the “leave Britney alone” guy for his video or @Jack for his first tweet or Lebron for the highlight of his Kobe dunk is just “look at me” consumption without the actual consumption. At least when billionaires buy art they are actually getting exclusive use of that piece of art
They won't go away, but the frenzy around them feels like Tracking Stocks during the dot-com bubble. Remember those?
At some point, the connection between tangible value and price breaks down. People don't really cherish most of these as keepsakes, they are hoping they can unload them to a Grater Fool before the inevitable price crash.
Do I think people will continue to invest in what amounts to memorabilia? Absolutely.
Do I think we're going to find that a lot of these sky-high NFT prices are a bubble and being manipulated by a couple of influential parties at the detriment of others? Yep.
In the end this will be a collectible to some and there will be a thriving market, but I've seen enough stories about people struggling to get their money out and issues with tracking ownership that I suspect we'll see this settle down quite a bit as more scrutiny falls on it.