All posts tagged "NFT"

As we find ourselves in the midst of cryptocurrency market highs, NFTs, short for Non-Fungible Tokens, have once again gained popularity. We saw this trend start to regain steam in November of 2020, when we reported on the sale of a digital art print with innovative features and a charitable bent. NFT markets now, in February 2021, have grown frothy at best and a huge bubble at worst. The use case for NFTs to tokenize real world assets is a massive one, but that does not mean that all NFTs are created equal. In December 2017, at the height of the last crypto bull market, I wrote the following phrase on this very website: "People are spending millions of dollars on digital cats!" What may sound silly now, was a massive digital collectibles market that congested the entire Ethereum blockchain, almost to the point of being unusable. This culminated in the mostly symbolic purchase of a $140,000 CryptoKitty print at the 2018 Ethereal Summit (that being a much higher sum at the current ETH/BTC prices). https://twitter.com/blockchainbeach/status/995465464875831297 NFTs can be a valuable technological innovation, allowing participants to: Create scarce digital items Allow for fractional ownership Tokenize physical goods and collectibles Prove authenticity and ownership Increase liquidity of mostly illiquid markets Art is one store of value that wealthy people invest in. However, if they do have to sell a piece of art, it can take months to have it shown and auctioned off. Should the owner decide to tokenize the piece, she would be able to sell a portion of the token, keeping most of the value and the physical art work, while creating a liquid market for the remainder. Scenarios like this would open up the fine art market to a much larger group of investors and could be impactful. Artists may also choose the digital medium for some of their new artwork. These pieces may gain value on their own merits, similar to how art has evolved from sculpture to paintings to different forms of multi-media. Beeple is one artist at the forefront of this and will soon be auctioning off his work, The First 5000 Days (2021), with Christie's auction house. However, just because something is digital and scarce, that does not mean that it is inherently valuable nor that it will hold any value it does accrue in a manic market. Let's look at the product leading the current NFT market, NBA Top Shot. The same developers behind CryptoKitties, Dapper Labs, released this set of NBA highlight trading cards. The company sells packs of digital basketball cards with embedded video highlights and have been transacting in the tens of millions of dollars in recent weeks. Each card has a set amount, creating some level of scarcity. Newly released packs have been selling out in minutes for upwards of hundreds of dollars. For some lucky people, finding a scarce card from a superstar player has been lucrative. A Lebron James card with only 49 released was recently sold for $208,000. It was found in a pack that cost $230. This may be a corollary to the trading card market where a Lebron James rookie card recently sold for $1.8 million. Perhaps this scarce Lebron will hold some value, but what about the rest? Currently listed in the Top Shot resale marketplace include listings like $770 for a Kentavious Caldwell-Pope layup with 1,000 of the same card in the series. There's a Chris Paul at $1,675 with 1,434 in the series. And really, should a Bismack Biyombo layup, one of 15,000, even be worth $21? These prices being on top of the $50-100 in Ethereum gas fees for each transaction on the network. Are you an NBA fan, an art lover, a collector, or even just someone interested in new uses for blockchain technology? If so, go wild and have fun with your new digital objects. Collect them, trade them with friends, and maybe years from now, you'll have something valuable in your wallet. However, if you goal is to invest in digital assets and build wealth, you're much better off buying Bitcoin. So until next time, "People are spending millions of dollars on digital basketball videos!" Editors Note: the author of the article is not a no-NFT'er. He purchased a few NFTs in the LA Blockchain Summit COVID Relief Charity Auction.

Blockchain Beach

All posts tagged "NFT"

Opinion

NFTs Continue to Innovate, but Most Are Not Investable

News

Former MLB Player Sells Charity Embedded Non-Fungible Token for $120K