Introduction
NFT’s have suddenly become popular due to recent mentions from Gary Vee and Mark Cuban. Cuban has been selling what looks like nothing more than digital pictures, which could be easily copied. Why is he so excited? Read on to find out
Non-fungible tokens
‘Non-fungible Tokens’ are unique digital assets. If you take a popular game like Fortnite, a Sword might be an in-game that could be uniquely identified as your sword. Now imagine you could transfer that sword between games. While we are yet to see such a thing happen in mainstream games, for the first time, it’s technically possible to have a digital item that you can claim as yours alone.
NFTs can be used to uniquely identify the first version of all digital media. We are seeing the likes of Grammy award-winning music artists like RAC release their own unique digital tokens and earn a living in a way that has gotten a lot of music artists excited about earning an income directly from fans. In a sense, it’s like queuing for the album or having a T-Shirt or LP from a band’s first concert. You can verify you supported them in the early days.
The main categories of NFT’s are digital artworks, in-game items and collectables. The rise of NBA Topshot, the basketball game on the FLOW network has brought a new group of sports fan, collectors into the market.
Recent activity in space has people crying bubble. With small pixelated characters called Cryptopunks selling for hundreds of thousands of euros. What critics are missing is that anyone can take a picture of the Mona lisa on their phone, or get a high-quality print framed at home. But the real bragging rights are in telling people you visited the Louvre. It’s a way to signal that you are culturally curious. Collectible NFTs like cryptopunks, which have no utility, are status games. They signal that you were at the very beginning of this trend. And that explains why we have seen celebrities and some of the above-mentioned investors, get involved.
Eugene Wei captures this phenomenon in his famous essay, status as a service. Essentially much of social media is about signalling status without making it too obvious. It’s a global competition to take the picture that shows you live a uniquely fabulous life, without saying it directly. If I had to guess, the same thing is emerging with NFT’s.
