MSS Post Series: NFTs
Disclaimer: The hereunder is provided for information purposes only and does not constitute advice. NFTs are highly volatile assets, your capital is at risk of losing its full value.
Topics that will be covered
- ✅ Success stories
- 🎩 Status, Signalling, Utility & Entertainment
- ⚠️ Risks, fraud, scams
- 🤟🏽 NFT lingo
- ⛽️ Costs & Gas Fees
- 🤖 Digital native identity & expression
I believe this topic needs to be discussed to allow more people to be open to exploring new technologies as they emerge, and not demonise them out of fear of the unknown.
Make no mistakes, the risk of scams and failures is very high! Only spend what you can afford to lose! 🙅🏻
NFT Series (1/6): success stories
- Digital artist Beeple, sold a collaged image file for $69 million plus 10% royalty off consequent resale 🖼
- Top Shot a marketplace for NBA highlight reels, has generated over $230 million in sales 🏀
- Jack Dorsey, Twitter’s CEO, sold an NFT version of his first tweet for a whopping $2.9 million
- The musician (and mother of Elon Musk’s youngest son) Grimes sold her NFT collection of digital artworks for $6 million in less than 20 seconds ⏳
- $24 million Sotheby’s auction of Bored Ape Yacht Club tokens 🙊
- The average selling price of CryptoPunks has gone from under $200 to over $200K, a 1000X return in a span of a few months
- SoftBank’s Vision Fund led a $680 million Series B round, which values the company Sorare at $4.3 billion – a fantasy football platform based on NFTs ⚽️,
Those figures require anyone in the tech space to at least, pay attention and try make sense of what is going on. This series tries to explore why this phenomenon is taking place and is it here to stay?🤷🏼♀️
NFT Series (2/6): Status, Signalling, Utility & Entertainment
People seek out the most efficient path to maximizing social capital
- analysing NFTs based mainly on utility is missing the point completely
If everyone who signed up for Twitter 🐦 got one million followers just for signing up, there wouldn’t be any social capital in having one million followers. Social status requires proof-of-work
Social capital dynamics can help to explain all sorts of online behaviour that would otherwise seem irrational. There are three axes for analyses: Social signalling, Utility, and Entertainment (see image).
It’s “Investment-as-a- Status”, built upon scarcity. There are only 10,000 CryptoPunks and Apes , and within that limited set, there are some that are particularly valuable, and therefore makes for a great Twitter profile pic to signal status.
NFTs are entertaining as well: it’s fun to watch the sales, and some people are already building personas and online characters starring their Apes or Punks. Also, collecting is fun, ask anybody with a precious collection.
Social capital turns into Financial capital, and vice versa. NFTs will give owners exclusive access and unique experiences as they evolve to a wider audience. These have a high re-sale value.
NFT Series (3/6): Risks, fraud, scams
Bitcoin’s value is rooted not in the Bitcoin blockchain, but rather in the collective belief of millions that it is in fact valuable; NFTs, to the extent they capture and retain value, will require the same sort of collective belief .
The financial returns logic is quite simple: anything which is scarce and rare has value, and anything where demand increases as supply stays the same tends to go up in price. But NFTs are a reflection of more than financial speculation, imo of course…
One of the most popular forms of signalling or “flex” is NFTs as profile pictures on Twitter
In the digital era, the way the world primarily knows you is not through your face or your clothes—it’s through your digital avatar. This is key to understanding the paradigm shift
Second, NFTs’ leverage unique digital ability to be used in apps. For example, in Zed Run, a horse racing game, horses are NFTs and breedable, yielding new horses which can then be raced (known as “Play-to-Earn”) .
NFTs also serve as a way to participate in a community and find belonging . Today this typically takes the form of virtual communities where ownership equals access to locked Discord channels or membership into an “exclusive club”.
Early crypto owners started the NFT wave and are still a big part of it today —digital art collecting for a digital native audience .
One can suggest that the motivation around NFTs is linked to:
A collectable, supporting artists and creators, status signalling or speculation on pricing
Critically: its representing identity & belonging to community in a digital native experience
Social media has negatively impacted people’s mental health. Don’t let it negatively impact your financial wealth too. Do the homework, be disciplined and go in with your eyes open .
This series of posts appeared on Malta Startup Space a Facebook group I manage that inspires startup culture in my native country of Malta