The NFT debate. Not just "funny jpegs", my friend.
It looks as if the "outside world" is only seeing funny jpegs and a waste of capital in NFT purchases. But are they less legit than your Gucci bag, or your Rolex timepiece?
-Is it only me, or is everyone around me spending crazy money they don't have to celebrate?
-Celebrate what?
-All these over-the-top parties/events/whatever, sucking every last bit of our budget? And our sleep? I'm exhausted!"
Second pint in, and the "wine-philosophy" had begun. (Greek term to describe low quality "fortune cookie"-style platitudes, and unsubstantiated arguments.)
In this case though, he wasn't wrong.
The discussion began as Philip (friends since high school btw.) realized he and his wife had spent a crazy amount of money since last summer.
And he was miserable.
They were running like competing in a marathon; from weddings to all sorts of "milestone-events". Everybody had one of those planned. Birthdays, namedays, promotion celebrations; the list is long and relentless! Some of them in different countries. “The celebration will take place at a Dalmatian castle in Croatia on the 25th of July. Book your flights, and share our happiness!”
"Cool", you might say; but what does this have to do with NFTs?
Well, our world is changing, friend!
You can see it, feel it, and read about it. We are never going back to the "life before". If that was your hope, well, forget it. And don't listen to those who try to sell you this "nostalgia". We are not going back. Period. The pandemic gave the world a good reference point for that. Like BC and AD used to mark our time. But it's more than that. The world is becoming more decentralized again. From huge communities, to small "pockets of interests". The "techy" crowd refers to this as "Web3." You might also notice other strange words surrounding it. "Metaverse" is one of them. "Blockchain" is another. Yes, I know... but it's not just the "Bitcoin" thing. I'm talking about the protocols and ecosystems these coins are built on. The real revolution. The idea. But, that's for another day. Back to our story, now.
So, change.. It's slow, but it's happening. And the world is also becoming more digital. Technology has enabled that. It took us a couple of decades, but we are now at the point where technology is directly affecting and dictating culture shifts. Marc Andreessen referred to this in an interview full of noteworthy insights1.
People like to show off their success. Sometimes they do it by buying things and showing them in their social media accounts as status symbols like owning cars and watches, or expensive handbags. That's basic human nature and human behavior. People are looking to gain status. The minute they think they got that status they seek out the fastest path to convert it into social capital.
So in reality owning an NFT is a status symbol for some people. I mean you cannot tell other people what they consider such symbols to be. Your generation, my generation, could consider expensive cars and watches to be a sign of success. But today, in the digital environment we live in, value pyramids in different aspects of our existence have changed. Owning an expensive NFT like cryptopunks for example is a big deal for a lot of people. People like to use the image of their NFTs as a profile picture. If you are on Twitter you know what I'm talking about. Also when you display an NFT that's not yours you get reprimanded by others as bad practice. Like wearing a knock-off bag or watch.
Everything is going digital, it seems. The thing is, when everything is going digital trying to prove ownership of something and have the ability to carry it around with you across the digital pathways and show it whenever you like it was very difficult up to this moment. Before the blockchain and the creation of NFTs as an application of it, proof of digital ownership and being able to transfer it and and pass it on to others was tough and tricky business, involving most of the times multiple and cumbersome actors and services.
It’s not anymore.
NFTs are going to play a big role in this new digital reality. It's not just some funny pictures you can buy and sell. It is going to be transformed into your own digital identity and social capital. Because it's very likely that in a few year it will tell others who you are much faster than reading your CV or your about me page.
So people are trying to build value by purchasing them. As we speak, groups and applications are being built that help bring together people lacking the means to buy an expensive NFT by themselves to put their money together and buy it collectively. Community spirit at its finest!
If all these people buying expensive pixelated pictures by spending millions of Dollars seem crazy to you, maybe you should pay better attention instead.
Think about it.
NFTs provide social capital to their owners. It's an investment that also elevates your status. That's because the most expensive ones are scarce. Simply owning one of them and displaying it as a profile picture of yours says something about you. Maybe you are rich. Maybe you bought early and now you are rich. So you are maybe smart or a good investor. Besides, using expensive “pictures” to raise your social capital is not something new. People have been buying fine art for a very long time. The problem all these people have is that NFTs are more, let's say, "public". That's something new and quite different from the exclusivity that the fine art "clubs" were used to.
Moreover NFTs provide utility. First and foremost they have value as investments. They also open the doors to groups and events that only accept people who own NFTs from specific collections. Exclusivity. You can still of course print them on canvas or with the help of a 3D printer and display them, digitally or in real life.
Finally, it's entertaining to own an NFT. People for example, are creating personas based on their NFTs and use them when they bid in auctions. How many can claim that they can use their status symbols to have fun by publicly exhibiting them and using them? Comic books have been created by them. Very soon the first miniseries and even movies are going to be created. It's inevitable.
So it's a good idea to start paying attention. Sure, the vast majority of them will be worth nothing in a few months or years. Most projects and timetables are going to 0. But that's not the point.
The point is NFTs are the first application of digital identity that has real practical use as well as monetary, social and entertainment value. End while most projects will fail just like most internet startups failed in the early 2000s, those who are worth something will develop further and thrive like the Facebooks, the Amazons, and the YouTubes that rose from the ashes of the internet bubble. Start your research. And start investing.
Image of woman holding bag from fashionista
Image of knock-off bags from the nypost