A gold nugget NFT should be more valuable than a rock NFT, right? Think about that sentence for a second. Imagine you traveled back in time and asked this question to someone living in 2015. Indeed, the world is changing fast.
Now imagine following that question up with oh, and by the way, someone just paid $1.7 Million for a cartoon picture of a rock!
NFT Fever
Has the entire world gone mad? I thought the NFT fever hit a high when SNL aired the “What the hell’s an NFT” skit. Which by the way, is definitely worth watching if you haven’t already.
Well, it looks like the NFT fever is still climbing. I just watched a video by @crypto_bitlord7, where he talks about someone suggesting to him an NFT of a pair of scissors. It is a $40,000 NFT, but for some reason he thinks he needs this pair of scissors. He doesn’t understand why, but he feels he has to have this pair of scissors. And then someone else suggests some other NFT and the process repeats. At the end he says he needs to talk to someone (presumably a shrink) because it is all getting out of control.
He is not the only one that needs to talk to someone. Can we go back to the “art collector” that paid $1.7 Million for a digital picture of a rock? And let’s consider that Visa recently announced that it bought a CryptoPunk for $150,000. In addition, there are a number of Fortune 500 companies now beginning to consider the marketing implications of jumping on the NFT craze.
Can you begin to see what is going on here? There’s something behind NFTs, marketing, and more that we don’t quite understand. Yet, some people seem to have an understanding of what’s going on and many are definitely profiting from it.
What Gives NFTs Value?
The NFT market is certainly interesting and rapidly evolving. The tweets below from @Jonahschulman_ touch on some of the value elements of this fascinating space. “I’m interested more in where the value comes from. It’s truly amazing to see people pay millions of dollars for jpegs. It tells me that brands and social consensus is the strongest value add something can have. Fundamentals are more irrelevant”
Well said Jonah! When it comes to NFT value, fundamentals seem irrelevant. Value comes from something else, like branding, social consensus, bragging rights, etc.
Now let’s consider the tweet from @RealNatashaChe, where she is proposing to create an NFT of a real diamond and then destroy the original diamond. If I understand her correctly, she believes the NFT will retain its original value, even after the diamond is destroyed.
This is crazy, but she is onto something. Consider again that value comes from things like branding, social consensus, bragging rights, etc. If you follow this Twitter thread, you’ll notice she has created a story and her story is grabbing people’s attention, including mine. User @alphacheatcodes twitted the following response:
It’s a great experiment, but… Value is driven by @RealNatashaChe and the novelty of the experiment rather than the diamond, destroyed or not. But curious to see how much this will moon
My prediction is that the NFT she creates will be more valuable than the diamond she destroyed.
The Gold Nugget NFT
This is NFT stuff is a huge paradigm shift for me. After all, I am more of a hard asset type of guy. In fact, for the longest time, I’ve been more of a gold bug than anything else. My transition to crypto has been rather slow. I do own a nice bag of Ravencoin, a miniscule amount of IOTA, and I am the proud owner of an NFT that was gifted to me.
Given my gold bug nature I asked myself, if a picture of a rock can sell for $1.7 Million, how much can a picture of a gold nugget sell for?
So, I decided to create a gold nugget NFT. Creating this NFT wasn’t as easy as I thought. I found myself playing with a 3D software and later exporting the image to be further modified in various picture editing programs and finally painstakingly touching up the image to try to make it somewhat representative of a gold nugget, while at the same time trying to maintain a cartoonish look.
See, many of the popular NFTs are not necessarily smooth high resolution images. Rather, some of these popular NFTs remind me of images from the early video games like Atari.
After several revisions I got to where my skill level could get me. And I have to say, I really like my gold nugget NFT. The process of creating this image made me appreciate the artistic side of NFTs, which I had previously disregarded.
Interestingly, as much as I like my gold nugget NFT, creating it and keeping it to myself doesn’t really create any value. As we discussed above, value comes from things like branding, social consensus, bragging rights, etc.
So, for this gold nugget NFT to gain any value whatsoever, what I need to do is to part with it. And for this reason, my next step is to try to sell this gold nugget NFT at JustNFTs.IO. This is one of the few marketplaces that fully support the Ravencoin blockchain and its community.
In conversations with Khalid, from JustNFTs, we talked about how blog posts can also be minted as an NFT. And in fact, that’s how the idea of this blog post originated. Yes, in the very near future you’ll be able to own the NFT that represents this very blog post. That’s something else!
Is is starting to make sense now? The gold nugget NFT will have the story of its creation documented in a blog post. And the blog post itself will be an NFT. Is this a way to create branding, social consensus, or possibly bragging rights? If so, then perhaps the NFTs that come from this exercise will have more value than a cartoonish picture of a rock that has no story behind it.
NFTs Are A Stepping Stone to Asset Tokenization
But, NFTs are about a lot more than just images and blog posts. I’ve been saying for a while that NFTs are really a stepping stone to asset tokenization.
Anything that has value can be tokenized. In other words, anything that has value can be represented by an NFT.
And, if you think about NFTs from this perspective, then now we are talking about a humongous market. Consider that tokens (or NFTs) can be used to represent collectible items, automobiles, stocks, real estate, intellectual property, etc.
Indeed, what we are seeing today with NFTs is the beginning of something huge. Which by the way, is the reason why I am so bullish about Ravencoin. Ravencoin is one of the few blockchains that will benefit from this market. And let’s not forget that this huge market is still in its infancy, as most people haven’t even begun to realize that NFTs (or tokens) will impact every single industry.
Moving Forward With NFTs and Asset Tokenization
If you want to capitalize on asset tokenization, I encourage you to research Ravencoin, tZero, and to follow the content produced by the Security Token Show. Also check out the article titled, The Promising Future of NFTs. We are so early in the NFT and asset tokenization space that anything could happen, but chances are that what is going to happen will be very big!