If you are asked to describe last year 2021 in one word, what would it be? NFTs. Yes, that's what it should be. I mean, the Mirriam-Webster word of the year for 2021 was NFTs. Non-Fungible Tokens and the hype around the Metaverse an off-shot of NFTs has set the stage for a real windy revolution that will soon be sweeping.
Not shy to say I'm bullish — we haven't even scratched the surface yet.
I think NFTs are gonna blow this world up, and I'm particularly excited because crypto natives are the Generals mapping the siege and inevitable takeover and not the corporate mafias of the Web 2 economy that are currently turning their attention to Web 3.
I understand it's easy to dismiss my enthusiasm as one crypto native trying to force his fanatical belief on another. Sadly, this is what most folks here in the space do. Always quick to throw the "ngmi" word if you have a differing view. But let me break it down for the regular crypto native who might not know how to defend their beliefs on NFTs or the regular doubting mainstream Thomas who just thinks everything about NFTs is a bubble waiting to get burst.
NFTs have been here forever; you just haven't noticed.
My grandpa once wrote a note for me when I travelled to the hinterlands as a kid. Unfortunately, that note is no more. If I still had that note, it would be one of the rarest notes from my grandpa with his handwriting. To the best of my knowledge, no document exists today with my grandpa's handwriting, who was pretty much famous and dear to the hearts of many others. Now, imagine if I still had that note or a photograph of the original copy. I create a certificate of ownership for that digital image and sign it with my digital signature and place it on an immutable digital ledger like the blockchain. That piece of data remains on the blockchain with a timestamp to show I own it and when. That would qualify as a non-fungible token, and it's just one of the few examples of what NFTs are. And just FYI, my grandpa didn't write my name on that note. So why can't anyone else claim it's theirs or just secretly copy it and pass it off as theirs. It doesn't matter how many copies of my precious grandpa's handwritten notes are made; anyone can verify the original version and see that I own that note. We can now prove who owns something that exists entirely on the web for the first time. Aah! Do you see the revolution, mate?
The example I put up above is striking as I had once attended a discussion in Clubhouse where we discussed NFTs. One of the speakers, who is a crypto native, by the way, disqualified NFTs as anything special but a vehicle for money launderers. He just couldn't fathom why anyone would splash six-digit figures in dollars or more for a mere JPEG, most of which mainstream artists would describe as "ugly." But we will get to that in a moment.
Now, how much would you trade your precious wedding ring for? Let's imagine for a moment that money is not an issue or the strong need to pay an important bill, so again, how much would you trade your wedding ring? This question stems from the fact that your wedding ring has perceived value, not so much of the precious metal it is made from but the memories attached to it. That in itself qualifies it to be a non-fungible thing that, if tokenized, becomes an NFT.
Beyond digital arts, NFTs are birthing utilities that are redefining relationships and communities
The image you put up on your social media platform gives us an idea of what you look like and who you are. Also, NFTs are birthing a new set of identities and community relationships. It is easier to stay anonymous online while still having an identity simply because you identify with an NFT society and have a PFP NFT as an avatar. Let's take a look at a community like Bored Ape Yacht Club. Owning one of their avatars gives you exclusive access to their community. As a part of the community, you enjoy airdrops, invites to exclusive whitelists, tokens, and more. Most importantly, having a PFP NFT increases the relational value as people can tell the community you belong to just by looking at your avatar, making NFTs of social value.
Some individuals are beginning to mirror their identity after the NFT they own. For instance, Richerd, an OG CryptoPunk owner who is widely known for his 3D glasses. These are some of the rarest Cryptopunk traits, and in the real world, Richerd has mirrored his identity after the NFT wearing 3D glasses. To further show the value he placed on his avatar; he declined to sell it to POAP for 2,500 ETH, the equivalent of $9.5 million. At that time, If he had accepted, it would have been the largest on-chain CryptoPunk sale in US Dollars.
Naysayers will always Naysay
While more communities build social identities around NFTs, Bitcoin Maxis have never hidden their disdain for crypto trends such as NFTs or Memecoins. Crypto skeptics and nocoiners may not believe in the idea of decentralized money, but Bitcoin Maxis do not believe that any NFT holds water. To them, it is bitcoin or nothing! Since NFTs cannot be copied, most Bitcoin Maxis are trolling NFT holders for their belief in Digital JPEGs. For instance, a Twitter user made fun of Reddit co-founder Alexis Ohanian by saving a copy of Ohanian’s avatar image. NFT PFP is common among NFT holders, and Ohanian's avatar image was a cartoon of a slack-jawed ape wearing a propeller hat. The user posted the image as a comment on one of Ohanian’s tweets with the caption, “Mine now.” Since NFTs are non-copyable, within this context, the user was “stealing” Ohanian’s profile picture, which Ohanian had bought on the blockchain for more than $7,000. The response the troll got was simple— “Original Mona Lisa only gets more valuable every time it’s copied and shared.” Such a classic response from Ohanian!
While it may seem that NFT holders are getting mocked or that copying and using an NFT avatar as PFP makes it useless, it gives it more value. Although this argument may not make hard sense to anyone, to find out which of the avatars is original, you'd need the blockchain certificate for that. This has not stopped people from partaking in NFT avatars. For instance, Bored Ape Yacht Club’s (BAYC) initial batch of N.F.T.s brought in more than two million dollars. Since its initial launch, the collection has traded about a hundred million dollars with the cheapest apes often going for almost fourteen thousand dollars. The need for NFT avatars amongst crypto enthusiasts has reached a mania high, all thanks to NFT avatars.
With corporate guys heading the show, NFT hype may be going the wrong way
Loads of celebrities are getting into NFT, from Snoop Dogg to Tom Brady, who has founded a sports NFT platform and Jimmy Fallon getting into the Bored Ape Yacht Club. Athletes and entertainers alike are creating a wave and spreading awareness of digital collectibles as they buy or sell. Now the question is —is this good for the NFT market, and what is the impact of these celebrities and their purchases on the NFT market?
As it is, big corporations are "aping" into NFTs. Facebook has earlier launched Metaverse in 2021, which will enable users to build NFTs in an alternate universe. However, given the history of Facebook with managing data, you're not crazy to be skeptical of what Meta rolls out. Many corporate businesses are also announcing their entry into NFTs following a similar pattern. From Coinbase to Adidas down to Budweiser, everyone wants a share of the NFT market. However, what most of these corporate businesses fail to understand is the fact that NFTs are more of a social statement. So rather than launching an NFT project that is non-specific and marketing the hell out of it, they should seek to understand the community aspect of NFTs. It wouldn't hurt to pitch their tent with an existing NFT community —Cryptopunks, BAYC and many more are still welcoming new members, corporate or individuals, aren't they?
NFT projects are centred around innovation, community and scarcity. NFTs are social currencies and should be treated as such. Bored Ape Yacht Club NFT understood this concept and has been able to create a community around its NFT profile picture project with 10,000 ape cartoons of different rarities. True, the art itself may not fall under the category of "beauty", but it is designed to be an inside joke that only club members get —such mythical legends that get even more powerful with flavours of esoterism sprinkled around it.
In addition to not having a firm grasp of the community nature of NFTs, most traditional marketing firms treat NFTs like the corporate brands they deal help promote. It's bad enough that brands with no business creating NFTs are already doing so, it becomes worse when these brands have to market them like their product. For instance, an NFT version of a product may sell for way more than the physical product, and it doesn't even matter if this product is luxury goods. Big businesses moving into NFT should adjust their ethos to fit into the new sphere they are navigating and remember that good NFT projects take time to build.
What we have seen about NFT so far is just the tip of the iceberg
We are yet to utilize the potential of NFTs fully. Yes, I know that many celebrities are now involved in the NFT market, and yes, I know that the most expensive NFT Beeple, sold at $69 million—can you beat that? However, there is still much more to be explored. For instance, while some artists have managed to make thousands, or even millions, of dollars by minting and selling NFTs, others have yet to get started. To make matters worse, most illustrators and creators often find out, albeit too late, that someone else has taken their creation and shared it on Opensea. @NFTtheft, a Twitter account documents these scams of creators losing their works to nefarious characters who steal their art, mint it, and sell it for a hefty profit. If creators go the NFT route, the chances of protecting their creation and earning profitably from it become increasingly high.
We also see the possibility of a future where NFT ticketing becomes a thing. Look at it this way; you want to attend your favourite artist's concert and possibly get an autographed T-shirt from them as well; what if you get an NFT ticket, unique in its style that gives you a lifetime value? You get to attend a concert and get a digital asset as well. Also, NFT tickets would help solve the problem of reselling tickets and scams. In the end, it's a win-win for everybody. Celebrities like Gary Vee have already initiated NFT tickets with his Vee friends NFT. These tickets also double as 3 years worth of exclusive tickets to Vee Con.
There is more to the future of NFTs. With the launch into the Metaverse, the likelihood of a rise in artificial intelligence is very high. Now imagine that you have an AI-based NFT? These NFTs could live on your social media platforms or homes and interact as your personal AI. As it is, the future is not so far away as platforms like Alethea AI have already created a Metaverse filled with iNFTs called Noah's Ark.
You know how they say that data is the most valuable asset to have in a digital economy? With NFTs making plays into health and medicine, we are already taking control of one of the most useful data one can have—medical data. Aimedis is an eHealth medical platform that has built the first medical NFT marketplace making it possible for patients to tokenize their personal medical information and sell it to Big Pharma and medical research companies. Another cool thing is the Health Hero project created by Engin, a Singapore-based start-up. Health Hero is an NFT project that allows users to mint something called Well-being NFTs (W-NFTs) linked to their medical tracking devices or apps. They get to develop these NFTs by exercising, meditating, and eating healthy, giving their NFTs unique traits and making them rare and valuable. You can then trade these NFTs on any secondary market, and You get to make money by being healthy? How cool is that?
Do you see why I said I am bullish about NFTs? They go beyond just JPEGS on the blockchain and canvas digital identity, asset fragmentation, play to earn gaming, theft prevention, ownership, and more.