Will NFTs be worth anything?
NFTs are not like a stock or a bond where you generally know the intrinsic value of that investment.
Remember that NFT of Jack Dorsey’s first tweet? The one that went for $2.9 million? Turns out it’s a little hard to flip. Market value, it turns out, is not unlike fairies in Peter Pan. If sufficiently large numbers of people believe something has value, it will have value as a social, if not quite objective, reality. Well, that or market manipulation, which is rife in crypto.
The infamous USD 2.9m Twitter NFT is up for sale and has thus far received a top bid of USD 6,800 (i.e. 0.23% of the original purchase price).
To many, NFTs are one of the most overhyped (and overvalued) fads we have ever seen.
Digital collectibles might be here to stay, especially ones that can be used in the gaming world, this is yet another Blockchain-based innovation that started with (some) good intentions that has completely lost the plot, especially in terms of valuations.
In reality, the only people who are making real money from the NFT craze are:
- 1. Artists / creators with social media firepower (either their own or via others)
- 2. NFT intermediaries / platforms
I don’t blame the artists / creators for wanting to mint them: it’s a no-brainer source of additional revenue for painters / content creators / musicians / museums, many of whom struggle to monetize their REAL work.
As platforms like OpenSea don’t charge anything upfront for people to sell their NFTs. I.e. they simply take a commission on sales. Moroever, it’s very easy / cost effective for artists / creators to create and sell them. And with so much demand in the market over the past 1-2 years, the business case for intermediaries has been crystal clear.
Could this be the catalyst for a major correction in NFT valuations in the coming year?
A loto f retail investors sucked in will lost a lot of money. Especially by those social media ads featuring some person in his new Lamborghini.
If you have a spare USD 2.9 million to spend on bragging rights for something with absolutely no utility. And whose value is 100% speculative. Furthermore, based solely on “what other people are prepared to pay for it.”
As a result, prepare to potentially lose everything.
And this is the real reason why the cryptoverse requires all of us to put our hands together and chant, “I do believe in crypto! I do! I do!” Not because it solves any pressing real world problems. If anything, it contributes to pressing problems such as global warming.
But hey, if we all do everything through mining in an imaginary decentralized and democratized fashion (the amount of centralization and oligopolistic power in crypto makes the financial sector look downright progressive), global warming will not be a pressing problem anymore because it will be a hopeless one.
Will NFTs be worth anything?