The price of innovating early can be a real bargain, or it can be a total stooge. Like all things, value depends more on long term utility than hype. If you buy something hoping someone will pay more later, what you’ve bought is hype, even if you succeed.
If you’ve been watching the NFT space closely, you’ll have noticed people taking death defying leaps into the financial unknown. It has artists making big coin (crypto of course) in a burgeoning hot market and it has corporations buying from massive cases of FOMO.
To bring you up to speed, In just the past month, total sales of NFTs topped US$1 billion. It seems that 2021 will be the year of NFTs Most notably, Visa purchased a Crypto Punk for approx. US$150,000 (or 49.5 ether) for their collection. The picture on this blog is Crypto Punk #7804 which sold for a cool $7.6m USD. While a Coca-Cola NFT auction fetched more than US$575,000 for digital collectibles. And a teenager from London collected $350,000 for his Weird Whales collection. And if you think this whole thing is weird, the largest art museum (The State Hermitage) in the world is about to Auction NFTs for actual Da Vincis and Monets. We are giving birth to the metaverse.
I recently auctioned my first NFT. It was a digital version of my tech TV show – The Rebound on Channel 9. But rather than just sell a digital piece of art, or a gif – I attached a smart contract to it, which gives the winning bidder the right to appear in 8 episodes of the show next season to be mentored, which will reach around 800,000 people nationally.
The winning bidder paid just under 1-Ether for the crypto episode – around $4,000 AUD. This was a total bargain.
The cost of paid TV space with this reach would be well over $100,000 – they got it for 4% of its market value. In their case, the price of innovating was very low indeed. And this is not some imagined value in the future where a greater fool pays more – it’s worth that now, today.
Some of the prices people have paid for NFTs I think is foolish. Especially given the value is largely in their mind. Likewise, we mustn’t forget that this is often the case with premium products. How much better is a top of the range Mercedes versus Toyota? It’s also worth remembering that many of the people purchasing NFTs for high prices are doing so with Crypto they’ve help for a long time which now has a high market value, but it wasn’t really money they had to sweat, to get! Easy come, easy go. The best way for normal people like you and me to participate, is with our time and small amounts of money. We mustn’t write it off as a bubble, but we should also tread carefully.
Where this will go, is into a world where everything physical has – Meta Benefits – benefits attached to crypto tokens which prove ownership. Just like my TV show NFT – the owner has the proven benefit of appearing on the show. Anyone selling anything physical, should be thinking about how to tokenise what they sell, and how to enter the metaverse.
I had an Interesting chat with Steve Vallas, the CEO of Blockchain Australia on the future of Crypto and BlockChain this podcast. A great way to get up to speed is at the upcoming NFT Fest – it’s free to register and will really open your mind to what’s coming.