For some reason it seems like NFTs have entered into the collective consciousness of my network this week. This was a new concept to me (not completely actually; a friend of mine had bought a few of the first couple generations of cryptokitties. We all poked fun at him at the time because it seemed so ridiculous - spending money on digital cats?? - but lo and behold in 2021, the company behind arguably the most popular NFT at this time, NBA Top Shot, is built by the same company that CryptoKitties was. Turns out he was on to something).
I totally missed the boat on cryptocurrency. I actually tried to buy some Bitcoin back in the summer of 2013, and set up a wallet and everything. I had a blockchain.info wallet and apparently an account at Mt. Gox according to some notes I kept on my old laptop. I’m not actually sure if I actually bought any, but given I am a cynical consumer I probably only bought a few hundred dollars worth max. Either way, I’ve seemingly lost the password. This was before password managers, and I hand rolled every password. Maybe someday the password will come back to me…
Back to the point. I missed the boat on cryptocurrency. This was clearly wrong at the time (and continued to be wrong up until this point), but I felt that cryptocurrency was another fad technology. It may turn out to be still. But as large institutions begin to legitimize the sector, it seems like it would take a drastic event to disrupt the steam it’s been gathering.
I felt it was a fad because at the time I first learned about it, it seemed like new technology fads were rising and falling all the time. IoT was supposed to be big. VR was supposed to be big. To be fair, these will probably be big in the long term and likely more prevalent than we realize in the short term. It’s just that for the time, they over promised and underdelivered, and the result was underwhelming. It shaded my thoughts on cryptocurrency, and required me to wait until it crossed the chasm.
So how does this relate to NFTs? NFTs are powered by the same technology as cryptocurrency, and fall into a similar category: digital-only assets. One is not an extension of the other, but they both inherit from the shared ancestor of the blockchain.
I started writing this post last week, when I first started looking into NFTs and being excited by the premise. There’s some Baader–Meinhof phenomenon going on here, but even since then I’ve seen a noticeable uptick in the excitement around NFTs. This is reflected in the prices of the most popular NFT right now, NBA Top Shot. Just last week, there were NBA Top Shot Moments selling for $3, $5, $7, or in the low $10s. Those same moments are now $20, $30+, and there’s no moments for sale less than $10. These are smaller numbers, but they represent huge changes in value. One anecdotal outlier is a Tyler Herro Moment that I bought for $7. I sold in on 2021-02-21 for $103, and a day later, the market is selling that at $199.
That might not be just be a noticeable uptick due to excitement: that might be a bubble. That means there is certainly excitement, but excitement at making a quick buck. The prices will eventually fall (I’d have to think), but hopefully NFTs are around to stay. There’s something exciting about the collectible nature and the use of the block chain for something other than currency speculation (cryptocurrency is legitimizing, but over the last few years there’s been a speculative frenzy).
Collecting things is fun! Embarrassing secret: I used to be obsessed with collecting Mighty Beanz when I was a kid. Why? Literally no idea. They didn’t do anything. They were like the dumbest toy ever. But they had a deal with Marvel where they produced versions with all your favorite superheroes, and that was cool to me at the time. I’ve also collected all the Captain America comic books from when he was resurrected from the iceberg until he was killed (spoiler alert). There’s something in my brain that wants to collect everything, complete the set, hit 100%. NFTs unlock something similar.
So, I get it. I felt an excitement that I have to imagine people who got obsessed with cryptocurrency early did: realizing what a new technology was and imaging all the possibilities of what it could do. Will they feeling be around to stay? Who knows. Is this just a fad use case? Who knows. But, at this point in time I understand that enthusiasm around NFTs. I’m excited to see where the category goes from here.