LeBron, the artists, two steaming pizzas. A short guide.
On May 22, 2010, the Czech programmer Lazlo Hanesh worked with such passion that it was only towards evening that he realized how hungry he was. The guy wrote to a friend and asked him to buy two pizzas at Papa John’s. As a thank you, he sent 10,000 units of new digital currency. It was worth nothing then, but Lazlo believed that the whole world would use it in the future. Hanesh guessed right but was very wrong with his gift to his friend. After all, today, this compliment is worth $ 600 million! Although the Czech does not seem discouraged, he went down in history as the first person who used Bitcoin to buy a material thing.
The history of money has thousands of objects of various origins and shapes. Seashells, obsidian, ivory, gold, paper, and more. All of them have one thing in common – human psychology. It is history that determines the value of an item. Well, the accompanying economic factors. Nobel laureate in economics Milton Friedman argued that tobacco was used as money in the early years of America’s colonization. They stopped when everyone began to grow it, and the supply significantly exceeded demand.
Twins Cameron and Tyler Winklevoss came up with the concept of a social network. It was taken by Mark Zuckerberg, and he founded Facebook. The brothers were deeply offended and went to court. They got 65 million dollars as a result of the proceedings. The incredible David Fincher portrayed them in The Social Network as shallow golden boys, but in reality, they were not. The Winklevoss used the money from Facebook to buy cryptocurrencies, invested in 25 tech startups, and created the Gemini exchange, which trades digital assets.
One of the startups that the twins invested in is Nifty Gateway. This is a platform for buying NFT tokens using classic payment methods – Visa and Mastercard. At first, they sold all kinds of nonsense like memes and stickers. But now it’s an actual auction like Christie’s or Sotheby’s, where art is sold. Only digital art.
What is NFT
It’s probably time to explain what an NFT is. A non-fungible token is a type of unique cryptographic token. If one bitcoin is no different from another, like one Winklevoss brother from another, each NFT is entirely original. In the world of digital assets, it’s like a Van Gogh painting that cannot be faked. To verify the authenticity, you do not need to hire a squad of professionals. You just need to look at the entire history of the token on the blockchain. It is also unlikely to steal it – the asset is protected by a super-reliable private key, which only its owner has.
NFT is an excellent opportunity for the additional monetization of PC games. Imagine playing a game throughout the year. During this time, you have earned a unique titanium blade, dragon shield, and self-assembled tablecloth. Then you wake up, and BAM – the game does not work! Or you met the love of your life, with which you are no longer a gamer type of person. What can be done? Do you just forget about the whole year?
No, we’re not Marcel Proust. We don’t need to look for anything. They’ve already found everything for us. NFT marketplaces are an opportunity to trade and earn for everyone: the creators of these marketplaces, game developers, and the players themselves.
Developers can negotiate with other game developers for them to accept your dragon shields and titanium blades in their games. Then they will always have value. Imagine if you not only quit gaming for the love of your life but also buy her an expensive gift by selling your virtual clothes? In general, the result is an ecosystem in which everyone is happy.
The same goes for art items. Previously, the question was: can you draw? If so, create posters for movies and bookmakers. Do you want to create something beautiful? Greate. Now everyone can feel like they are in Paris in the 20s of the last century. In the sense that the creator’s work will definitely be seen. And if they are very good, they will sell their art. Graphic designers and artists, even in the most depressing places on the planet, are earning tens, if not hundreds of thousands of dollars with NFTs.
How Banksy was burned
American artist Mike Winkelmann (aka – Beeple), on May 1, 2007, began posting one image on his Instagram every day. Didn’t stop even on his wedding day and his children’s birthdays. Mike caught the attention of Apple, Nike, Coca-Cola, Louis Vuitton, and SpaceX, who periodically bought illustrations from him. But the pandemic caused a reduction in marketing budgets, and the artist was left without offers. Then he made an NFT from a collage of his first 5000 works, “Everyday’s”: The First 5000 Days. On March 11, 2021, it was bought for $ 69.34 million. This NFT became the third most valuable work of contemporary art sold during his lifetime.
If Winkelmann originally painted pictures electronically, Banksy is more of a traditional guy: he uses either walls or canvas. On March 4, blockchain company Injective Protocol bought a physical painting by a British artist for $ 95,000, made an NFT, and burned it! Now it will exist exclusively in digital form.
What the hell is going on?
COVID has locked people at home. They began to spend less on shopping and bars. The governments of developed countries (primarily the United States) allocated a lot of funds to support their citizens during the pandemic. Trading in the cryptocurrency and securities markets has become easier than ever before. The puzzle was formed, stock exchange indices went up, and cryptocurrency rates rushed to the same place. Bitcoin, Ethereum, and other top coins are constantly breaking new records. Even dogecoin has skyrocketed – a damn serious currency that comes from a meme.
It’s human nature that you don’t really appreciate the money that fell from the sky. Your assets have grown 6 times. What do you do next? Why not buy an NFT, brag to your friends that you are a collector of contemporary art, and then resell it profitably? The world has become one huge market. And NFTs are now part of it.
Why would anyone pay $ 208,000 for a LeBron James slam dunk NFT? That’s right, it is free on YouTube, and everyone can watch it for hours, weeks, months. But the guys from the NBA Top Shot platform managed to sell this and other basketball assets.
So what now? You can download Alex Morgan’s goal against England, make a token and buy an apartment in Manhattan? That is unlikely. Do you remember that the value of something is determined by human psychology? First, LeBron is significantly more popular than Alex Morgan. Secondly, the NFT from his video was made with his consent. Anyone can put a Bob Dylan song and Audrey Hepburn’s smile into a smart contract, but they will have no value. As with paintings, a reproduction may look no worse than the original, but if Munch did not touch this canvas, who needs it?
We can say that the NFT is a bubble. This has been said for 10 years about bitcoin and the blockchain. But these same people do not consider the dollar as a bubble and then complain that the food prices are growing faster than mortgage rates. We love to be skeptical about new products.
Right or wrong – it’s not for me to judge. But creative people should try to seize the moment. Why create a collage or verse for the sake of Instagram likes if you can try to monetize it and earn money. After all, it can then be spent on more creativity.