A Good NFT Investment – Digital Marketing Futures
What makes a good NFT investment? I don’t think it needs explaining what NFTs are anymore, if you’re paying attention to the crypto business landscape and you have any inkling about Blockchain you probably realize by now something is going on in the same manner that the Internet came of age and before you knew it you were deeply immersed in it. NFTs are non-fungible tokens, fungible means, something that can be changed, non-fungible means it can’t be changed. The Blockchain creates a ledger with encrypted keys that each time anything changes, a recording of what was changed is added, and then all that information is transferred to the next entry. If a sale, transfer, update, or any alteration of the digital item is made, the ledger is updated, this makes NFTs secure and inherently adds value to them because now each of them is unique. Each time a collector of baseball cards finds what they consider a rare or valuable card, the first thing that has to happen is it has to be authenticated and verified. As much as they try there is still doubt as to whether this is what they think it is, is it really 40 years old? is it an original? has this been altered in any way? With the Blockchain there is no second-guessing this information, it is all recorded there in the ledger.
A New Era
So, we are in an era where digital items like music, videos, photographs, artwork, and information like Jack Dorsey’s tweet that sold for $2 million have intrinsic value. Most of us have understood digital as something that can be created and copied unlimited amounts of time so why all of a sudden with the addition of a ledger in the blockchain are the same digital items now considered more valuable? Well, it comes down to authentication, perception, and scarcity. Why are houses in my neighborhood now worth $1 million when they were only worth $400 thousand only 3 years ago? It’s because there are a few of them and the perception of the neighborhood is that it will continue to be a safe place to raise a family and there are very few on the market for sale, so this demand raises the value. When we sell a home we have to authenticate that we own it and have the right to transfer ownership.
Beeple NFT Art
Beeple’s digital art sold as an NFT, at Christie’s auction house, for $69.3 million this is just the tip of the iceberg for NFT investment. There are ways that NFT will be utilized in the future that has not yet been dreamt up. Let alone, the number of times this NFT investment will change hands. With the stock market and real estate prices at all-time highs, investors who are flush with cash are looking for other items to add to their portfolios. For the rich, cash in the bank just costs them money, so NFTs are the new alternative investment that they hope will bring dividends as they raise in value every year. I imagine the owner of Beeple’s digital art “The First 5000 Days” will eventually charge people a fee to enter and view it with other NFT art in an online virtual art gallery using technology like Oculus Rift or other VR tools to have this new experience.
As an investor what makes a digital item valuable is obvious quality, notoriety, and a fanbase that creates more demand. Other factors such as is the digital media evergreen, is it still in use? This plays into the value of an item. Imagine owning the rights for an NFT of the Nike logo or even the Superman logo? These are items that over time continue to instill value, people are willing to pay for them again and again. Even though the music industry thinks this will be a game-changer for them, the issue comes in that most music is throwaway and has a very short lifespan, probably out of 100% of the music created less than .001% will ever have any long-term catalog value. Individual songs are generally much more valuable than albums unless they are classics. They have to have artists tied to them that are noteworthy and it also has to have a cachet based on the success of it when it was first released. I imagine an NFT of E.T. and other classic movies will be auctioned off in the next year. If owners of digital media want to instill more value into their NFTs they need to consider adding things like never released photos to music works, handwritten lyrics, something few if anybody else has. Also, raw, unedited files, again rare and unique. For trading cards add a signature of the designer with dates and unique identifying information.
We will also recommend a few items we think will have value over the long haul and be a great addition to your investment portfolio. Full disclosure, we have an ownership interest in some of these and use them as references and show where we believe the value and additional interest is. Here are a few links, we will add to these as they expand.