When Coinbase co-founder Fred Ehrsam said in an interview with Bloomberg TV on Wednesday that 90% of NFTs would eventually be worthless, “I would back him up and say he is correct,” noted Ian Faith of GCG. “But this isn’t because the concept of NFTs are the issue it is because of the following 5 things.”
- Business fundamentals. Like most things in life and let’s use music, songs, artwork, inventions, etc., most of them hold no value immediately or over the span of time.
- Crypto opportunists. If you use fringe Cryptocurrencies and exchanges to purchase an NFT if the value of that Cryptocurrency tanks then yes your NFT will have no value.
- Misconceptions. I get calls every day from people who do not completely understand what an NFT is, the most common issue is them telling me that they think an NFT is “Digital Art” and (See #1) most art is not worth anything in dollars let alone crypto.
- A fundamentally sound NFT offering. When you decide to offer something as an NFT you have to take a long-term view of it and this will attract investors and buyers who will also take a long-term view of it which will, in turn, instill value in your NFT. Think about what you are offering, is there more in the metadata that adds value, is there a physical item that complements the digital. Is there something tangible contracted into the NFT?
- The Ethereum blockchain is the established leader. Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. After Bitcoin, it is the second-largest cryptocurrency by market capitalization. Ethereum is the most actively used blockchain.
AT GCG we turn away fast money projects from NFT opportunists and focus on sound brand projects and catalogs. When history writes the headlines our NFTs will be part of the 10% and we will happily let the others squabble over the 90%.
Highlights and takeaways from Fred’s interview with Bloomberg TV.
- Coinbase co-founder Fred Ehrsam said 90% of NFTs would be worthless in three to five years.
- Ehrsam said that people shouldn’t dismiss the meme crypto token dogecoin.
- He helped found Coinbase, the listed crypto exchange, but left in 2017.
- Ehrsam also described decentralized finance as the “bleeding edge” of the blockchain world and said there was a danger that the US would get bitcoin regulation wrong.
- He added that Elon Musk and Bill Gates should reconsider their criticisms of bitcoin’s energy use.
- “I go so far as to say that 90% of NFTs produced, they probably will have little to no value in three to five years. You could say the same thing about early internet companies in the late ’90s too, though.” – on nonfungible tokens, or NFTs.
Susan Li from Varney & Co on Fox Business noted very astutely that with China all but banning cryptocurrency, this should be a moment when the USA takes advantage of the short-sightedness of China. China fears losing control and if Cryptocurrency loosens the government leash then that is a good thing.
Fred” Ehrsam is an American business executive and investor who is the co-founder and managing partner of cryptocurrency investment firm Paradigm. He is also the co-founder of the cryptocurrency exchange Coinbase.