Last month, the NFT platform OpenSea.io processed more than $3 billion in NFT-related transitions on its platform.
Despite the complaining, mostly from those who don’t understand the technology, crypto backed assets like NFT are soaring in demand and making some people real money.
Nonetheless, the trade in NFTs — which can see single JPEGs sell for half a million dollars — is considered a vastly inflated market, a casino for high stakes crypto rich gamblers.
There are those with strong track records in finance who should be able to discern a turkey when they see one. Coinbase co-founder Fred Ehrsam (also co-founder and managing partner of cryptocurrency investment firm Paradigm) is interviewed in depth by Vanity Fair, and NAB Amplify talks with Nigel Green, the CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations.
We’ve edited the Vanity Fair interview for highlights, followed by NAB Amplify’s talk with Green below. Both believe NFT and crypto are right on the money.
Is the NFT bubble about to burst?
Ehrsam: Digital ownership is a long-term trend that is here to stay. Kids today will eventually own more digital items that look like NFTs than physical items. At some point, they’ll also stop opening bank accounts and just have crypto wallets that are free to download and work interoperably with everything on the internet.
My partner, Matt Huang, likes to say the speculative casino aspect of crypto is actually a Trojan horse with a new financial system inside. Even if some of the behavior seems silly at the start, the paradigm shift in infrastructure isn’t.
READ MORE: “Imagine if the Mona Lisa Was Digital and Then Auctioned On the Internet”: The Only NFT Explainer You Really Need, From a True Believer (Vanity Fair)
There’s lots of talk [of] “this won’t last,” indignant questions of “why does this have any value?,” or people from the traditional art world rejecting it or trying to make it fit within their framing of art. But it will work, and it’s about so much more.
What happened last month that drove NFT sales into the billions of dollars?
Like any powerful new technology, there comes a point where the mainstream glimpses importance for the first time, and that has happened this summer for NFTs.
Concretely, people are loving profile picture NFTs like CryptoPunks, which have driven a lot of the volume. Another factor was the invention of fractionalization of NFTs, splitting them into little pieces of ownership. This allows a bunch of people to participate instead of an NFT selling to one person with deep pockets. This is not only driving sales, it’s also creating new social groups amongst owners. To visualize this, imagine if the Mona Lisa was digital and then auctioned on the internet where anyone could buy a small slice, and everyone who bought a piece was now part of a big group chat.
What comes next after NFTs?
We think about crypto developing in three stages: first as a new digital money, second as a new financial system, and third as a new internet app platform. As a new digital money, crypto has gone from zero to over $1 trillion over the last 10 years. As a new financial system, decentralized finance (or DeFi) came on the scene about three years ago and already has almost $100 billion of user assets. As a new internet app platform, NFTs are a glimpse into the third stage: a next generation of mainstream consumer apps built on crypto rails — the social networks, games, and more of the future.
The Hype is Real
Now here’s Nigel Green, the CEO and founder of deVere Group. He runs business in more than 100 countries worldwide with $12 billion under advice.
Aside from digital collectibles, what other ways do you see NFT as the basis for new revenue streams/business models?
Nigel Green: NFTs allow companies to engage in new business models, further the proposition of existing products and services, as well as to enter into new markets. They also offer fresh methods to invest in projects and new digital trade and commerce opportunities.
For example, NFTs can be used to create a virtual retail experience for shoppers; they can be used to collaborate with other brands; and they be used to heighten awareness on social media, therefore driving up revenue.
It’s hard to overplay the impact that NFTs will have on business models in the future as our digital lives and real lives increasingly overlap.
NFT and crypto is said to be key to democratizing the media value chain and disintermediating conventional distributors like studios. Do you believe the hype around this?
All major businesses will move into this space including major entertainment and media brands. They know this is the inevitable future and are moving apace to be early adopters. The hype is real, and they see the value in it.
With NFTs, we are experiencing the meeting of an internet of information with an internet of value, which is drawing in large investments coming from multinationals, funds, and VC firms, amongst others, into the market.
Are NFTs just more hype, or are they actually the building blocks of the creator economy? Understanding blockchain technology can seem like a lot, but NAB Amplify has the expert knowledge and insights you need to remain at the top of the intersection of art and technology:
- NAB Amplify’s NFT Primer
- What’s the Real Future of the NFT Crypto Art Market?
- Weird Science: The Connection Between NFTs and… Human Nature?
- What Is the Value of an NFT?
- NFTs: Content Strategy or Digital Craze?
However, the market remains young and highly speculative and caution should be exercised. It can be expected that some of the NFTs on the market now will have little value in a few years. But some will be worth a fortune. It’s a similar situation to websites in the early days of the internet.
As with any kind of investment, the key is being able to pick the winners and avoid the losers in what is a volatile market driven by fast-changing trends and tastes.
Will NFTs create a space for new forms of content to be created?
Without question, NFTs and cryptos will create new forms of content, in fact they already are doing so. The major areas that will be impacted moving forward will include gaming, advertising, music, art, fashion sport and social media.
Do you have any advice for content creators looking to engage in this field?
Content producers need to apply the fundamentals of all content creation when it comes to NFTs. These include creating a compelling hook, providing something that will engage and chime with the core market, something that is different from the rest on the market, and using your unique brand values. If content creators stick to these rules, most pitfalls should be avoided.