Value, NFTs, Crypto, and SMUFTs
In early 2021 I started #SMUFT (Super Mega Ultra Fungible Token) in a Merry Prankster spirit to explore of the world of NFTs, crypto, and the human perception of value.
I created basic instructions and a #SMUFT blank:
I also created a few #SMUFTs, and invited other creative types (with a sense of humor to join in):
In order to kick-start the #SMUFT economy, each #SMUFT was deemed to have a nominal value of one SNARGLE. Given the largely unknown nature and value of a SNARGLE, I also created an opening range of #SMUFT pricing from $0.00 — $0.99 (or one amazing bean and cheese burrito).
As of April 2022, 51 #SMUFTs have been created, accepted, and published as official #SMUFTs. That makes #SMUFT more rare and scarce than all of the 10k projects (51 < 10,000).
All the #SMUFTs remain in the nest, not yet on any blockchain, and not yet for sale in the way of other NFTs. Please note the interesting conflict created between a Super Mega Ultra Fungible Token as it may one day transform into a Non-Fungible Token (this feels cataclysmic and may have many rippling effects).
This brings about an interesting series of philosophical questions:
What is the intrinsic value of a #SMUFT?
What is the NFT market value of a #SMUFT collection?
Why do NFT’s have value at all?
What is value?
What is currency?
Why do cats always play a role?
Let’s take a look at some high-flying NFTs and the value ascribed to them by someone (usually that someone has a lot of $$$ to burn).
Our friend the Nyan Cat (here in all of its glory) was sold for close to $580,000 USD in May of 2021.
The Crypto Times reported that Bored Ape #8817 sold for $3,408,000 USD as of March 2022 (this may have changed by now).
Let’s compare Bored Ape #8817 to the lowest median incomes in the US:
The median US income level is $57,652 USD. The lowest on the range is $3,194. In current NFT/Crypto theory, Bored Ape #8817 is worth the yearly income of 59 US families, or 1067 familes at the lowest income poverty bracket.
Now let’s compare #SMUFT 000000000008 to Bored Ape #8817:
Perhaps our friend Bored Ape #8817 is worth millions of burritos because mammals conqured the planet? The big dinosaurs all died off from asteroids or floods or something nasty. So our chrome T-Rex really can’t make the cut, because mammals > dinosaurs.
But wait…why is one ape worth more than 1067 low income families in the US? Especially when our ape is…a JPEG?
JPEGs are cool — but are they that cool?
But maybe Bored Ape #8817 has other value. Perhaps it means that I own a key to unlock a secret door? A special club? Does it signify that I am the coolest cat (sorry Nyan Cat) on the block?
But wait. #SMUFT also has cool cats:
Maybe I am missing something here. Perhaps Bored Ape #8817 represents the ultimate in brand luxury. Surely it must be cooler than the Aston Martin Valkyrie?
So let’s do an apples to apples comparison:
The Aston Martin is a pretty awesome looking. A very mighty JPEG. And it comes in this cool Marvel superhero green-black vibe (or DC, if you are a DC fan). Now you can own this Aston Martin Valkyrie for around $3 million USD. That is a pretty good value for a really killer looking JPEG.
But wait — if you do a little bit of research, it turns out that for the same $3 million USD Aston Martin not only gets you the JPEG, but you get an actual real car. A seriously insane and badass car. One of the coolest cars in the world. If you do a little bit more research, you will also realize that acquiring an ape JPEG does not get you a live ape, or even a circus monkey (realizing that these poor creatures should simply be left alone to live their lives in the wild).
Let’s do a little math.
You have $3 million USD (cool) to buy something interesting. You probably also have tens to hundreds of millions in the bank (or ETH), billions maybe, if you are spending millions on these things.
You can get a JPEG of an Aston Martin Valkyrie + the actual car.
Or, you can get a JPEG of an ape wearing a propeller hat (no car, no ape, not even a circus monkey).
Or, you can use that $3 million USD (if you have that much money to burn) to help feed and improve the lives of dozens, perhaps hundreds of familes.
But I think something very big was missed. Is Bored Ape #8817 a Noogler?
Given that the market cap of Google (actually Alphabet) is around $1.67 T USD (that’s trillion) — perhaps that explains everything!
A summary of value:
(1) A Noogler ape JPEG is worth more than $3 million USD.
(2) For that amount you can get an Aston Martin Valkyrie JPEG and the actual car!
(3) You can also get 5–6 Nyan Cats (maybe there is only one) — JPEG only, no actual cat, no rainbow.
(4) You can support dozens to hundreds of poor people (food, water, work, healthcare, education).
(5) You can get X #SMUFTs, X being the great unknown. Perhaps X can be used to help (4)?
Makes sense?
I will pause for now to wallow in the Sea of Tulips and Confusion.
R. Abovitz
April 21, 2022
Earth
