Feb 13
The Non-fungible Token (NFT) Dilemma: Cash Cow or Money Pit?
Footballing megastar Neymar Jr recently bought his (BAYC #6633) for $453k. NBA Allstar Steph Curry got one (BAYC #7990) for $180k. And EDM artist Steve Aoki just purchased his eighth one (#9309) at $310k. If you have no idea what I’m talking about, you obviously haven’t been following the crazy world of Bored Ape Yacht Club sales lately. Who or what are Bored Apes? — I hear you ask. They are a very hot commodity in the non-fungible token market right now.
What is a non-fungible token?
But if you haven’t heard about the phenomenon that is NFTs before, don’t worry. Neither had I. You see, I was someone who heard about this new thing called cryptocurrency way back in the day. And I just wrote it off as nerdy tech talk. Only to see crypto really take off and make a whole lot of people very rich, whilst I sat on the sidelines with a very bad case of FOMO. Now I am hearing about non-fungible tokens and my research is telling me they are going to be worth a lot more in the very near future. However, there is also the very real possibility that they will amount to nothing more than insanely overpriced GIFs. So, the question remains — non-fungible tokens (NFTs): cash cow or money pit?
You may be wondering, just what are NFTs? Let me explain. Non-fungible tokens are one-of-a-kind digital assets whose ownership is verifiable on the blockchain. And, according to experts, they are set to become the currency of the Metaverse. Excited yet? Hold on to that thought just for a moment.
Are they worth all the hype?
There exists a potential problem with non-fungible token oversaturation in the marketplace at the moment. Leading some to ponder whether or not there really is a lot of value to be had in a 10,000-piece collection of cartoon monkeys all facing the same direction but wearing different hats. Sure, you might be the proud owner of a very expensive NFT artwork, but what is stopping someone from right-clicking and copying that very same image and claiming it as their own?
And the answer to that question is why I think NFTs are here to stay. Sure, you can pretend BAYC #9055 is yours but the blockchain would say otherwise (it actually belongs to, Eminem).
Final thoughts
When we’re all living out large portions of our waking life in the Metaverse, we will need a currency that is non-replicable and authenticated. By their very nature, NFTs fit the bill. Non-fungible tokens will power the way we shop, pay bills, have unique experiences, and buy and sell in the Metaverse. They will become the agreed-upon currency that people will use to create an exciting new economic model based on free trade. In my opinion, non-fungible tokens will be a core driving force in the massive movement that is beginning right now towards online decentralization. To answer my own question — is investing in a non-fungible token (NFT): a cash cow or money pit? I’m going to have to say neither. They are an opportunity. And just like any opportunity, you have to speculate to accumulate.
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