NFT's- The Hype

Can you make obscene amounts of money flipping NFT's?  Yes.  Can you lose obscene amounts of money flipping NFT's?  Yes, you can.  Can I verify Alex Becker made the $832,000 he claims in this video?  Not quickly.  But I'll give him the benefit of the doubt, because in late 2020 and 2021, a whole bunch of people from the crypto world have made thousands, and sometimes, millions of dollars, flipping NFT's.  Plus, all of the transactions are on either the Ethereum blockchain, or another one, so they could be verified with some research. If you don't know what an NFT is, find out here.

Disclaimer

When you hear about NFT's, non fungible tokens, and actually start looking into them, you first hit a barrage of hype.  Hype... and ridiculous amounts of money that many people have made flipping them.  If you search "make money with NFT's" on YouTube, it's likely a  Gary Vaynerchuk video will be at or near the top of the list, because of his huge web presence.  If you know who Gary Vee is, you'll likely know his roots are in selling baseball cards as a kid, and garage sale flipping later on, and soon learn he's all in on NFT's.  If you don't know who he is, you'll see a cocky, brash New Jersey guy who you'll think is just hype, and maybe blow off the whole NFT concept as hype.  The same goes with the Alex Becker video above.  The first time I watched this, I thought, "Who is this clown?"  Is this NFT stuff all a bunch of fucking hype?  When you get into that video above, you begin to realize he knows his stuff.

If you start with the "NFT art" search, you'll run face first into Beeple's $69 million sale of his piece "The First 5,000 Days."  That's the flag in the stratosphere screaming that NFT's are "real art."  Or at least real expensive art.  Your first question might be, "What the hell is a Beeple?"  That will be followed by, "Wait, some dumb fucker paid $69 million for a piece of art that doesn't even physically exist?"  It just doesn't make sense at first... or even at second glance.  

Then the jargon hits you with more insane prices attached.  Multi-million dollar Crypto Punks, Rare Pepe's, Crypto Kitties, some person called Fewocious, Bored Ape Yacht Club, Stoner Cats, Vee Friends, Doge Pound, and on and on and on.  Yes, people are paying hundreds, thousands, tens of thousands, and even millions of dollars, in crypto, for weird jpeg and PNG files, of art that doesn't physically exist.  And it's not just 12 bored billionaires buying these, there are maybe 40,000 or more actively in the game, and many more getting sucked in by all the hype.  

Then before the hype machine calms down, celebrity names start flying at you.  I already mentioned entrepreneur Gary Vaynerchuk, Mark Cuban is also in deep in NFT's and crypto.  Then come names like Mila Kunis, 3lau, Logan Paul, Steph Curry, Post Malone, Jimmy Fallon, Tom Brady, Snoop Dogg, Martha Stewart, and many more.  The NBA raked in over $100 million in 2021 with their Top Shots NFT series.  Dig a bit deeper and you'll find that Paris Hilton owns 150+ NFT's already.  She's been into crypto since 2014 or something.  WTF? Paris Hilton?  Even in our action sports world, Tony Hawk just had his second big NFT drop, working with Draft Kings and Autograph.  

Somewhere... out there on the open sea, there's this island where all these famous people and crypto billionaires buy these NFT things, at a broken down yacht club.  Then they go into some sand box in the metaverse and smoke cyber joints with Snoop Dogg or something.  Something like that.  What the hell is going on?  

It all sounds to ridiculous. Too ridiculous.  That's why I've spent the last six weeks digging deep into this world.  I dove down the rabbit hole and wandered all over the freakin' place.  But the tunnels keep going in all kinds of different directions.  Blockchains and smart contracts are the backbone if it all.  Ethereum, Bitcoin, Solana, and other cryptos.  DeFi, which stands for Decentralized Finance, a new wave of banking-type systems and technologies and platforms.  DAOs, Decentralized Autonomous Organizations.  That's a member owned organization with no one really running it.  Wait, isn't that what the Federal Government is half the time?  Crypto art.  Token drops.  Gas fees.  Community.  Eth.  Punks.  Apes.  Kitties.  And there are a whole big group of personalities, many with their own YouTube channels, spewing their thoughts on all these constantly evolving topics.  

It feels a little bit like Oz, as in Dorothy and Toto and the Wizard of.  Is there anything behind all this hype?  

Yes, there is.  Blockchains are a running, unbroken, openly recorded, decentralized series of transactions.  They are, so far, unhackable.  They make crypto "currencies," like Bitcoin, Ether, Dogecoin, and others possible. The Ethereum blockchain was engineered to allow "smart contracts" into these transactions.  An NFT is one of those smart contracts, tied to a digital file.  That file can be a piece of art, a photo, some text, a song or piece of music, a contract (like a real estate or car sale).  Once that transaction is tied into the blockchain, that file becomes the official one.  And that makes it rare.  

That's an NFT.  And rare things can be collected, sold, and traded.  We can all pull up a photo of the Mona Lisa on our phone or laptop.  You can buy a copycat Mona Lisa painting for $60 or so.  But there's only one real Mona Lisa painting.  That's rare, and it's worth a shitload of money because it's rare, old, and painted by Da Vinci.  The NFT technology makes one particular digital file rare, sets it apart from all the copies out there, and that changes the game in all kinds of areas.  

Art and collectibles are the beginning.  Your tickets to a football game or concert could be NFT's soon.  You driver's license or passport could be one some day.  You could sell your car or house with an NFT contract, in a day or two, before long.  You could buy "skins," weapons, or upgrades in video games that are NFT's, and then take them into other video games, because you actually own them.  Music is already being sold as NFT's.  

NFT's are a new technology for contracts, basically.  The can make one digital file "The One."  And that it going to change all kinds of things in our world in the next several years.  That's the technology, the "real" thing, behind all the NFT hype.  It's a crazy realm, it's moving very fast, and there's already an absurd amount of money circling around this world.

Are you old enough to remember the first video game?  I played Pong for hours as a kid, about 1977.  How about the first VCR?  First car phone or cell phone?  First personal computer?  The first home video camera?  Your first time on the internet?  The first CD or DVD?  Your first time on Napster?  Your first time on social media?  Your first time watching a YouTube video?  Your first smart phone with a camera so you could send dick or boob pics?  Gang changers.  NFT technology is one of those things.  It will change a whole bunch of "games," art and collectibles are just the start.  You'll have to learn it at some point, like a software upgrade or new social media platform.  In this series of posts on this blog, I'll share what I've learned so far.  You can figure out it it's time to learn more or not.  But now you know, there is something behind the NFT hype.  

Oh yeah... guess who made the very first Old School BMX NFT for sale.  I did.  It's on Rarible if oyu search "Steve Emig The White Bear."  One Eth, about $3,800 right now, plus gas/minting fees.  I don't expect it to sell anytime soon.  But someday it might...

 

What is an NFT- a Non Fungible Token?

It's always best to start at the beginning.  What is an NFT?  This video does a great job of explaining that in just under four minutes.  So here's where you start.  

A few months ago, I came across a magazine someone left on a bus, and there was an article about  some musician called 3lau (pronounced Blou), who made a bunch of money using NFT's to sell his music and art.  It had something to do with crypto.  As a guy who's been selling drawings, and making very little money, for over five years, I thought it sounded interesting, and decided I'd look into "these NFT things" when I got a chance.  Now I'm currently homeless, and haven't had a place to really work, or do research, for the whole Covid era.  I have had to charge my laptop at some plug somewhere I'm not supposed to, and then take a bus to somewhere else with wifi, to get online, until my battery died.  Then repeat.  I've been doing that for 18-19 months.  I couldn't get near enough time online to get much work done, let alone dive into serious research on anything to new to be in books. 

Six or seven weeks ago I heard of a library that was actually open inside, where I could once again sit down, plug the laptop in, and put in solid working time again, blogging, keeping up on social media, and researching things.  One of the first things I did was to check out recent Gary Vaynerchuk videos, because he is a great barometer of business in the digital age.  Gary knows what's happening, and what new things are starting to trend.  He had several videos about NFT's.  The first couple peaked my interest, so I started diving deeper into this weird crypto/art/NFT world.  I've been going deep in to the NFT research ever since.  In this series of blog posts, over the next several days I'll share what I've learned, and my thoughts on this whole crazy world. To understand what I'm talking about, first you need to have a basic idea what NFT's are, and the video above covers that.  So check it out, if these thing interest you.

CryptoArt Revolution documentary (Sept. 2021)

This recent documentary about the NFT/CryptoArt movement is only a couple months old, which is good in this fast moving movement.  The New York company Adorama put this out, and it's a very well produced, solid overview of what the NFT (Non Fungible Token) technology has made possible in the art world.  If you're an artist, photographer, writer, or musician who wants to learn more about what NFT's are, and how they're being used in art so far, check this doc out.  It's under an hour long, and a great place to begin learning.

For those of you who know this blog as an Old School BMX blog, mostly, you've noticed that I'm suddenly writing all about this "NFT thing."  Yeah, I started diving into learning about this technology a couple of weeks ago, seeing if there is something in it for small time artists, like me.  I'm still going hard with the research. 

Yes, when you google "NFT's," most of what initially pops up are the crazy prices paid for JPEG's or PNG's of pixelated zombie looking things, funny apes, and Beeple's $69 million auction price for a digital collage called "The First 5,000 Days."  I just found another article about Christie's Auction house selling over $100 million in NFT art this year.  Really.  And none of these art NFT's are tangible.  It's fucking weird.  That's the crazy side of the NFT/crypto art movement.  

But is there anything in this technology for a typical Esty-type artist, photographer, writer, musician, or designer?  Yes, I'm glad to say there is.  Here are the basics I've learned so far.

One: NFT's are a digital file tied to a blockchain transaction, which gives proven ownership.  That little thing is the magic.  It makes that one (or a series) of pieces of digital art rare.  And in art, rare stuff can sell for higher prices.  

Two: Pretty much any digital file of art, photo, video, writing, or music, (up to 30 megabytes, I think), can be "minted" into an NFT. 

Three:  This whole movement came out of the high tech/gaming/crypto world, which means there's a fucking shitload of money around NFT's and crypto art.

Four:  The price of entry is to 1) get some crypto, Ethereum in particular in an exchange, 2) open a wallet, and 3) join one of the marketplaces, like OpenSea, Axie, Super Rare, Rarible, Nifty Gateway, Foundation, or the others that exist. Then 4) Most important, do a whole bunch of research to learn about how things work.  Google or YouTube your questions, and dive in.  

Entrepreneur Gary Vaynerchuk, (who dropped a series of  10,000+ NFT's called Vee Friends, in May), says to do your "50 hours of initial research" on any new thing.  Then decide if it makes sense for you, or not.  That's real good advice.  

Five: Take a piece of your creative work on a digital file, and "mint" it into an NFT, which takes services fees and a "gas" (blockchain) fee, and show it off in the marketplace you chose.  

If you do that, will your artwork NFT sell?  Probably not.

Like selling art and creative work anywhere, you, or someone, still has to PROMOTE and MARKET your work to gain interest, and get sales.  If you already have a following, you need to see if any of them are into NFT's already.  Most average people are not.  It's still a very new and emerging thing.  

If you don't have a following, you need to begin building one.  The main market for small creator NFT's  (and the big series drops) may be a few of your current patrons, but more likely will be a whole lot of "traders" or "flippers."  These people are buying and flipping NFT's like day traders in the stock market, or sports card/collectible traders.  They want to find new projects that have potential to grow, and they want to buy your NTF's CHEAP!  Cheap is $150 to $200, maybe $300, or less in NFT land.  These traders want to buy into your work, and resell it quickly for a 10X or 20X gain, that's 10 or 20 times what they paid for it.  

So if your NFT costs you $80 to mint, and you sell it for $150 to a trader, that trader wants your work to get popular, and take off, they're in it to make money.  They want to resell your NFT art for $ 1,500 or more (paid in Eth aka Ethereum, usually).  In this scenario, you, the artist, make $70, the trader makes, $1350, and a bunch of traders learn you exist, and will pay more attention to your next pieces minted.

To most artists, that sounds like a shitty deal.  And for one piece, it is.  But if you continue, and you do multiples of you pieces, (a series of 3, 10, 50, 100), then you can begin to make some decent money on future NFT's.  That's the basic idea.  Yes, it's possible you could do a series, and they could get noticed and take off quickly.  But more likely, you'll have to spend a bunch of time online promoting your work to people who have a sports card trader mentality. 

So if you want to jump into NFT's and sell one NFT of your epic painting for $5,000, that's not going to happen.  Unless your physical paintings already sell for that kind of prices, then it might.  Most small time artists, I think, will either try selling NFT's, and fail, because they aren't willing to do the marketing or promotion necessary.  Then they'll post somewhere saying "NFT's suck!" and stay on Etsy or in their own Shopify store selling pieces.  Hey, that's fine, NFT's are not for everyone.  

The artists and creators who are willing to sell for low prices in the beginning, to do steady promotion, and build a following over time, have a much better chance of success somewhere down the road.  For people willing to learn this world, and do the work, there's a good chance of being able to create whatever you want to create, and make decent money at it, at some point.  There are a lot of people from the crypto world doing this already, it seems.  That's the upside of the NFT/crypto art scene, as far as I can tell at this point.  When somebody's art NFT's take off, they freakin' LAUNCH.  Ask Beeple.  But his "5,000 days" collage of sketches took him 13 1/2 years to compile.  So he definitely paid his dues. 

So that's what I've learned so far.  If you're willing to seriously market your creative work, NFT's may be really cool for you over several months time.  If you're the typical artist that just puts a piece or two  out there, puts two Instagram links, and hopes to make big money, don't waste your time with NFT's.  I hope this was helpful for some of you.

Oh, and Twitter and Discord are the main social media platforms for NFT/crypto art.  I'm on Twitter: @steveemig43 .