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...

 

Gary Vaynerchuk explains the basics of NFT's (back in February)

Like millions of people, I'm a big fan of Gary Vaynerchuk, I've been following his content for maybe 3 years now, I think.  In this video he gives a fairly quick, 8 minute take on where NFT's (Non Fungible Tokens) were, back in February.  

With my current, sketchy lifestyle, it's been nearly impossible for me to take in large amounts of information, for most of the Covid period.  As a homeless guy who actually does some kind of "work" every day, like art and content creation, I struggled to get any decent amount of time online to learn.  The little bit of time I had, 1-2 hours a day, was mostly keeping in touch with people social, and quick blog posts, content creation. So I didn't listen to much of what Gary, and many others, were doing, for several months.  

Over the past few months, in the limited amount of media I did consume, I started seeing the term "NFT" in relation to artists and musicians.  I knew it was somehow tied to Ethereum, but didn't have time to dig into it, and learn anything about it.  

NFT stands for Non Fungible Token.  Let's start with "fungible."  Money, for example, is fungible, one dollar is worth as much as any other dollar.  You can pay for lunch with dollar bills, coins worth a dollar, a dollar in your debit card account, or a dollar in your Apple Pay account.  Any dollar is worth the same, that's what fungible means.  That's a big part of the point of money.  

Now one big problem for creative people, of any kind, in the digital age, is that we all can share digital files.  A book, a song, a piece of art, a photo, a video clip, whatever, we can all make copies, and share the copies, and millions of copies could end up being made.  Nobody gets paid, and most are pretty much worthless.  Creative people, and businesses, lose lots of money because of this.  

So someone figured out how to take a digital file, let's say a scan of one of my drawings, and "mint" it, tying it into a blockchain, mostly the Ethereum blockchain.  Because there is only one file tied to the blockchain in that transaction, and anyone can check that, suddenly it's "scarce."  It's an original.  When you do that, mint a digital file into the blockchain, that's called a Non Fungible Token, of NFT, for short.  You can make NFT's out of art, photos, music, video clips, contracts, things like ID, any digital file.  And people can prove, "that's the REAL one."  You need to make them out of your own work, that you own, or else you get into copyright trouble. 

This started among tech geeks in 2016-2017, and different projects started to happen.  Crypto Kitties was one of the first.  Crypto Punks, a group of 10,000, unique, 24 bit characters, was another.  That one was actually tied to Bitcoin.  Another early big one was Bored Ape Yacht Club, funny looking apes in clothes, all with different features.  The Crypto Punks were given away, for something like 11 cents in fees.  People did what people do, they collected them, traded them, and started selling them, and an aftermarket developed.  Even though these are just files, the blockchain tie makes each unique, and potentially valuable, and this year they've been selling for downright ludicrous prices.  

One of the 10,000 Crypto Punks sold for $530 million.  Again, they were free, with an 11 cent service charge, in 2017.  One of the Bored Apes sold for $3.4 million.  A Crypto Kitty sold for over $3.4 million.  Digital graphic designer Beeple, (who says he's not an "artist") sold a compilation of 5,000 of his digital sketches, for over $69 million in March.  You get the idea.  If you think the real estate market is crazy, it's tame next to the high end of the Crypto Art/NFT market.  

The NBA did an NFT project called Top Shots, and raked in over $100 million.  Gary Vaynerchuk did a launch of 10,000 NFT's, based on his own doodled characters.  He made about $20 million, instantly formed a huge community of his followers, and then sold 5 of the original sketches in a Christie's auction for $1.2 million. So that's the insane side of the NFT boom, the 2021 NFT Art/Collectibles market.  

On the much more sane side of things, a whole bunch of artists and musicians have minted NFT tokens of their work, and put them up on several market sites, kind of like eBay for NFT's.  Most sell for $40 to maybe $300, plus some fees, when they sell. They pay (almost exclusively) in Ether (Ethereum crypto).  You have to buy crypto, get a wallet, and then sign up to the marketplaces, to create, buy, sell, or trade NFT's.  But there's a lot of that going on.  

NFT's have a whole bunch of other potential, as well.  Mark Cuban, owner of the Dallas Mavericks and Shark Tank guy, is stoked on NFT's.   He sees a future where they may be the standard type of concert or sports event ticket.  You may get bonus, digital stuff, with your game or concert NFT.  They could be used for ID's, passports, and things like that some day.  You can take your NFT into vitural worlds, there are actually virtual art galleries displaying NFT's right now.  You know that Metaverse thing Mark Zuckerburg is talking about, these are part of that concept.  

So that is a basic look at the emerging world of NFT's.  I've been digging into this world for about a week now, to see if it makes sense for any of my creative work.  We'll see where that leads.  If any of this interests you, watch the video above, check out the links, and you can find a ton more info on YouTube.