I remember watching a number of launches of early NFTs – the experience was a little wild to say the least! Early auctions often amounted to two or three ‘whales’ bidding against each other to buy JPEGs. This resulted in them paying tens or hundreds of thousands of dollars at a time.
NFTs immediately caught my attention, not just as an entrepreneur and enthusiast of disruptive technology, but as an artist too. I’ve remained excited by the possibilities, watching cautiously as the NFT market has grown and gained momentum.
Greater numbers of creators are launching NFTs and discerning investors are investing in those that offer genuine utility beyond just being attractive JPEG images. The world of NFTs is no longer dominated-by a handful of super-rich ‘whales’.
But the question remains.
Are NFTs now legitimate?
As with most niches and industries, NFTs could be considered either legitimate or a scam. This is mostly determined by the people involved.
Certainly, there are the unscrupulous people (scammers) who’ve exploited the lack of regulation and public knowledge to run ‘pump and dump’ schemes. These opportunists tend to stir up frenzied anticipation amongst buyers, heightening demand for their NFTs. They drive up prices before selling and exiting the market, often disappearing without a trace.
But there are also genuine, talented and innovative creators using blockchain technology to mint NFTs for their own artistic creations, which offer genuine value and utility to buyers too.
NFT Utility matters
An NFT that gives holders access to exclusive groups, events and courses and which includes rare attributes and bonuses will offer genuine utility and value to its owner. Such NFTs will make more money for creators since there’s a fairer exchange of value between the buyer and seller. Even if the NFT itself loses value as an artistic creation, if the owner perceives value in the bonuses and benefits that came with it then they haven’t lost out.
Claims of celebrity NFT ownership need to be scrutinized
It’s easy for a creator to air-drop (or gift) an NFT to a famous collector or celebrity in the hope of gaining publicity and attracting further buyers. Make sure to investigate such claims, checking if there’s a genuine link between the creator and the celebrity.
Just because famous collectors own a particular NFT, it doesn’t imply an endorsement or guarantee the NFTs will gain value. Having high profile or famous owners doesn’t mean an NFT project is automatically legitimate or destined to succeed.
If NFTs are a scam, then isn’t ALL art a scam?
It’s easy to say that NFTs are a scam based on your personal perspective. Theoretically if all NFTs are a scam, then by definition all art is a scam too.
Any art is worth what someone’s willing to pay for it. The price a buyer will pay is based on the status they perceive in owning the artwork rather than the value of the materials. The same is true whether it’s the bytes of data that make up an NFT, or the paint on a canvas that makes a painting.
Collectability, scarcity and significance determine the value of art.
The same logic has applied to art and collectibles for decades – rare sneakers, baseball cards, Pokémon cards, sports cars or watches – monetary value is determined by the significance and status that buyers perceive from owning these items.
All value is perception.
The smart contract enforces value
I’ve been an artist for over 35 years and I’ll soon be launching my own NFT collection.
NFTs exist within the ledger on a decentralized blockchain network, which hosts the digital asset. The blockchain makes NFTs secure and immutable – they cannot be duplicated, deleted or changed, only added-to. Buyers of my NFTs will get a unique piece of artwork, but they’ll also receive ongoing utility and value via the smart contract that exists behind the scenes on the blockchain. This will enforce the relationship between me as the creator, and buyers of my NFTs, ensuring the exchange of value is ongoing.
Choose how to get involved with NFTs
NFTs are a scam if people run them as a scam – NFTs are legitimate if people run them legitimately. For this reason, it’s important to proceed responsibly, with caution and curiosity.
The time to explore and exploit new technologies is when they’re in their infancy. Those who built businesses exploiting the internet 20 years ago are billionaires today. The same will likely be true as NFTs mature.
I’ll be sharing my knowledge and experience as I launch my NFTs. You can learn by watching and listening as I go through the process. You may even want to buy one of my NFTs, in which case you could benefit from the value and utility that I’m building into them.
Have a question or wish to find out more? Then simply get in touch with me today!