To NFT or not to NFT
The world would be a very boring place if everyone had a crystal ball and could predict and determine the future with any level of certainty. If they did, then Luton Town would be in the Champions League!
The joyous nature of not having a crystal ball is that we are free to speculate, dream of a glorious future and build a utopia that we can be proud of. If we were to take a cursory glance at LinkedIn and Twitter, we would be subjected to an avalanche of the latest news on crypto-collapses, blockchain and ‘you can’t lose’ NFTs.
Similar to the Dotcom boom and bust, some of these projects are enthusiastically pushed by reputable and trustworthy promoters and others are the latest iteration of a get-rich-quick scheme. Caveat emptor, as they say.
NFTs are getting their fair share of the limelight, starting with the NBA and their TopShots drop, followed by some primates with plenty of time on their hands and, somewhat predictably, footballers not wanting to miss out on an opportunity to cash in on their fading name. Whilst these types of NFTs sit firmly in the collectables section, their long-term value will come into question as the NFT space moves towards actual utility first.
If we look at an NFT as a digital certification of ownership of an asset, then its resale value is dependent on the asset’s desirability, credibility and scarcity. However, this latter dependency somewhat collapses when you consider Sina Estavi paid $2.9m for an NFT of the first-ever Tweet by Twitter founder, Jack Dorsey, and found that scarcity was an over-rated commodity when he attempted to resell it. The highest bid, just seven bids, was just north $250. Now that would make a good tweet.
Sports associations and clubs have also jumped on the bandwagon by supporting fan tokens, promoted by companies like Socios, to entice fans on the premise on the premise that they have a voice in how their clubs are run. There have been numerous attempts by these rights holders to tempt fans into spending more of their hard-earned cash and seemingly this is no different. Until real utility is baked into a fan token, they are no different to schemes like the affinity credit cards we saw in the early 2000s, where owners had access to a number of club benefits. Call me cynical, but given that more people have heard of a credit card than an NFT, this may still a better bet.
NFTs may never be more than a digital authentication of an asset that lives on a blockchain. And if that is all it is then that is absolutely fine. Time will tell as we are in the early days of the adoption of blockchain, and its real utility is yet to be developed.
Looking into my crystal ball, I see the blockchain as having a role to play in creating a fairer commercial structure with NFTs playing their part in determining ownership. For example, the following transactions could take place on the blockchain, with NFTs being the legal documentation. House purchases with NFT deeds, football transfers with the player owning their contract and train tickets that guarantee you a seat. OK well, two o of three isn’t bad.