Thread by @mrjasonchoi

Beautiful summary of why NFTs are important.

As some may know I'm a bit of a skeptic still

Here are some of my current thoughts.

Hope to get educated!

https://twitter.com/cdixon/status/1365733728304197634

1/ First, "NFTs" are a broad term.

Today it's used to tokenize "real world" assets, insurance, debt, but also digital collectibles like art and cryptokitties.

My reference of the term "NFT" pertains to the latter this in thread.

2/ I've bought, traded + gifted NFTs since 18.

As a creator, I see the benefit of frictionless digital ownership.

It's a new identity layer that can be applied to much more than just digitally native products.

My main skepticisms relate to investing in individual NFTs.

3/ Investing in NFTs seems to me to have more in common with speculating in art/ film studios than venture.

It's a hit-driven model, and there's not really a way to ascertain the fair value of an NFT as you could with equity/ a DeFi token with onchain cash flows.

4/ Unlike most investments, I can't project the growth of a digital collectible the way I can make even vague scenarios for a crypto exchange, or a lending protocol.

If a collectible re-rates -50% tomorrow, I have no idea if market is now undervalued, overvalued, or fair.

5/ Sure, many assets retain value based on memes and narratives alone, but those memes are *fungible*.

1 unit of $BTC = 1 unit of $BTC

How does one determine whether one crypto punk is worth more than the next?

6/ The answer I've arrived at thus far: the fungible meme for NFTs is the creator.

Just a Van Gogh is worth much more than the napkin doodle I put together, a Momo Wang cryptokitty is probably worth more than a randomly generated one.

medium.com/cryptokitties/…

8/ And since NFTs are on-chain, prior ownership could be a source of value as well.

I'd imagine people would pay a premium for a crypto kitty once owned by say Elon Musk.

9/ In that case, buying NFT is quite similar to art investing. You buy pieces from artists whose work you think the market will value higher in 5-10 years.

But can we build an objective, repeatable process around these decisions? At what point does it become gambling?

10/ I looked to the collectible world outside of crypto to find answers, and was astounded to find that things like Pokemon cards were selling for over $200K for a piece of paper.

But how do you predict the next Pokemon 5-10 years in advance?

11/ The explosive adoption of NBA Top Shot was informative.

I started thinking about NFTs along the following axes - it seems to like digitizing and creating experiences *existing, timeless* IPs is an easier bet than investing in completely new IPs just because they are NFTs.

12/ My current stance of NFTs is that there is a lot of froth in the space similar to 2017 ICOs.

Anything minted as an NFT immediately accrues value, just as any project that had a token/ ICO or company with the word "blockchain" in 2017 gets re-rated to the upside.

13/ Eventually, we will get a reckoning and most of the newer NFTs that came to market will be worthless.

Since taste is entirely subjective, investing in timeless IP (e.g. what @dapperlabs is doing - disclaimer Spartan was an advisor) seems like the more viable approach.

14/ I still haven't made sizable bets in the NFT ecosystem yet, but am glad to have @NTmoney debate me on some of these topics (and @richardchen39 for a follow up next week).

For those interest you can stay tuned here -> @theBlockcrunch

https://twitter.com/mrjasonchoi/status/1365675304325275652?s=20