Thread by @HodaMehr

On drink 🍹 + one Friday night in the backyard 🌜 + and a giant question ⁉️

Why is everybody so excited about NFTs?

This is a mega thread🧵as I find the answer to this existential question.

I hope it's useful to you. Let's GO!

1⃣ Before I start, all I know about NFTs is what I told a judge at last week's @startupgrindOC pitch contest, who asked how do you compete with NFTs?
I answered NFT is a tool like any other tool. If our creators want to mint their portfolios, we'll provide the feature to them.

2⃣ I don't know for sure, but I think she gave me the lowest score. After all, there was one judge who gave me the lowest score of all criteria. I'm guessing it was her.

It made me wonder, what am I missing?

3⃣ As I start, my assumption is that NFT is a way to mint a piece of content digitally and attach a monetary value to it (using cryptocurrency) and the transfer of the ownership of that minted item is traceable.

4⃣ If that's true, so NFT is just a feature that assigns traceable value to things online, then it's just a feature every digital platform can use, like a credit card. But, then, why did that judge give me the lowest score, and why are so many smart people excited about NFTs?!

5⃣ Reading through a thread by @andrewchen about how he can growth-hack his latest book's pre-orders, at least 10 people told him to promise an NFT to pre-orderers.

My reaction: So I get a minted JPEG file, and then what?!

6⃣ Apparently, I'm very clueless about NFTs. Because @garyvee just growth-hacked his book's pre-order to number one on Amazon by dropping an NFT in the wallet of everyone who ordered more than X number of books.

7⃣ My reaction: Is it @garyvee's celebrity status that makes his NFTs so valuable? Or is it that he owns unique NFTs that people want to own?

In other words, do NFTs have an intrinsic value? So, let's explore that.

8⃣ Do NFTs have intrinsic value?
- They can be technically hard to produce.
- They can be rare.
- They can be functionally useful.

Where does the value of NFT come from - costly, rare, or useful?

Okay, I go on a learning spree... I'll be back ...⌛️⏳

9⃣ I googled, "are NFTs hard to make?", and came an article on @CoinDesk. It argues NFT sales are expected to be more than $1 billion in 2021. coindesk.com/tech/2021/03/1…

🔟The @CoinDesk article also says in 2012, there was something called colored Bitcoin - a digital representation of a physical asset. E.g., colored coin X could represent $500 ownership of building Y in NYC.

Basically, NFTs could be like stock certificates. Let's read on ...

🔟➕1⃣So, in theory, you can mint anything, digital or physical, which means you attach a monetary value to it using digital currencies. But ... Yes, there is always a but ...

🔟➕2⃣ Currently, as far as I can see, only art and digital media have been minted as NFT (to be verified), and by the way, you need an NFT marketplace that comes with a compatible wallet and currency. So, these marketplaces don't work with each other.

🔟➕3⃣ This isn't an issue. Because even now, you can only buy Apple's stock on the Nasdaq exchange. So, NFTs are no different.

🔟➕4⃣ So, creating an NFT is somewhat easy considering that the marketplace, the wallet, and the crypto are already created.

In other words, the NFT's value is not derived from its technically difficult inherent value.

🔟➕5⃣ Before we move one to the next source of value, one thing interesting came through. On a platform like @opensea, when you create an NFT, you can attach "locked" attributes such as things that only the purchaser can see, contact info or discount code, etc.

🔟➕6⃣ Locking a piece of info is an interesting feature. So NFT is a means to offer privileges.
This also means you can add an NFT to a smart contract where the ownership of a digital thing gets transferred based on the contract terms.
Read: medium.com/lansaar/nfts-a…

🔟➕7⃣ The locking of an attribute into an NFT can be a source of value. Earlier I said, people suggested @andrewchen give a piece of NFT to those who preorder his book, like @GaryVee. So does @garyvee's NFT come with any attributes?

veefriends.com

🔟➕8⃣ YES! So interesting! So @garyvee isn't just selling doodles and JPEG files. He is actually giving people access to his VeeCon and other events.

Buying the NFT from his VeeFriends' platform "unlock" things. There is an intrinsic value to the NFT you buy on VeeFriends.

🔟➕9⃣ Gary Vee is smart to fund the development of a conference he hasn't even planned through selling minted doodles.

So, it's basically the same thing as selling tickets. He can sell it cause he has celebrity status. The intrinsic value isn't in NFT. It is in Gary's brand.

🔟➕🔟So, NFTs are not hard. They are not inherently valuable, either. They are just means of digitalizing things. Like anything else, celebrity status is the main driver of value so far.
NFT+smart contract is interesting.
My drink is over, so is this research.
Happy weekend!

P.S. I should have minted my pre and post photos before. All I need is a massive follower base, so these NFTs are worth something.

I didn't mint them if you are wondering.