Matty Profile picture
12 Sep, 21 tweets, 5 min read
Why do people spend Millions on NFTs when you can just download the JPEG?

$6M for a punk instead of a beautiful house?

Is it Money Laundering?

Is it legit?

1/ Let’s explore 👇
2/ This industry kind of jokes about “buying JPEGs”, when of course there’s more going on here.

To understand NFTs you must understand the basics of blockchain, (The tech behind Bitcoin).
3/ What does it mean to own 1 Bitcoin?

It means the blockchain, (an open ledger - record keeping system), has denoted that your digital wallet has '1' Bitcoin token.

Like the below wallet,
4/ Bitcoin, (BTC), along with ETH, ADA, XRP, etc are all FUNGIBLE tokens, (Are of equal value among each other), and can be traded on the blockchain.

Who gives these value?

The market.

Today, if you want to buy a Bitcoin, the market rate is ~$45k USD
5/ But the blockchain can ALSO be used to store tokens that can store "metadata", ie, links to images, name, description, other properties that can move alone with the transfer of tokens.

Enter "NFTs", Non Fungible Tokens.
6/ Early NFT or "embedding data into coins/token" experiments started as way back as 2012 with Colored coins.

Where people started thinking of the blockchain as storing any data not just Bitcoin transactions/ownership.
7/ I've made a whole thread on how these early experiments lead to what we have today.

NFTs going for millions has been 8-10 years in the making.
8/ What started with people experimenting with pegging data to tokens lead to others experimenting with storing images/gifs.

This lead to others thinking hmm what if we build apps on these parameters.
9/ Which then lead to early games, (Spells of Genesis), Meme projects, (Rare Pepe's), Virtual Land, (Etheria), and many other apps that started to suddenly have gameplay, collector and creative value.

Suddenly there wasn't just currency on the blockchain.
10/ Fast forward to 2017 when these experiments continued on Ethereum which took smart contracts to another level.

This is where Cryptopunks made their debut, (under the radar for a long time), coz not many cared or knew about NFTs.
11/ Experiments continued along with Cryptokitties introducing a "breeding" mechanic which would go on to inspire Axie Infinity,

Decentraland, Cryptovoxels, Somnium Space, The Sandbox, creating virtual worlds with land, wearables, names and other goods transacted as NFTs,
12/ Known Origin, Superrare, Makersplace creating dedicated marketplaces to collect NFTs as "Art".

Again, much of the above was developing slowly between 2017-2020.

Then came some home run marketplaces/projects.
13/ Dapperlabs made NBA top shot which used the tech to create collectible sports moments, (cards).

Nifty Gateway brought on mainstream artists, intro'd them and made Art buying more accessible with Credit Cards.

Axie Infinity player base started to grow to 1M+
14/ Finally studios were putting all the pieces and experiments together to build amazing products disrupting mainstream industries.

Now there's 8 years+ history of real people spending real $ to collect NFTs, (Art, game items, collectibles, virtual land, etc).
15/ These real communities have gone on to be over 1M people collectively who are realizing that this didn't just come out of nowhere.

There's depth here. Maybe, just MAYBE, this is the new way of transacting digital goods.
16/ With that in mind and history on our side, the NFT community along with big money, (VCs, Angels, large funds, etc), are taking a bet on blockchain/NFTs being the way of the future.

Suddenly NFT Art can be the future Mona Lisa's of the digital world.
17/ Cryptopunks are one of the first Collectible NFTs released on Ethereum, that had a LOT to do with mainstream paying attention.

With only 10,000, and being a way for people, brands, firms to signal their interest in NFTs, this demand has people paying top $ for rare punks.
18/ These NFTs are mostly seen as investments.

It's not just a "JPEG" but a token that comes timestamped, from the creator, that can be traded on a marketplace.

This officially released token is what people collect/buy.
19/ So yeh you can copy paste a JPEG, but you don't have the token.

Just like I can copy paste someones Bitcoin balance but not own the Bitcoin.

Collectors pay for NFTs not the image.

The NFT lives on blockchain, not on your phone.
20/ No one "decided" NFTs have value, people just came together and started trading them.

Some paid more than others and suddenly what started with a couple hundred people exchanging art/memes/game items has now become million+ people exchanging all kinds of digital goods.
21/ Who knows what the future holds.

But this tech is going nowhere, people will continue experimentation, and many of us will be here just enjoying the show.

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More from @DCLBlogger

11 Sep
Terming everything in this space an “NFT” is inaccurate.

NFT = each item has a unique ID, indivisible, etc. (Non Fungible).

The below have FUNGIBLE characteristics.

Enjin items,
The sandbox items,
Twitters release,
Rare Pepe’s,
Curio Cards,
80%+ Rarible art,

2/ for example these Twitter tokens have the same ID, (3), and are the erc-1155 standard which allows you to batch them.

Does this all matter? If you’re looking for something 1/1 unique, yes.

Twitter themselves refer to them as NFTs and the cheapest is $100k+ ImageImage
3/ Thought I’d write this because I/we see the term NFTs used for everything.

When in the future that might change.

“Semi-Fungible Token?” (SFT)?“Cryptocollectible?”

Or just NFTs for simplicity’s sake?
Read 5 tweets
7 Sep
A short thread on how to win at NFT investing.

1/ Be open minded.

Try new things, it’s fun and expands the mind.

You also stumble upon way more opportunities and ways to get involved.
2/ Spend money.

Getting free stuff is cool, but you make real money when you spend real money.

Maybe it’s just my experience.

But utilise wealth to build more wealth. It’s more scalable.
Read 11 tweets
2 Sep
8 reasons why the NFT industry behaves completely different to the real world.

You cannot analyse it the same way - there are different dynamics at play here.

Thread 1/👇
2/ Currency.

The currency of the real world is fiat. Deflationary, representative of the local economy, supply-demand controlled but the government.

Here it’s ETH, BTC, SOL, etc

Fixed supply, Community gets wealthy which gives them enormous spending power.
3/ Wealth.

Tied to the above.

People in the real world have made their wealth through long hours, weeks, years making an income.

Here, people have made it with strategic investments, lately trading NFTs from $100s to Millions $.

Who’s a more liberal spender demographic?
Read 10 tweets
31 Aug
What holds an #NFT Investment value long term?

2-5 years from now which will stay relevant?

Here's 5 factors that matter imo*

Thread 1/ 👇
2/ User base/Community growth.

Axie Infinity is the perfect example.

As the user/player base went from 10k+ to 1M+ their supply capped NFTs, (Origin Axies, land, land items, etc), have gone up immensely.

Applies to other games, virtual worlds, etc.
3/ Artist Growth.

Buying an NFT from an Artist, you're forever tying yourself to their growth.

They do collabs, exhibitions, sell art for Millions, etc, that ALL effects your investment, (Art piece).

Quite a fulfilling way to invest.
Read 7 tweets
22 Aug
Noticing a lot of traditional crypto traders/investors getting into NFTs.

There’s many similarities between NFT marketplaces and Crypto exchange/economies.

Floors, tops, walls, volume, liquidity,

1/ Thread 👇
2/ Crypto investors are familiar with these terms over the last several years.

Indicating when to enter/exit positions.

Now, I’m not a big TA guy, but I do use some.

PS This Tweet is NOT Art related - that’s a diff beast.
3/ Thin floors: Below is one of the first ever NFT releases on @niftygateway from Cris Cyborg.

If the cheapest 8 are bought, the floor price goes up over 600%.

This is how we see CRAZY NFT prices.

Low supply, thin floor, demand comes in -> People make $.
Read 22 tweets
11 Aug
10 examples of people in the NFT space spending $100s but making $1,000’s.

Think this is a space just for the rich?

Nope. It’s for the hustlers.

2/ The NFT space seems very noisy at times.

Which is why certain projects are expensive to participate in.

High demand, low supply = high prices.

The work around? Find quiet places with promising upside.
3/ Early @niftygateway art.

Some early open editions and art were pretty affordable.

Like @grimemonday first drop where 415 were minted at $40 each. A total of $16.5k.

Now? Minimum $10k for a piece!
Read 18 tweets

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