This excerpt was written by Brandon Young, a fellow investor and fellow service member that I had the pleasure of knowing throughout my time at Texas A&M University.
“Today as I sipped my coffee in my backyard I was keeping my ear to the streets as I normally do in the latest financial gossip. I’ve recently heard about the new craze that is seemingly lingering longer than I thought it would. Non-fungible tokens or NFTs are being ushered into the millennial and zoomer populations by creatively bankrupt Hollywood has-beens and noteworthy celebrities. Lindsay Lohan and other bold innovators of the investor class like Soulja Boy and Mark Cuban. Both of them are well known for their reliable and professional investment advice and business savvy. Cuban who has recently been an avid promoter of the Wallstreet bets pump and dump movement and Soulja Boy who was recently sued by Nintendo over his cheap Chinese knock-off video game consoles violated more than a dozen copyright laws.
Honestly, my first impression of these NFT’s is a bit on the cynical side. Perhaps it is just my overactive imagination paired with a sense of dark humor. But I truly see people buying these NFT’s as a sign of the apocalypse. The concept wasn’t totally foreign to me. Video gamers have been using digital inventory for real-world currency for a long time. Online communities tend to have websites that facilitate in real-world trade of money for in-game items or digital loot drops from other players. Online trading card games have had digital copies of rare cards that are commonly traded for money too. Online party hats in a video game called Runescape sold for 7 thousand USD between private sellers. But are we really at a stage in the economic cycle where the best course of action is to buy digital content to pad your portfolio?
Are we really at a moment in history where people are actually purchasing a Lindsey Lohan NFT for 17 thousand dollars? Is dancing GIFS of Mark Cuban to your portfolio really going to be a solid item for your child’s financial future? Will AMC one day let us pay for our movies with Zuckerberg GIFs or pre-expulsion Trump Tweets? Will canceled celebrities have to sell their NFTs in shady alleys and on street corners within flash drives? I don’t truly know and I don’t want to pretend to know the answer. While it’s really easy to cherry-pick from the dregs of the Hollywood influencer types. There is real money being moved by major players in the digital market. A GIF of a cat-poptart hybrid called “Nyan-Cat” sold for 450 thousand dollars and Kings of Leon’s album sold for 6 million dollars respectively.
In both instances, the content is already released to the public. The owners don’t collect any revenue or royalties anytime the GIFs are used or the albums are played. In fact, the only thing gained is a sense of ownership within our digital world. While the world stands on the brink of opening up, the flood of money into online and virtual assets is staggering. Why buy real estate when you can buy virtual real estate? There was an old saying by Mark Twain. “Buy land, they aren’t making any more of it.” I can’t help but reflect on that as I see more and more of the virtual space be paved. How much farther into technology is society really trying to dive in and how much are people really willing to invest into this frontier?
On one level this seems to be a desperate attempt for people with influence to make money from their followers by truly trying to offer them the clout of virtual asset ownership instead of conventionally making products to sell to them. On another level, this is pop culture and pop art manifesting its own free market. I don’t believe the Government will get involved yet in a major capacity on either side of the pendulum either. I think the government trying to restrict the sale of virtual art is about as likely as them releasing their own NFTs of what’s within area 51 or who killed JFK.
But on another level, I also think that NFTs are a way where people can support their content creators and help support them in more meaningful ways beyond a tip. Instead of donations and handouts, people are now able to get collectibles and memorabilia that might hold and maintain some value as opposed to nothing. We live in a world where artists and entertainers stream a variety of content to their fans and audiences. The idea that the words we utter, the pictures we take, and our online memories can all be bought and sold are a new chapter in this digital economy. In today’s day and age, you’re money.” - Brandon Young