NAB
Last month, the NFT platform OpenSea.io processed
more than $3 billion in NFT-related transitions on its platform.
Despite the complaining, mostly from those who don’t
understand the technology, crypto backed assets like NFT are soaring in demand
and making some people real money.
Nonetheless, the trade in NFTs — which can see single JPEGs
sell for half a million dollars — is considered a vastly inflated market, a
casino for high stakes crypto rich gamblers.
There are those with strong track records in finance who
should be able to discern a turkey when they see one. Coinbase co-founder Fred
Ehrsam (also co-founder and managing partner of cryptocurrency investment firm
Paradigm) is interviewed in depth by Vanity Fair, and NAB Amplify talks
with Nigel Green, the CEO and founder of deVere Group, one of the world’s
largest independent financial advisory and fintech organizations.
We’ve edited the Vanity Fair interview for
highlights, followed by NAB Amplify’s talk with Green below. Both
believe NFT and crypto are right on the money.
Is the NFT bubble about to burst?
Ehrsam: Digital ownership is a long-term trend that is
here to stay. Kids today will eventually own more digital items that look like
NFTs than physical items. At some point, they’ll also stop opening bank
accounts and just have crypto wallets that are free to download and work
interoperably with everything on the internet.
My partner, Matt Huang, likes to say the
speculative casino aspect of crypto is actually a Trojan horse with a new
financial system inside. Even if some of the behavior seems silly at the start,
the paradigm shift in infrastructure isn’t.
There’s lots of talk [of] “this won’t last,” indignant
questions of “why does this have any value?,” or people from the traditional
art world rejecting it or trying to make it fit within their framing of art.
But it will work, and it’s about so much more.
What happened last month that drove NFT sales into the
billions of dollars?
Like any powerful new technology, there comes a point where
the mainstream glimpses importance for the first time, and that has happened
this summer for NFTs.
Concretely, people are loving profile picture NFTs like
CryptoPunks, which have driven a lot of the volume. Another factor was the
invention of fractionalization of NFTs, splitting them into little pieces of
ownership. This allows a bunch of people to participate instead of an NFT
selling to one person with deep pockets. This is not only driving sales, it’s
also creating new social groups amongst owners. To visualize this, imagine if
the Mona Lisa was digital and then auctioned on the internet where
anyone could buy a small slice, and everyone who bought a piece was now part of
a big group chat.
What comes next after NFTs?
We think about crypto developing in three stages: first as a
new digital money, second as a new financial system, and third as a new
internet app platform. As a new digital money, crypto has gone from zero to
over $1 trillion over the last 10 years. As a new financial system,
decentralized finance (or DeFi) came on the scene about three years ago and
already has almost $100 billion of user assets. As a new internet app platform,
NFTs are a glimpse into the third stage: a next generation of mainstream
consumer apps built on crypto rails — the social networks, games, and more of
the future.
The Hype is Real
Now here’s Nigel Green, the CEO and founder of deVere Group.
He runs business in more than 100 countries worldwide with $12 billion under
advice.
Aside from digital collectibles, what other ways do you see
NFT as the basis for new revenue streams/business models?
Nigel Green: NFTs allow companies to engage in new
business models, further the proposition of existing products and services, as
well as to enter into new markets. They also offer fresh methods to invest in
projects and new digital trade and commerce opportunities.
For example, NFTs can be used to create a virtual retail
experience for shoppers; they can be used to collaborate with other brands; and
they be used to heighten awareness on social media, therefore driving up
revenue.
It’s hard to overplay the impact that NFTs will have on
business models in the future as our digital lives and real lives increasingly
overlap.
NFT and crypto is said to be key to democratizing the media
value chain and disintermediating conventional distributors like studios. Do
you believe the hype around this?
All major businesses will move into this space including
major entertainment and media brands. They know this is the inevitable future
and are moving apace to be early adopters. The hype is real, and they see the
value in it.
With NFTs, we are experiencing the meeting of an
internet of information with an internet of value, which is drawing in large
investments coming from multinationals, funds, and VC firms, amongst
others, into the market.
However, the market remains young and highly speculative and
caution should be exercised. It can be expected that some of the NFTs on
the market now will have little value in a few years. But some will be
worth a fortune. It’s a similar situation to websites in the early days of the
internet.
As with any kind of investment, the key is being able to
pick the winners and avoid the losers in what is a volatile market driven by
fast-changing trends and tastes.
Will NFTs create a space for new forms of content to be
created?
Without question, NFTs and cryptos will create new forms of
content, in fact they already are doing so. The major areas that will be
impacted moving forward will include gaming, advertising, music, art, fashion
sport and social media.
Do you have any advice for content creators looking to
engage in this field?
Content producers need to apply the fundamentals of all
content creation when it comes to NFTs. These include creating a compelling
hook, providing something that will engage and chime with the core market,
something that is different from the rest on the market, and using your unique
brand values. If content creators stick to these rules, most pitfalls should be
avoided.
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