Around the Block #12: NFT mania(May 4, 2021)



At this point, NFTs have taken over public discourse of crypto in a way reminiscent of ICOs in 2017, including mainstream 


Global search interest for NFTs has now surpassed that of Ethereum’s ICO frenzy in 2017.


What is an NFT?


The term “NFT” can be quite generic, so let’s break down some of the confusion. A “fungible” asset is one that is mutually interchangeable. 


Think dollar bills, where each one is identical and interchangeable with another.


  • It’s not physical ownership of the picture, NFTs are entirely digital
  • It is a digital token that lives on a blockchain, which contains metadata that points to the art in question, and is freely transferable
  • It is a socially-recognized record of ownership. The artist themselves (or whoever minted the NFT) bestows upon the owner special status as the owner of this artwork

NFTs are a social concept of digital ownership. 


Why should we care? 


What makes NFTs interesting?


How many times have you bragged about discovering a band before they were cool? What if we could represent this dynamic economically, in a socially-provable way?


What is the NFT lifecycle?



  • Primary Issuance: these are platforms that “tokenize” the source into an NFT. Platforms can be closed (“invite-only”) or open (anybody can mint an asset).
  • Secondary Exchange: these are platforms that facilitate the buy/sell of NFTs. Oftentimes, secondary exchanges have their own native primary issuance funnels.


The future of NFTs

Today, most cryptocurrency products live only in a digital format. 


But NFTs may begin to mark a transition where we may eventually be able to map real-world assets onto a blockchain in meaningful ways, perhaps including some sort of legal framework that secures actual ownership. 


In this future, imagine if a sports franchise like the LA Lakers tokenized their season tickets as NFTs? 


They could live in their fan’s wallets, secondary market price discovery could happen with P2P price discovery, and they would be immortalized as NFTs that live in this expansive, composable, digital metaverse.

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