In the pre-covid era, the gaming giant GameStop experienced a slow decline in its sales, surpassed by the online market and the success of streaming gaming platforms. Luck would have it that a group of willing to do anything traders brought this company back into fashion via a popular group on Reddit. Many have seen a parallel between the retail investing community that boosted GameStop's share price and that which invests in cryptocurrencies. Today, the paths of the crypto world…
The growing popularity of NFTs has left some people perplexed. But that doesn’t mean that they are going anywhere.
NFTs may change the way we relate to art – for good.
Yet, for most people, paying thousands of dollars for digital assets seems unreal. Skeptics are not sure why they should own NFTs. They may even believe they are worthless.
The same is true for collectibles in general, yet these have been around for ages. Therefore, the parallel between NFTs and collectibles is particularly useful when it comes to valuing them.
Take, for example, stamps. Collecting stamps was probably the first hobby that involved collectibles. Well, there may have been an earlier instance, one involving tulips. However, the Dutch tulip mania did not last long. Tulips, it turns out, can multiply relatively quickly and thus make bad collectibles.
Luckily, stamps don’t have that problem. However, some symbols are very rare. And, if there is a demand for them, they will naturally command a significant price.
Like NFTs, the value of collectibles is related to two things – popularity and scarcity.
Is there any reason that stamps – just little pieces of paper – be worth anything? None, other than the fact that they were scarce and that someone wanted them.
But what determines the demand for collectibles? Well, that is all about trends.
Collectibles – Importance of Trend
The demand for collectibles itself is mainly based on whatever is trendy. For example, in the age of email and instant messaging, stamps are going out of fashion. It’s no wonder that logos are going out of style.
And even before email, telephones and fax machines were already stamping them out. Incidentally, that’s when a new hobby emerged, just as stamps were declining – baseball cards.
— TB's Baseball Cards (@cards_tb) March 20, 2019
Baseball cards reached the height of their popularity in the 1980s. People used to value them greatly, and it’s easy to explain why. A large number of people in the U.S. discovered trading cards when they were young. For some, the fascination stuck. Therefore, baseball cards had popularity, and some were extremely scarce. It’s no wonder that some sold for millions.
However, as trends changed, baseball cards went out of fashion. As a result, younger collectors did not have an early experience of them. Instead, they played with Pokemon, Yugioh, Magic the Gathering cards. Soon, those trading cards became hot collectibles.
— YuGiOh News (@YuGiOhNewsTCG) November 16, 2021
Currently, the clear trend for NFTs seems to be cyberpunk art style and 80s video games aesthetics. This makes sense, as many people who trade NFTs now were young at the time. So it’s no surprise why CryptoPunks became so popular.
Many celebrities own their own, including Jay-Z, Snoop Dogg, Serena Williams and others.
Further, many of the more popular memes include “apes” and “degenerates”. That is a reference to WallStreetBets and GameStop due to these nicknames being popular among retail traders. Ethereum’s Bored Apes and Solana’s Degenerate Ape Academy cover that segment.
Frog NFTs are popular, too, due to popular memes inspired by the character Pepe the Frog. The Sad Frogs District NFT collection is the most popular, featuring cyberpunk frogs inspired by nature. Recently, the character’s owner Matt Furie has sent a copyright claim to OpenSea, over the collection. The $4 million readers have since been taken down from the largest NFT exchange in the world.
— Cozomo de’ Medici (@CozomoMedici) November 11, 2021
No current trends are complete without Elon Musk. His Dogecoin episode inspired a series of ‘doge’ themed NFTs, including the SHIB-backed Shiboshis. Shiboshis, unsurprisingly, play into the cyberpunk trend.
The crossover between the trends is strong if this was not already obvious. To illustrate this point, the Doge Apes Private Club NFT references both dogs and apes, and it uses the 80s video game style.
NFTs – Each Unique
Trends are critically important to collectibles. That is because of the fact that the number of people that value a collectible has a great impact on the price. This works through a sort of network effect. If a collectible item has mass appeal, individual buyers are more likely to value it more highly. If for no other reason than the fact that they are more likely to sell it – even at a profit.
However, NFTs have another quality that sets them apart from most collectibles – each of them is unique.
Most popular NFT sets are made up of unique NFTs. In truth, their uniqueness is rather synthetic. NFT artists use technology to make a large number of unique images by using relatively little effort.
They do this by starting from a single template and overlaying it with several elements that add detail. These layers could include hats, eyewear, expressions, background, etc.
The most popular NFT sets- the CyberPunks, the Bored Apes, the Degenerate Apes and the Shiboshis – all work that way.
For example, apes from the Bored Ape Yacht Club use the same image and change around headwear, clothes, fur color and facial expressions. They then used a computer program to generate a large number of possible combinations from these elements.
— Hunter NFT🌙 (@Hunter_NFT) June 16, 2021
This allows artists to create 10,000 image sets relatively easily. What is more, all of these combinations are technically unique, which adds to their perceived value.
NFTs for Self-Expression
Why is that? Arguably, uniqueness has a magical element to it. Humans are drawn to unique art, especially if they see it as a representation of themselves. Of course, this applies to digital art as well.
One example is that of Sonic OCs. A while back, fans of Sonic the Hedgehog’s cartoon characters were notorious for their original characters. So, mostly young fans would use their skills in MS Paint to recolor existing artwork to make their characters.
Despite their questionable originality and sometimes dubious quality, many fans took great pride in their characters. They would often put warnings such as OC – do not steal on them.
It’s not hard to find the parallels with NFTs. They are becoming how we present ourselves to the digital world. The uniqueness of NFTs makes the art that much more interesting an avenue for self-expression. It is no coincidence that the celebrities that bought NFTs usually pick images in their likeness, either physically or in character.
The element of uniqueness, with the help of blockchain as a public ledger, might create a real revolution in how we perceive, display and consume art.
NFTs help solve the issue of stealing “original content” with the power of blockchain tech, which provides proof of ownership. This could mean that people will become much more conscious of the art they use to express themselves.
What if unique art becomes a norm? What if people decide that their digital avatars, art in their homes, the images on their shirts, and even tattoos on their body to be original?
Clothing giant Nike is already experimenting in the space, by creating CryptoKicks NFTs. The project would allow users to create their own – unique – sneakers on the blockchain. These can then be made into custom sneakers.
On the other hand, artists may want to protect their art from copying. Blockchain seems to provide a solution for all those issues.
Note that it doesn’t mean that laws have to be changed to protect people from “stealing” NFTs. It is enough if people start believing it is “uncool” to use images that you don’t own or images that are not unique. Seeing how status-seeking we are, that just might happen.
Image recognition tech already has the potential to search through billions of images to find matches, and find their owners.
The instant verifiability of whether an art piece is original or not could boost the demand for original work. That is why artists should be very excited about the NFT revolution. More demand for original art means more work for them.
You now might see the parallels between NFTs and collectibles. You might also see how originality adds to the value of NFTs as collectibles and the role of self-expression in them. But maybe you are still not convinced that digital collectibles have any real value.
Like many social media users, you might point out that screenshots exist and say that art copies are as good as the originals.
Yet, that’s not what many NFT owners think. Incidentally, that’s not what owners of other collectibles believe either. Copies of artwork, stamps, trading cards, no matter how faithful, are not as highly prized as the originals.
In fact, some NFT owners are already very defensive of their property – so much so that others started poking fun at them. One famous story references an alleged NFT owner or a troll pretending to be one, threatening users who screenshotted NFTs with legal action.
Screenshotting NFTs is not illegal, but the story illustrates something significant. Rather than this being a negative for NFTs, it’s the opposite. It highlights how much people are already attached to their digital assets.