As early as December 2020, I saw the data growth of several NFT issuance platforms and concluded that NFT is a new value track. In just the past three months, dazzling bursts have blossomed everywhere. Beeple's big sales on niftygateway, grimes sold millions of dollars in tens of minutes, rarible tokens skyrocketed, hashmask sold tens of thousands of ETH in six days, cryptopunk became the top IP in the pre-NFT era, Christie’s tested the waters NFT auction beeple works sold for nearly 70 million US dollars, the moon cat was rediscovered by archaeologists and quickly entered the opensea transaction list second only to cryptopunk, opensea once entered the top three applications of Ethereum gas consumption,...
Is NFT really a new value track, or is it just a short-lived phenomenon?
Opinions are divided, and positions are opposing. The difference in perceptions and judgments about NFTs is no less than the huge gap between the belief that Bitcoin will eventually match gold and the perception that Bitcoin will return to zero sooner or later. At present, the media and self-media articles we can see are still dominated by incomprehensibility, incomprehension, and surprise. Apart from saying that the bubble is very big or just a kind of hype, few people really really Think NFT is valuable.
Indeed it is. I didn't understand it at first. Friends who often read my articles know that my knowledge of NFT has also risen several times. In the past three or four months, there will be a brand new cognitive refresh basically every month. At this stage, I understand an important question, that is, technically speaking, everything can be NFTized and chained, but why NFT+ artworks and collectibles are popular, while NFT+ oranges, hairy crabs, and Moutai These directions that many people naturally think of and find more practical significance have been tried by many people in the past few years and have all failed without exception?
The answer to this question, to put it bluntly, is that the NFT of art and collectibles can appreciate quickly, but not consumer products. Consumer goods must be continuously reduced in price with the increase in productivity. What is the hype value of a constantly falling price? If there is no hype value, it must be NFTized (blockchain)? The NFT of artworks and collectibles must not only appreciate, but also quickly appreciate, and the rate of appreciation must be much faster than that of Bitcoin. Only in this way can it form a rich wealth effect, thereby attracting talents and capital to enter the market.
The figure below is the comparison of the price changes of the BTC standard of NFT top-stream cryptopunk over the past 4 years with the price changes of Bitcoin itself. If you take a closer look at this graph, you will find that cryptopunk is very powerful. Its growth rate is the square of Bitcoin, because its growth rate in Bitcoin is still the same as Bitcoin. This is so awesome, isn't it?
(Picture: Cryptopunk BTC standard price history-blue, BTC price history-orange)
Is there a bubble in NFT? There must be, and the bubble is not small. However, the core question is whether the bubble will make it fly up and then fall, or will the bubble fly up one step at a time, getting higher and higher. The Dutch tulip and the Internet bubble in the U.S. stock market all ended in bursts. And Bitcoin is flying higher and higher. There is actually only one problem, and that is supply. The tulip bubble will encourage people to plant tulips frantically, and the Internet bubble will prompt a large number of companies to go public. The rapid increase in prices will attract a rapidly expanding supply and subsequently cause a systemic collapse.
NFT can have the opportunity to accept and retain the value of the bubble input, so there will be waves of hype, and each wave of hype will push its price to a higher level, just like Bitcoin. why? The answer is three points: 1) limit; 2) time; 3) initial value (zero value).
Take the top stream cryptopunk as an example. There are a total of 10,000 punk avatars, and they cannot be separated and are different from each other. This scarcity is strictly scarcity and is not interchangeable. Each one is unique. The style is pixelated, reflecting the ancient characteristics of the pre-NFT era, and using low resolution to highlight a sense of history.
NFT is also similar to Bitcoin in that Bitcoin is a M0 zero-level currency, with zero-level value, and the value injected by the proof of work. NFT is the only one that can inject value and inject zero-level value into the entire system so far. New asset type, in other words, NFT is a zero-level asset. In contrast, DeFi is not a zero-level asset, but a secondary asset. The value of DeFi assets comes from the extension of Bitcoin's value support (and possibly part of Ethereum), not from its own value injection.
Therefore, it is a high probability that NFT top-stream IP will outperform Bitcoin by a large margin. As John Mueller said, historical collections cannot be remanufactured, so the price supply curve is a line perpendicular to the horizontal axis, and its price depends entirely on the position of the demand curve.
With the rise of NFT, garbage altcoins will lose their hype and living space more and more. Because speculation in NFT will be 10 times, 100 times faster than altcoins, who will go to speculate altcoins? What's more, the white paper of altcoins is too obscure and too difficult to understand. Where can I see and hear NFTs that are intuitive and easy to understand, so people love to hear?
NFT will be the next Bitcoin-level opportunity. This is the bold prediction I made today when most people are still extremely skeptical of this circuit. let us wait and see!
(Disclaimer: None of the content in this article constitutes any investment advice. Cryptocurrencies are extremely high-risk varieties, and there is a risk of returning to zero at any time. Please participate carefully and be responsible for yourself.)