Last week, I was invited to speak on South Korean national TV (click here for the segment). Are non-fungible tokens (NFTs) — digital assets — worth all the hype?
In short, yes. Every new technology brings many new people and players to the market. It was true with the internet during the Web1 revolution, social media during the Web2 revolution, and now with decentralized ledger technologies during the Web3 revolution. It's not fair to compare the worst of the NFT market with the best of the fine art market.
At their core, NFTs solve two fundamental problems.
- Authenticated ownership — so much content gets produced each day, but content producers rarely have ownership over their content, nor an ability to credibly and securely signal that ownership to the world.
- Financial sustainability — artists produce so much creative content, but they rarely see the full fruits of their labors. Rather, revenues end up going to record labels and other large institutions with bargaining power.
Many have critiqued NFTs as being driven by speculation. But, that's not a property of NFTs — that's just a challenge with any asset, whether it is physical or digital. Don't forget the 2007-08 financial crisis. Driven by speculation about housing prices as a result of misaligned incentives, the financial services sector dramatically expanded the number of mortgages and bundled toxic assets with good assets — the process of securitizing a loan — and the bubble eventually burst.
Put simply, the way to avoid speculation in the NFT market is simply to buy meaningful assets — that is, digital assets that you believe have inherent and/or instrumental value and will appreciate over time. Our work in Living Opera in the NFT space is based on the intent to produce beautiful and creative art that empowers and inspires, so the value behind our art is not driven by speculation.
We look forward to continuing to weigh into these conversations about the NFT market!