NFT is more art than science
Investing and its risks in an unstable market
Saturday – 16 Sha’ban 1443 AH – 19 March 2022 Our wind number no. [
Digital Artwork (NFT) on the OpenSea Digital Art Sales Platform (Reuters)
New York: Alison Krueger
One late Friday evening last spring, Izzy Pollack decided to buy two of the unique Bored Ape (NFT) digital images.
As the owner of Bored Ape, Pollack now has the commercial rights to those digital images to do as he pleases. Interestingly, many people choose to display their NFTs as their profile picture on social media accounts.
(And if you ask yourself: How can the ownership of a digital asset be verified? The answer is that each NFT image has a fixed mark with a unique serial number. The transaction history of each image is stored in the Blockchain system so that the real owner can to be known.)
Pollack, 29, bought three more photos a few months after a collection of 10,000 NFT images known as the Bored Ape Yacht Club showed some monkeys wearing gold jackets or animal prints, and other monkeys drinking cigars or smiling.
At the time, Pollack was working at Genies, a Los Angeles-based technology startup that produces NFTs and avatars who were not making much money. And for his life at the time. “I lived in a four-bedroom house with three other people,” he says. We used to share a bathroom. It felt like college life. ”
Neither did he have money.Pollack mentioned that during the global financial crisis that swept the world in 2008 when he was 16, his mother could not pay the mortgage, so he and his family had to rent an apartment.
Conversations at the Clubhouse about the NFTs prompted Pollack to buy. “I thought, ‘Oh God, this is crazy,'” he commented. Has he spent hundreds of dollars on a picture of monkeys!
But it turned out to be a wise decision. Last fall, months after buying his first NFTs, their value skyrocketed and he sold one he bought for 14 ethers (a virtual currency worth about $ 40,000 on the day of purchase) for about 70 ethers ( about $ 231,000 on the day of purchase. sale). ). He used that money for an advance on a three-bedroom house in the Los Angeles backyard.
Pollack now has three NFTs in his digital wallet that he has not sold yet, but will one day sell. For the first time in his life, he felt financial well-being.
Many people now have their own stories of transition from poverty to wealth thanks to these photos, including Matt Medved, founder of Nft Now, a digital media publication related to NFT photos. By investing in the right project at the right time, some collectors and digital artists have made “money to change lives”.
Some use the money to pay off student loans, buy a house, or quit their jobs.
Most people who make or buy NFT images do not benefit from them as there is no regulation or protection against the consumer and trading them is just as risky as gambling. Investing in cryptocurrency involves high risk and a lot of technical knowledge and luck as well; It can be recommended by some financial professionals and the scams are numerous.
Medved encourages people to think of NFTs as they think of baseball cards. Explaining this, he said: “For generations, our society has recognized that rare baseball cards have value. There is a rare Mickey Mantle card worth five cents, but it sold last year for $ 5.2 million! Why? “It is not related to the material value of the card, but rather to its history, rarity and cultural significance,” he added, “belongs to the fan base.”
Likewise, what many NFT artists produce or invest in collectors will be little or not at all in the long run. But there are some “NFTs” that have become very valuable and have brought their owners and producers a lot of money in a short period of time.
For example, pictures of “monkeys” bought by Pollack may take up to 0.08 ether ($ 200 last spring), but now, less than a year later, the cheapest is about 73 ether (about $ 190,000). ). (Ether can be converted into real money through major cryptocurrency platforms like Coinbase and Gemini and then transferred to a bank account.)
Claire Silver, an artist in her early thirties working in the field of artificial intelligence, is another success story for NFT Pictures. In 2017, I received three collections of CryptoPunks photos, with 10,000 unique artistic characters created by an algorithm, from someone I met through the Slack app.
“I was in a cryptocurrency chat room and I met this guy who was interested in art,” said Silver, who lived a strict life but had recently relocated to Denver. He told her he had 730 CryptoPunks, “and asked me if I wanted some. I said: Of course, and I bought three.
In 2017, collectors could get CryptoPunks for free as long as they had an Ethereum portfolio, but now the cheapest sells for 68 Ether (approximately $ 175,000).
Silver held it until 2020 when I received the news that they were selling it for a lot of money. She sold one in July 2021 for about $ 60,000 and still has two more. (Many sell for hundreds of thousands, with last month selling for $ 600,000.)
Silver saved so much money that it finally felt financially secure, at least for now. Commenting on her new situation, she said: “This amount of money is a big job for me because I come from poverty. We were accepting church donations for food. And the next day I went into a store and said, ‘Now I can buy cheese, I can buy great coffee.’ “I have never experienced this freedom of purchase before.”
Although some people are getting rich thanks to NFT trading, Medved advises people to remember that many of her other projects lose value over time, emphasizing: “You should never invest more money than you can afford. to lose. “The field (NFT), like the crypto field, is very volatile and markets are growing and falling very fast.”
“I think a lot of NFTs will end up being zero in the long run,” he concluded. “Your success depends on your ability to choose the best projects and it is not easy.”
New York Times Service