In Defense of an Optimistic Future For NFTs PlatoBlockchain Data Intelligence. Vertical Search. Ai.

In Defense of an Optimistic Future For NFTs

In Defense of an Optimistic Future For NFTs PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Over the past 25 years, with a 13.6% annual rate of return, Contemporary Art has outperformed the S&P 500 whose total return during that time was 8.9%. Art also outperformed other tangible assets during this time including gold and US real estate. Today, Art is a 1.7 trillion dollar market.

During Q1 of 2021, the digital art market ballooned to $2b up 2100% from the $93m worth of NFTs sold between Q4 of last year. As of writing this, the 30-day sales average is $79,911,726.78, a 250% increase from last year.

Still, articles will cite that the NFT market has collapsed, or popped, all too convenient declarations designed to satisfy confirmation biases and get clicks.

Polarizing positions on the future that align with protecting yesterday’s modus operandi are consumed at alarming rates because they represent a vocalization of the last hope of preserving today. These takes satisfy the stubborn fear that has yet to educate themselves on the topic du jour and its paths to adoption. Ignorance isn’t a measure of absent intelligence so much as it is the active choice to suppress curiosity and be, lazy.

A rational position might suggest that NFTs are simply in a discovery phase. Price ceilings are being discovered, as is the secondary trading market. Usage and display methods across physical frames, online galleries, and the metaverse are being discovered. With the barrier to entry for minting an NFT so low, quality too is being discovered.

Lesson #1 is not to judge long-term assets by their short-term performance.

Lesson #2 is that this will all simply take time.

Accelerating discovery and adoption though is the stream of smart money gravitating towards digital art. Smart money first knows that art is not meant to be traded with frequency. As a non-correlated store of value asset, most pieces are purchased with the intention of being held for 3–10+ years, to allow for appreciation. Most NFTs have been only been minted and offered in the past year, it’s no surprise activity has slowed.

Smart money also understands that what makes art valuable is its scarcity. Inscribed into the blockchain, digital art can confirm scarcity equally or better than traditional art. Digital art can also be more easily transported, increasing the volume of revenue-generating display opportunities, which also contribute to appreciation.

Smart money is even already addressing the main FUD, fear, uncertainty, and doubt, by making 8-9 figure investments into alternate blockchains advertised as more environmentally sustainable and faster and more energy-efficient.

Still, discipline within NFTs is required. Being a disciple would blind an investor from the most obvious quality of art, that its value is part and parcel subject to the Greater Fool Theory: When items don’t produce cash flow, the only way to make money is if someone else comes along and is willing to pay more for them. But, most assets in the species of collectibles do. One person frames a Ken Griffey Jr. baseball card while another attaches it to their tire spoke for neighborhood noise.

Digital art is no exemption to this. Not everyone needs to value digital art, but for those who do, they will want to show it off.

“Painting is just another way of keeping a diary” — Pablo Picasso

Source: https://medium.com/coinmonks/in-defense-of-an-optimistic-future-for-nfts-3e250e41334a?source=rss——-8—————–cryptocurrency

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