Pokemon NFTs, but with that thicc. It seems ridiculous, and it probably is. But as an economics professor once told me- never underestimate the ability of the market to create a product when there’s willingness to pay for it. As pointed out below, the Pokemon franchise is insanely valuable. Things can get crazy. Silly, pixelated NFTs are selling for millions. Dogecoin, a cryptocurrency with no actual real world use case other than getting some laughs, has a market capitalization of nearly 40 billion dollars and intense backing by Elon Musk, the world’s second richest man. This article explains NFTs and their value, and explores a little about humanity’s ability to collectively value different things.
It’s time to start taking NFTs & the metaverse seriously
For most people, the idea of paying money for something that only exists digitally doesn’t resonate. But that’s changing. NFTs are the offspring of cryptocurrencies, and are relics from the metaverse future. What seems strange now might not be so in the future. First of all, it’s worth it to point out that younger generations in particular are more privy to the concept of the metaverse and unique digital property. If you go to a store and buy a cool shirt that fits well, you’re expecting other people to see you in that shirt and note that it looks great on you (or you look great in it). This exact same phenomena happens in games like Fortnite- players purchase skins (outfits) and then show off those skins in front of their friends and others who they play online with. The distinction between “reality” and virtual reality isn’t as important. To younger generations, the metaverse is more real. To us, it will become more real as time goes on and technology advances. What is the metaverse? The full metaverse is where distinct virtual worlds coalesce into a single integrated online world that is in turn integrated with the physical world. If you think about something like Grand Theft Auto V online where a massive open world is hosting hundreds of players- that’s getting pretty close to the metaverse. Although the integrated metaverse with the physical world is decades away, the building blocks are being laid today.
What makes an NFT?
NFTs are the art of the metaverse. What distinguishes an NFT from any old GIF or JPEG is that the NFT has a limited number of owners (or just one), and that owner can be verified on an immutable ledger that will exist forever (the blockchain). Because of the blockchain component, NFTs must exist on a cryptocurrency network, most popularly Ethereum. Then there’s the art part of NFTs. If you think about what art is in the real world, it has a few characteristics:
- It is unique and/or one of a limited number
- Its value appreciates over time
- It has to be taken care of
- You can enjoy it each and every day you own it, providing a daily utility
- It’s actually one of the best stores of value there is
NFTs have all of these properties except for need to be taken care of, and possibly the daily utility derived from owning something. You can’t hang an NFT in your bedroom- well, I suppose you could install a screen and have it on that screen, but this is distinctly different from owning a physical Picasso painted by the artist himself one hundred years ago. Like art, NFTs are bought and sold. Most NFT traders have made insane gains over the past few years, which leads me to believe that the space is pretty overbought right now- the worst time to be entering a space is when greed is abundant and everyone is FOMOing in to chase those profits. In order to make money trading NFTs, you need to have buyers who are willing to pay more than what you paid for the art- and if the price keeps going up like it has been, we’ll eventually run out of buyers, and you’ll be stuck ‘holding the bag’.
Short for “pocket monsters”, a Japanese franchise that started in 1995 as a GameBoy game has since become a major cultural phenomenon throughout the world, with shows, movies, trading cards, and new releases of Pokemon video games coming out every year. Unbeknownst to me prior to this article write, Pokemon is the single highest grossing media franchise of all time, with current annual revenue of over $105 billion, roughly the GDP of Morocco. That’s more than the annual revenue of the Star Wars and Harry Potter franchises combined, an impressive feat.
Thicc Pokemon NFTs
You can check out this market at OpenSea to explore the various Thicc Pokemon NFTs that are on sale. The NFTs are more or less parodies of the Pokemon trading cards, which hold significant value in the physical universe. There are currently only a total of 88 different items for sale, which comprises less than 10% of all Pokemon, so don’t be surprised if what you’re looking for isn’t on the marketplace. Die hard Pokemon fans might rightfully think this is an abomination, since each of the creatures are outfitted with some heavy backsides. The NFTs are based on the Ethereum network, currently the largest network that can field smart contracts and decentralized applications with a total network market capitalization of $400 billion. Keep in mind NFTs can and do exist on many different crypto networks, but the NFTs with the highest value (currently) are on the ETH network. Think of the Ethereum network as the Louvre Museum in Paris- the items featured there will likely be more popular than those in the Museum of Modern Art in New York (i.e. Cardano) or the National Gallery of Victoria in Australia (i.e. Enjin Coin). This doesn’t mean you can’t make good money trading NFTs on those networks. Most other cryptos have created bridges to Ethereum so equivalent digital assets like NFTs can be minted on these crypto networks- pretty cool.
Buying NFTs and closing thoughts
To purchase items on OpenSea you’ll need to have some Ethereum stored in a wallet somewhere- the wallet can be an exchange wallet, or a software or hardware wallet. Various amounts or fractions of Ethereum tokens are the asking prices of the assets on OpenSea, so if the price of ETH swings (which, it’s a crypto, so it’s going to swing constantly) you’ll see some price movement up and down of the NFTs on sale on OpenSea. Keep in mind that the crypto space is extremely volatile and you need to watch out- only spend what you’re willing to lose. With that said, gains on NFTs have been absolutely nuts in recent years. If NFTs behave anything like art, it means they’re a good investment, as art has been one of the best performing asset classes of the last 30 years. If you’re into crypto right now, there’s no question that you’re an early adopter. If you’re into NFTs, you may even be closer to the tip of the spear when it comes to early adoption of technologies that could be a big part of humanity’s future.