Are NFTs worth anything beyond speculation and hype?

This is a C N A podcast, real Art or N F T S as an investment

personally. Yeah. Real art.

Top three factors to consider when buying an NF

T, does it have a use case in the world? Why am I buying this N F T? Does it have intrinsic value to me? In which case? That's a personal choice? And what Blockchain is it on? Is it something that is easily transferable, easily re sellable

N F T s by now or never?

If you want to get into the space, I would never say never maybe now.

Good to have you with me on money talks. I'm Andrea Hang now N F T s or non fungible tokens. They broke into the mainstream news narrative in 2021 with their eye watering price tags. Jack Dorsey, founder of Twitter sold his first ever tweet as an N F T for $2.9 million. Digital artist. People sold an N F T of his work for $69 million. Virtually anything digital can be converted and sold as an N F T video clips, audio wave files, game Avatars art. Even memes, maybe it's time

so nice to be here

with you. Good to have you with us in person to. Okay. So if you had to explain N F T to a complete newbie, how would you do it?

Right. So first I would say let's break down the three words. So it's a non fungible token. So non fungible, more or less means that it's unique. So when we talk about crypto and Blockchain, you can trade if I have one ether or one Ethereum, I can trade that for another one and I have the exact same thing and

an ether and Ethereum is a currency.

It's a Cryptocurrency. So it's like having $12 note or one ether. You trade it for another $2 note or another ether. That's fungible. You can have the exact same thing, but with an N F T it's non fungible, it's completely unique. And so it's really just this unique asset that is stored on the Blockchain.

Okay. Have you bought an N F D? Do you have, how many,

maybe too many to count? Now,

what do you mean too many? I

have a lot of N F T s mainly because when I was getting into the space, I think the only real way to fully understand it is to dive in with.

Of course, of course. Um And are the N F T s that you bought mainly art or what kind of mess did you

get? I've bought N F T s that are art. I've bought an N F T that supports the production of a movie. So as that movie goes into production and if it earns money, I get some of that royalty back

to myself. Okay. Okay. So anything digital, including this podcast as an audio wave file, it can in theory be tokenized and then sold it as an N F T,

right? Would you like me to make this an N F T? I can do that?

Fabulous. I think my producer wants to buy it. Maybe not, depends on how much it's gonna cost, I guess. Okay. So the, the N F T market said to be worth $22 billion in 2021. It blows my mind. So who is buying up all these N F T s? Are they art collectors, investors speculators or just like fans of memes?

Right? So I think when we're talking about N F T s in this case, it's, it's one specific use case. So it's looking at the art or the collectible aspect of N F T s. The N F T itself is the underlying technology. It's not the PEC itself. And so I think when we're talking about art and collectible N F T s, yes,

kind of like collecting those cards, right? Those Pokemon cards. It's

exactly like Pokemon cards. Anyone can buy one until you get into the really rare stuff. And then yes, it becomes, it becomes very pricey

when you say it's worth this much. Half people paid actual money for these N F T So we said earlier that the N F T market's worth 22 billion as far as 2021 goes, are people paying actual money? So did Jack Dorsey actually get paid 2.9 million U S dollars for his first tweet as an N F T? Well,

so he probably got paid in Ethereum is my guess. And then he went and transferred that Ethereum to a fiat currency like us

dollars. The only way to transact an N F T is through a Cryptocurrency. For

the most part, there are some online N F T marketplace is that let you transact with your credit card and they take care of that conversion into Cryptocurrency and their back end and you never see it, but you can pay with your own currency. Here's

something I'm struggling with why N F T s are even worth money. Like what's their intrinsic value? Because digital files are so easily replicated, duplicated. I mean, it's just right click on the mouth duplicate and it's there like another copy is there doesn't really matter if you have a certificate that you're the rightful owner of this piece of work. It just sounds like bragging rights to me. And how is that worth any money? Sure.

Let me break that down into two parts. So I think with N F T S it comes down to perceived value. So if I'm a little bit more reductive about it, how is a banknote worth anything, right? It's worth it because people believe that it's worth it, then it has the other layer of being backed by the government. So there's trust. So that's one aspect of it. If there are enough people that believe that there's value, there's value. And then

mean, postcards at the art gallery. Exactly. So

millions of people have those, right. The same way millions of people can right, click on your N F T and download the JPEG, but only one person has that Monet hanging in their house or that van Gogh hanging in their house. And I could tell you that I do, but you'd never know if I was telling the truth or not. With an N F T, I can show you that I really do own

that. Yeah. Exactly. And I think that's the thing that I'm struggling with because it's, it's not a physical item that I own. Right. And while I'm also not paying it physical money per se in the currency that we all know, it's the fact that I'm doing everything digitally and it's not tangible. And I think some people struggle with that. I

agree. And you know, I think that comes down to why N F T s were created in the first place. We're increasingly living more of our lives in the digital space and say, let's take a very real life example. I have a picture of myself that I posted on Instagram. Anyone can view that picture, but it's not mine per se. It's a copy that exists on Instagram servers. So if I actually wanted to own that picture and have a way to prove that it's my picture and fts can come in to solve that problem.

Okay. Okay. That's one way of looking at it because I take a lot of nice photos on Instagram and I don't own them. No. Okay. So game developers, they've also hopped onto the bandwagon. They're developing in game items and avatars and they're selling them or marketing them as N F T s that can be bought and sold and then used within the game sphere only. So I see the value in that as an asset but things like tweets memes that blows my mind memes or a picture of a board monkey. I mean,

guess when it comes to investment, I think the rule of thumb is only to invest in things that you fully understand, otherwise I would call it more speculation than investment. And that's where N F T s can be seen. I think more as a speculative asset. You can even say it's akin to buying a lottery ticket. It's, you're hoping that you win something, you're hoping that it increases in value.

it that I need to understand? If I'm investing in an N F T,

it can be very volatile because there's no real trust backed entity there. When you're talking about a picture of a board, a por something something very interesting that have been happening in this fear actually is that the sec in the United States actually has set some sort of precedent saying that N F T s can be considered securities because you're depending on the company that produces the N F T doing well to give value

I heard of an artist who gave the audience at a show the choice to buy the N F T of his artwork and his artwork. So people who bought the N F T s okay. They ran along, they had their N F T s and then the one that decided to buy the artwork were basically left hanging because the artist decided to go burn the original artwork. I mean, this made headlines back in the days. What are your thoughts on that? So

that momentum works. We actually used that exact example in our first three report. And I've had people make the argument to me that the same way you can lose a piece of paper, you can forget your password and then the same issue, right? You've lost the N F T. But that's actually the argument that I would make back in that case because that's exactly right. A flood can damage a piece of paper,

Hello, everyone. My name is Christina and I'm Adrienne and we're the host of a podcast called work it if you never heard of it. Well, it's a good time to tap in, in the last 20 episodes. We've discussed topics like how to negotiate for a salary increase or how to get along with younger colleagues who have different values from you, which incidentally is our top performing episode. If what consumes your life and you want some perspective on issues like management stress,

know, that's a good question. I think the N F T s that are less speculative are the ones that have utility so you can buy N F T s. Beyond just buying them to collect, you can buy them as tickets to concerts, you can buy them to watch a TV show. There's a TV show out there that I think stars Mila Kunis that you need to buy an N F T to be able to watch and so they can serve as verification in that sense or they can serve as a ticket to a

concert. Alright. Okay. Should I only go for N F T s that are backed by a bank or a known institution? I'll throw a

question back at you. Should you only buy stocks and bonds that are backed by, you know, trusted entities? I would say yes. Yeah, I think people should answer both of those questions in similar ways. Okay.

That's a good way of putting it. So the NFC market, It's exciting for investors because you know, there's a lot of amazing growth potential, at least that's what's been reported, right? So some reports estimate a compound annual growth rate of 35% per year. That's huge compared to other investment classes such as stocks or property. Obviously, given the caveats that we've been talking about when it comes to NFTS as an investment.

You know, digital assets in general are in their early days. Will there be more digital assets moving forward? How do we link physical value to these digital assets? These are all questions and proving ownership of those digital assets has been a challenge and we really do believe there's a future for N F T s, but we don't know how big or small that future

Yeah, that's a very important question to ask, especially if you want to look at it in terms of an investment. It depends on your investment personality, right? Whether you're an earlier doctor or you're a follower, you want to see what happens. It really just does depend on what kind of risk appetite you have as an investor. Right?

Absolutely. And I think we think about the way people do due diligence on traditional investments. It's important to do that even when you're looking at an N F T and N F T project, even if you're just doing it personally. Yeah,

absolutely. Okay. So N F T s we established they are largely paid with Cryptocurrency like Ethereum. So their value is then tied to crypto, which we know is very volatile right now. Should your average retail investors even be looking at N F T s as an investment? So I know a lot of younger people are turning to retail investment, a lot of it's very accessible now and they're jumping on this N F T bandwagon. What's your

take? So me personally, I would say it has become more of a speculative asset when we're talking about our N F T s and the types of N F T s that you would buy at open sea that are attached to pegs, right? Their digital assets in their early days, we believe that there is a future in front of t is how big that future is. We're not totally sure what their use cases will be that move into the mainstream. We're not totally sure will there be more digital assets moving forward?

I already own an N F T, should I be looking to sell it now or should I hang on to it?

Yeah, that's a good question. Like I said, not all N F T s are created equal.

Have you sold any N F T s in recent times or are you hanging on to all of them? Still?

I honestly could not for the life of me. Tell you which N F T S I have right now and where they are because

you bought, just

because I've bought, I've bought quite a few.

Okay, final advice for our listeners who may be thinking of investing in N F T s or just buying an N F T, please,

please do your research only invest in things that you fully understand and really look into the technology behind N F T s because it's so interesting and it is going to be something that is prevalent in our lives beyond just collecting art and be open minded. You never know where it's gonna go.

All right. So thanks so much, Sanya for spilling the tea on N F T s giving us a clearer picture on what makes them valuable time. So our N F T is worth it, I guess as with all investments, know your own risk appetite, do your homework. Sanya has emphasized this over and over again, do your research before committing and thank you to you, our listener.