Rock 41, I Miss You
If these posts are interesting to you, please subscribe:
and share!
Also, feel free to follow me on twitter: @azakmay
Introduction
Price is the result of future expectations, and right now the future expectation is that all NFTs will go up. On that note, I have a quick story to share about how I bought an NFT for $250 Monday night and then sold it for $3,300 three hours later.
To start with, I think we can all agree that the world is weird and getting weirder, but before we dive in too deep, let's get a little background on NFTs. If you spend any time on Twitter, you can’t help but have seen this term. NFT stands for non-fungible token. Fungible means it can be ‘replaced by’. So, think of a dollar bill. One dollar bill is no different to me than another one; or in the crypto space, one Eth is no different than another Eth. However, a non-fungible token is unique and not replaceable, and exists on the blockchain forever. It's kind of like owning a painting from the original artist, but in the digital world. The largest collection of NFTs is here. I recommend perusing this site to get an idea of what an NFT is.
Story Time
Now that we have an idea of what an NFT is, here’s my story of doing fifteen minutes of work Monday night, owning an NFT for three hours and making ~10x profit. It all starts with a collection of 100 rocks from early 2017 that have been selling for absurd prices: story here and you can view the entire collection here. Here is a picture of one of the rocks in all its glory:
For whatever reason these rocks have skyrocketed in price to where they were selling for ~$500k on Monday night and over $1M now. I knew that these rocks were selling for an absurd amount, and I was not going to be able to get my hands on one of them. However, as I was scrolling twitter, I saw a unique opportunity come across my twitter timeline.
These were some newly minted rocks. Minting is just the process of adding an NFT to the blockchain. After seeing this tweet, I headed here to find my newly minted rock for the bargain price of ~$160 (0.05 Eth), or at least I thought. There would also be $75 or so in gas fees to confirm the transaction, but whatever, you can’t put a price on beauty. I go to bid on my first rock, wait for confirmation and…too late! Someone stole rock 44 from me! But no matter, rock 41 looked just as nice. I press buy, confirm the transaction and rock 41 is mine. Party time! Member of ethertopazrock club!
Well, the party didn’t last long. My wife had been calling me downstairs for dinner during the middle of my purchases and I was now 15 minutes late. Instead of being on time and not needing to bring up that I had just purchased a rock photo for ~$225, I now owed her an explanation. No worries though, I had my phone and could show her the picture and she'd soon see the value. I started explaining to my wife why I was late and was met with utter confusion. She didn’t see the value (valid), and so I explained that I was going to flip it, that someone would likely buy it for more, but to do this I needed to get back to my computer and make it available to buy. Again, no amusement on her end, and I was told "If you love your computer so much, why don't you sleep in the guest room with it tonight". Oh, how wrong she was going to be!
We finished our meals, and I was able to get back upstairs and list my rock. I initially listed it at 1.5 Eth (~$4,500). An hour passed and I could see I was getting some views but no offers. I started to get a little nervous, so I relisted my rock for 1 Eth ($3,000) - basically getting robbed at this point! After more refreshes and views, I see my first offer come through: $1,500. I run to find my wife and tell her. She can't believe it and, honestly, me neither. I headed back to my computer with a decision to make: do I sell at half of the asking price? Is my rock 41 only worth this much? My wife texts me, "Are you gonna take the offer??". Two "?"s means she not asking, she's telling me to accept. I go to accept the $1,500 and boom, someone buys the rock for full asking price. Enter grief!
Here is the history of Rock 41 transactions
and on etherscan.io.
What Was I Thinking Next?
In all seriousness, my next thought was, "Did I sell for too little?" I mean that is one of the most absurd thoughts. For 15 minutes of work, I made $3k profit on something that has no utility and likely no value (you can tell that I am not ready to quit on Rock 41). But this is the current state of NFT mania. Thoughts like this are exactly what drives speculation. Granted, there are some cool projects out there which I will point to at the end, but the majority of NFTs are people speculating on "price go up" and hoping they're not going to be the last one left holding the rock, NFT or whatever. The whole value to most of these NFTs is buying them and hoping to sell them for a higher price.
Now there are a lot of people on the internet saying there is some merit behind these NFT projects. Exhibit A:
Let’s dig deeper, and btw, I do encourage you to read Status Monkeys.
I agree that people will pay for status, and as people spend more time online, they can distribute that status to far more people than buying a Ferrari and driving it around town or taking a Louis Vuitton purse to dinner. I love getting a new avatar in Fortnite and dressing my avatar up with the latest glider, so I understand the supposed merit to NFTs. I also just think we need to be honest about what is happening right now vis-á-vis speculation. Because the flipside of NFTs that also comes with being part of the internet is how incredibly easy it is to make an NFT. You can literally make any tweet an NFT, it is that commoditized. Unlike manufacturing or painting, a computer can generate pixels for you fast, so the explosion in the space is happening on a massive scale. That is where you end up with lots of NFTs that add no value and are driven purely by speculation, and I think that is what was shown with Rock 41.
Conclusion
I think we are most likely in a hype cycle driven by speculation as shown by my short tale. However, I think this is also driving some interesting use cases in the space that I am excited to see evolve further. Below are a few that come to mind. I look forward to diving into all of this in the future.
Rock 41, I miss you.
Cool Projects in the NFT Space
ENS
ENS: A useful and handy NFT. Let's you use your name across lots of dapps and many other services.
Artwork that I personally like:
Virtual museum of NFTs. Probably one of my favorite projects in the space.
Cool looking Apes
The price of these is absurd, but this is one of the greatest photos to come out of all this
Games using NFTs
NFTs in games is one of my favorite use cases. If you could take your avatar wherever you go across the internet, and it represents your unique identity that is cool and powerful. Buy limited goods that I own and can resell in a virtual marketplace, and you can quickly get an idea for the economy of the metaverse. Attend a virtual concert hosted by Spotify with the same Avatar that I just played Fortnite with.
List of some interesting games using NFTs
https://axieinfinity.com/ (Read this NB and this Razor's Edge for a complete picture)
https://zed.run/
https://staratlas.com/