NFTs are coming back

[LordFall]

I want this timestamped so I can say I told you so. I think NFTs are a fundamentally great technology and the mid 2022 crash of the industry has no bearing on it's potential future success. 

You see it today with collectibles blowing up as people are looking for a mix of entertainment and personal finance. It just makes so much sense. I think web 3 as a whole and Web 3 gaming are gonna be huge. If I had to give it a timeline I would say in about 5 years bullish case and by 2035 latest. For it to surpass it's previous market cap of $40 billion 

It's also gonna piggyback on the AI slop dissatisfaction as generative AI makes anything digital very abundant. We are overall gonna be in an entertainment renaissance in the 2030s as generative video makes movie production and game production accessible to the masses. More consumerism and more entertainment by itself is not that valuable but anchored by a wave of investing in collectibles makes too much sense. Just to be clear the previous bubble was built from the euphoria of the money printing around the covid era and that overvalued basically non-products. That's not what I'm talking about. I'm talking about the literal concept of non-fungible tokens that will make video game items, media assets and perhaps all kinds of asset tradable on the blockchain.

I see it with the IP I'm building now Legend of the Abyss, making a cool plot and game is one thing but creating an economy that people can participate in and also get wealthy from has perhaps literally uncapped potential. Axie Infinity was the progenitor of web 3 gaming but in 10 years actual mainstream AAA titles will embrace the tech en masse. 

Edited yesterday at 12:38 AM by LordFall

[yetineti]

How do you propose this plays out?

I would like to relate this to Pokémon cards. Personally, I see zero value in Pokémon cards. I will never buy them. I think the value is arbitrary.

Unfortunately, this is my perspective on gold, in general as well. I understand the extrinsic value. I do not understand the intrinsic value.

Obviously, gold does have intrinsic value for electronics, etc.

I understand this is foolish as well and I do not deny their actual market value/going rate and I predict it will not going anywhere, despite my lack of interest.

But how do you see this playing out? Will businesses include NFTs into their models for exclusivity, promos, gated access, etc. Will GTA 6 implement them to create a microcosm economy people actually trade and invest in? Do you see it as a foundation to a meta verse like Zuck?

I do not dismiss the value, like Pokémon cards. Extrinsic value can be just as expensive as intrinsic value. Yet, considering my disconnect with the Pokémon example, it is one thing for me to intuit that you are correct and it is another for me to see how it actually plays out.

Edited 18 hours ago by yetineti

[LordFall]

These are good questions.

Good place to start is separating intrinsic value from social value. The average Rolex is worth $14,000 USD. It's pretty useless as an item and is way worse than an Iphone but is 10x the price. Water and Oxygen are the substances with the most utility on earth but have no real tradable value. 

As a general rule, human beings assign astronomical value to three things: scarcity, social proof, and liquidity.

Pokemon cards aren't valuable because cardboard is expensive or they have real world utility. They're valuable because they are a tradable product valued by tens of millions of people on earth and have a built in mechanism for scarcity. 

Now let's go to Counterstrike skins. It's a market with billions of dollars of trading volume(liquidity) and rare knives regularly sell for $30,000-$150,000 USD. For pixels mate. Who controls this market entirely? Valve. If they ban your account or decide to shut down the platform, you're shit out of luck. I played League of Legends for 10 years, spent $2,000 of my own money and got to Challenger which is top 0.01%. What is my account worth today? Maybe like $400 and I have to go through a complicated video game black market service to sell it. Very low liquidity.

The AI revolution is gonna be what starts out the NFT craze again. Why is the average person vulnerable to AI? They are dependent on labor and own zero or very little assets. I think the logical conclusion is everyone starts obsessing over owning and creating assets. What makes assets worthwhile? The previous 3 things we mentioned. The one we didn't cover is social proof. What segment of society has the most status i.e. social proof? The entertainment industry. 

If I guess how it's gonna play out it's gonna go wave of AI layoffs -> Agentic AI getting praised as the solution -> AI slop becoming even more common -> NFTs becoming a mechanic for scarcity in a now digital abundant world. 

Next year is gonna be the year that AI media starts taking off. There is fundamentally not that much value in pure entertainment, you can't have a society operating on watching movies. You can have a society where most people are incentivized to use AI themselves to make their own money but that's hard. What's easier than teaching yourself how to become an AI savant? Trading assets based on your favorite form of entertainment. 

I think it's gonna piggyback right off the creator economy that took off with social media in the 2010s. Many people made careers out of building a business off of social media. Social media represents web 2.0. Web 3 is basically social media but with the public owning more of it instead of all the value being centralized in 10 tech companies. 

Edited 17 hours ago by LordFall

[Basman]

I feel like blockchain stuff and nfts are just a solution looking for a problem. There exist already successful digital markets long before nfts where a thing, like Runescape and CSGO. I don't see why you even need blockchain technology in the first place. Backend doesn't make a commodity any more valuable. 

Edited 3 hours ago by Basman

[Basman]

NFTs took off entirely as a speculative market. When the rug had been pulled and people realized that you couldn't use NFTs for anything it crashed. 

[LordFall]

46 minutes ago, Basman said:

I feel like blockchain stuff and nfts are just a solution looking for a problem. There exist already successful digital markets long before nfts where a thing, like Runescape and CSGO. I don't see why you even need blockchain technology in the first place. Backend doesn't make a commodity any more valuable. 

Ownership. Cosmetics owned and controlled by Jagex and Valve have 10% of the true value potential of an immutable asset. If you have a CSGO blockchain skin and valve decides to ban you and it can still be traded to other players and used by them in the next version of CS like games because we are now in a web 3 world vs a web 2 one; then the world changes forever.  

Of course. I think many lessons will be learned from the 2021-2022 era of NFTs and the next wave of products built around it will be far superior. 

Edited 3 hours ago by LordFall

[Basman]

2 hours ago, LordFall said:

Ownership. Cosmetics owned and controlled by Jagex and Valve have 10% of the true value potential of an immutable asset. If you have a CSGO blockchain skin and valve decides to ban you and it can still be traded to other players and used by them in the next version of CS like games

It's not just cosmetics sold in an official capacity, but also stuff like gold or accounts. The value applies to within the game itself. An immutable asset is only practical for speculation. It's not in of itself relevant to people playing a game and whatever market sprouts around it.

And making nfts that can be used across different games is bs. Different games have different code and assets. You can't just port stuff in. It has to be made specifically for that game. At that point it doesn't make any sense to not make people buy thing separately.