Buying and Selling Stars

It was nice to be in the office for the first time in almost a month for a few hours today, as I got to have lunch with some colleagues and get back "into it" - meaning teasing each other. I like that with this group, we can rib each other without anyone taking offence - or calling HR.

It was funny today, as one someone (I am the crypto kook) was talking about how ridiculous the prices of some of the NFTs are being sold for and how useless they are.

How can a low quality image of a monkey smoking be worth 400K? What idiot would pay that?

I agreed, it is not worth it. But the "idiot" is likely not quite what they seem.

When people hear large numbers, they think about it in terms of their experiences. Numbers like "$400,000" is the value of a house, something we can relate to and therefore, sounds like a lot. However, the same person hears that the government is spending $15,000,000,000 of tax money on war planes, and doesn't bat an eyelid. But, when it comes to something like a monkey picture, they look at it from their perspective in both usecase (none) and the price from the perspective as if they were to buy it themselves.

But, it is the same arguments people have over buying a Rolex or a Ferrari - Where is the value? However, the people that do buy a Rolex or supercar, aren't spending all of their money on those things. If you are buying a $10K watch, you aren't likely spending the last money in your bank account on it, as you might be worth several million, or more. Same with a Ferrari.

Same with an NFT.

The person spending $400K on an NFT isn't likely transferring the funds from their bank, they are paying in ETH or BTC or some other crypto and, they aren't likely spending a significant percentage of their holdings on it. For example, Ethereum is riding at 3100 dollars today, meaning that, so that expensive NFT is 130-odd ETH. Expensive?

Not really, if you are still holding 50K of the 100K ETH that you bought (or mined) back in 2015 for 70 cents each and have been trading back and forward the last six years. 130 ETH is less than a quarter of a percent of the total holdings and, do you only hold ETH now? Unlikely.

While these kinds of sales make headlines, the fact is that the people likely buying them aren't newcomers into crypto, they are crypto whales who just DGAF about value anymore, because they are stacked. 400K on a stupid picture for bragging rights is nothing when you are worth 150 million. But to the ordinary person doesn't know or understand anything about this kind of life, so they focus on what they understand.

But the same person hears about some rich person buying a G6 plane and think it is fine. A G6 costs around 60 million dollars, but that is not where it ends.

The total annual budget for flying a Gulfstream 650 private jet 200 hours per year is approximately $1,576,211 or $2,426,367 for flying 400 hours per year. source

Seems reasonable!

Most people would say, "fly first class, it is much cheaper!!

Sure - but a billionaire needn't worry about a million, or 60M.

A crypto-whale needn't worry about 400K either.

But, all of this aside, what many don't realize yet is that these early NFTs are like the two pizzas sold for 10,000 Bitcoin - a proof of concept. And now, they are expanding outwardly from being oddities into becoming usable and valuable assets and financial assets in their own right. Not just as a "buy-hold-sell" token, but something that can be used for an owner to generate ongoing income, whether it be through rentals, staking, usage in a game or who knows what else will be developed around them. NFTs are properties, not paintings on the wall.

What is going to be interesting is in the next few years as many of the applications and games that these people use daily start pushing into crypto tokenization in some way, and they say "it is different because...."

This is the development cycle, just like all the people who said they'd never have a mobile phone because they don't need one, but have one now. Those who said that digital cameras are never going to be high enough quality. The people who said that they didn't need a car, their horse was fine.

Innovation happens constantly and just because people don't see the future from today, doesn't mean they aren't going to understand or use it in the future.

I suspect that all of these people will accept it soon enough. Just like how they accept that now Bitcoin can be used to buy stuff.

I don't know if people still do it, but there used to be a thing where as a gift, they would "buy a star" for a person.

Talk about a useless gift.

Taraz [ Gen1: Hive ]