Two weeks ago, it bought CryptoPunk 7610.
The price tag: an eye-widening $150,000.
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CryptoPunk 7610, which Visa bought for $150,000 on August 18. Source: Visa Inc.
CryptoPunks are a series of 10,000 digital images of misfits and eccentrics that folks collect and use as their online personas. (You’ll see a lot of crypto folks use their CryptoPunks as their Twitter profile photos.)
Two Canadian software developers who run a company called Larva Labs created them in 2017.
And they’re considered some of the earliest non-fungible tokens, or NFTs – digital collectibles that exist on a blockchain.
It’s tempting to scoff at a company shelling out hundreds of thousands of dollars on a digital image. That’s been the reaction of many folks in the mainstream press.
But as our tech and digital assets expert, Jeff Brown, has been hammering home… that’s a BIG mistake.
NFTs are gaining momentum as digital fan memorabilia that stars in the sports, entertainment, music, and art worlds can use to engage with their fans.
And they’re attracting big bucks. The 10,000-image CryptoPunk collection is already worth $4 billion.
As you’ll see today, it’s just one of many head-spinning developments in this brand-new market.
That’s why Jeff reckons NFTs will become one of the most profitable areas of the new, blockchain-based internet he sees coming.
Generally, you can copy any piece of digital music, art, or design without any reduction in quality.
But blockchain technology makes NFTs digitally scarce. Blockchain is the distributed ledger technology behind bitcoin (BTC) and other cryptocurrencies.
Instead of representing a unit of currency, like bitcoin, NFTs represent unique digital files.
That’s why they’re called “non-fungible” tokens.
Bitcoins are fungible. Each is the same as every other bitcoin. That’s what makes them useful as a currency. You don’t care which bitcoin you own, because all bitcoins are the same.
But like other collectibles, NFTs are not interchangeable with each other. Each one has its own unique set of characteristics.
Other than that, a good way to think of NFTs is like other cryptos you own.
You hold them in a digital wallet. You can exchange them for other crypto.
And you can then trade them with other collectors, like we used to do with sports trading cards.
They’re programmable. So they can award other benefits to their owners outside of the digital realm.
Here’s Jeff with more…
Fan merchandise is a perfect application for NFTs. Teams could invite NFT holders to Zoom calls and private events with their favorite players. Teams could also send signed jerseys and other memorabilia to NFT holders.
This is a great way to drive fan engagement. It’s far more exciting and interactive than email and social media posts. Because NFTs can make fans feel like a key part of the team.
There are similar digital-physical – or “digiphizzy ” – applications for NFTs in the music industry.
In March, Kings of Leon became the first band to launch a new album –When You See Yourself – as an NFT.
In fact, the platinum-selling rock band released the album as a series of different types of NFTs called “NFT Yourself.”
Not only do fans who buy these NFTs get bragging rights with other fans… but they also get VIP status.
One NFT type in the series includes real-life perks for fans, such as front-row seats to a Kings of Leon concert during each tour for life. Holders also get special treatment, including chauffeur service and hangouts with the band before shows.
Take the digital-physical NFTs serial entrepreneur and internet celebrity Gary Vaynerchuk issued in May.
GaryVee, as he likes to be called, has created an NFT series called VeeFriends.
Each carries a unique hand-drawn design by Vaynerchuk. You can collect them and trade them with other fans. But they’re also tickets to VeeCon, Vaynerchuk’s annual conference.
Each VeeFriend NFT gives fans three years of admission to the conference.
The blockchain keeps records of authenticity, preventing people from using and selling fake tickets. So this type of ticketing will eventually disrupt the entire events industry. And that’s huge…
The industry had a valuation of $1.1 trillion in 2019. By 2028, that’s expected to hit $1.5 trillion.
I’m 45. I was in college when the internet was in its infancy. So I remember the world before it started to go digital.
I have to admit… I was skeptical of NFTs at first. I couldn’t understand what made them so groundbreaking.
But the more I’ve listened to Jeff… and the more research I’ve done… the more convinced I’ve become that NFTs are part of the next evolution of the internet.
And if that’s true, the profit opportunity ahead is astronomical.
I’ll have more for you on what’s coming in tomorrow’s dispatch… including how folks are wearing their digital sneakers in an emerging virtual world known as the Metaverse.
In the meantime, if you’d like to learn more about investing in NFTs and the broader blockchain trend, watch the free presentation Jeff hosted last week.
Regards,
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Chris Lowe
September 1, 2021
Dublin, Ireland