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Friday, May 27, 2022

FUD FAQ | A Weekly Community Thread | Week 42

This post was originally published on digitalx

  • Where does the value of NFTs come from really?

Is it the 3D model? The expensive GPUs and rendering equipment used? Or the hype and clout surrounding the PFP release?

Well, yes and no. But also not really.

What we need to ask ourselves is where does the value of anything come from. Some people believe that it is all made up and that the value of anything can only come from attention and social psychology. That it is all subjective. But, in a truly subjective world even all of those beliefs are meaningless.

The reality that we live in is made up of a combination of subjective and objective; stories, opinions, local and global reference points and sources of wealth.

In that kind of context, NFTs are a real breakthrough vehicle, container, vessel and mechanism for the ownership, trade and delivery of all kinds of stuff. Some of what’s contained within NFTs has tremendously powerful inherent value. But, when crap is minted into an NFT it is still crap. Garbage in, garbage out.

If we just look at where the value comes from for NFTs that do contain some kind of value, or more importantly, contain the ability to generate more value, then it breaks out pretty simply; the wealth generation capacity comes from the value of its story, the status it represents or can impart to an NFT owner, to the style it wraps its holder in, the access it provides to enhanced groups and experiences, the governance it conveys, the staking it enables, where, how and if it can be worn, and, most of all how it can be used to directly produce anything else. NFTs are abstractions in code that in really minaturised ways can define the new factories.

That encapsulated production capacity literally creates wealth.

  • $MONA price?… again? 🧐

The telegram chat always lights up with speculators and scavengers as soon as there is a red candle. For anyone that has spent enough time in markets to have any clue what they are doing, it becomes clear quickly how divorced fundamentals can become from market sentiment on any given day.

The less clarity there is in social status and story driven markets and the more price is tied to wild spikes in attention generating trends, the less connected the underlying reality of technical and community progress to asset prices on any given day will be.

It would certainly be nice if more people understood this and the same questions didn’t come up for their own self reassurance over and over again.

As more people learn to understand the core wealth generating traits of NFTs and other web3 mechanisms these kinds of questions will likely finally start to diminish and become nostalgic memes we can look at in the rear view mirror.

Tech Bros.

This says all you need to know, and some.

You can always rely on Wikipedia to set the facts straight lol… but seriously… who’s creating the uncensorable web3 Wikipedia?!

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