With the help of some pandas(!), a conversation with Super Lucky Di one sociable night, and Colin & Samir’s education on creator NFTs, I’m investigating whether I should abandon stocks and shares for… K-pop? What’s an NFT? What’s the cheapest NFT? Why else would you buy NFTs?
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Watch/Listen To Should You Buy A K-Pop NFT? via YouTube
Transcript: Should I Buy An NFT
Bear: [00:00:00] I was talking to the lovely Di Coke from the competitions blog Super Lucky a few months ago about what I should make next for the podcast and YouTube. And she said, why don’t you investigate K-pop NFTs? And I thought, I know nothing about K-pop or NFTs, so that sounds exactly like the criteria for a topic that I could talk about.
Now, one of the reasons I’m not daunted on a daily basis about being ignorant and inept is because of this fabulous website known as YouTube, you might’ve heard of it, where you can learn about just about anything. I don’t even really use the search bar thingymagij anymore. I have a number of channels that are my go-to and Colin and Samir are my go-to channel if I want to know anything about the creator economy.
What has the creator economy got to do with personal finance? Well, there is an overlap there between NFTs that you can invest in as an individual with the idea of making yourself a profit in future and NFTs that creators can use in order to finance their future projects.
Colin: An NFT stands for non fungible token, and basically [00:01:00] once you upload an asset to the blockchain, it can be registered certified as a one-on-one. And that’s when it’s known as an NFT.
Samir: The certificate of ownership lives there in the blockchain. And essentially is saying like you own this unique asset, my question was, wait a second. This is a picture. This is a JPEG image. Couldn’t you just put it on your phone and now you own it, like, yeah. But you can also do that with like a Basquiat piece or a Picasso piece.
Colin: And you said own it. You don’t own it.
Samir: You don’t own it. The certificate of ownership is, what you’re paying for.
Bear: Got it. Now while I understand what the NFT is, my first instinct is that this possibly isn’t where I would want to park a lot of money. If you look at the 10 most expensive NFTs of all time, they tend to be in six, seven figure amounts and revolve around buying artwork. I’m not very likely to buy a Picasso anytime soon, and I’m not any more likely to buy a 1 million pound NFT of an artwork either.
What if you could buy [00:02:00] an NFT for only $2 though? would that completely defeat the objective? And do I need to know anything about k-pop? Now after a bit of exploration, I came to the conclusion that K-pop is a vast sea, and I’m already autistic with a number of special interests.
And I’m not convinced that K-pop is the kind of rabbit hole I can afford to add to my life because I might never resurface. I did however, find an article from a K-pop fan. Andy Boxhall invested in a Moment from one of his favorite K-pop artists. So this was a collection of three video files limited to 2,500 editions.
So there’s three ways of looking at the value of his $2 purchase. So one is because they’re video files, just like buying a artwork, there might be some rewatch value here. So what enjoyment do you get from the media itself in terms of that? He found it quite unsatisfying. The first video was a preview of one of the later videos.
That sounds incredibly pointless. The third video was her signing her signature. So not something that he was really interested in watching [00:03:00] again and again and again. The second piece of value is in how exclusive this investment is. And as you can imagine, even though this was a limited edition opportunity at only $2, that takes away a lot of the exclusivity, doesn’t it? So it’s perhaps not as special to the owner as only an NFT that’s one of a kind and cost 5, 6, 7 figures.
And that links to the third cornerstone of value if this is an investment, which is, could he sell this on? And the answer is probably not. NFTs originated with the idea in the same way that if you paid for a painting at auction, you might go back a few years later and sell that painting for more and make a profit. Investing in an NFT is meant to have this idea that you could perhaps sell that digital token on for even more money in future.
But if you’ve only paid $2 for this kind of merchandise, what you’re really investing in is just the artists themselves and being part of that community. It’s not something that you’re likely to reap an investment from for yourself in terms of [00:04:00] hard cash. And yet people still buy them. So one of the contributors to the article suggested that the value in NFTs is that because they’re digital, you never lose them. Whereas we might have lost a lot of things growing up, or you had collectibles as a child, like Lego, something like that, that you sold on.
Perhaps your Pokemon cards would be worth a fortune today if you had looked after them or kept them, or had the money to invest in any in the first place. This seems to appeal to the idea of loss aversion. I’ve talked about that previously.
Will Smith: And it’s just a red button in there. Yeah. I’m not touching it, so, but you’re younger. So you’ll heal faster –
Tom Holland: There’s nothing in there
Bear: We do psychologically as humans seem to feel a loss more strongly than gain.
So it seems like the value of being an exclusive owner of something, or an exclusive group of people who have ownership of something is most valuable because if it’s digital, there’s no way to lose that ownership. Actually, there is one way to lose that ownership.
There is a question about what happens if a NFT platform goes away. Surely your digital token will [00:05:00] also just vanish into the ether if that company doesn’t exist anymore. The other use case for NFTs when it comes to investing in artists or creators is things like the documentary that Yes theory are making at the moment as I record this. So they’re financing a documentary by selling NFTs.
If that sounds a lot like the days of kind of Kickstarter, where you would just chip in to help someone get their film made or their product off the ground, this is very similar. It’s that idea of saying hi, I want you to tell the story you’re planning to tell, so I’ll chip in a bit. And the only difference with this is that those contributors will have a digital token that says that’s what they did.
I think the way that I’m probably going to think about NFTs going forward therefore is that their an investment in the sense of I can pay into things that I want to see get made, and I can maybe use them as a way to support independent creators and projects that I think aren’t going to get made otherwise.
But as far as investing in it as an alternative to, or in addition to [00:06:00] stocks and shares, I mean, I struggle at the best of times to find a buyer for really common items. This all sounds to me like something where if I try to sell my NFT on for more money, I would just discover that because it’s not attached to a 1 million pound artwork that nobody cares.
So I think I’ll stick to the familiarity of stocks and shares. Is it a good thing that the NFT market is being made more accessible and that you could buy an NFT for as little as $2? Or is it a false economy?
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