The crypto world was always a little offbeat, but with NFTs that unpredictability is amplified. NFTs are a component of the crypto ecosystem, traded and HODLed and flipped for profit, or liable to get you rekt, and yet there are some factors that distinguish NFTs from the rest of crypto.

Contempt

That is a strong word: contempt. But, it is true, NFTs set off a visceral reaction in some people. Strangely enough, you will see this particularly in parts of the art and gaming worlds. It is odd because NFTs bring fascinating new avenues to both art and gaming, and if you don’t care to go down those avenues, you can just not go down those avenues.

What I have seen is NFTs allowing artists and designers to take their work directly to the market, make initial profits, garner royalties and establish meaningful connections with enthusiastic collectors. And yet, NFTs have remained controversial in the art world. They are sniffed at as crass, trashy and irresponsible, but what could be more delicious than a bunch of sanctimonious art snobs having their party crashed?

Among gamers, the reaction can be even worse. Discord was always the social platform of choice for gamers, and so it was interesting when it was taken up (along with Twitter) by NFT projects. But, when Discord implied that it might integrate NFTs, an outraged rabble of users threw a tantrum, causing the company to backpedal.

A similar meltdown happened this month too, when OG games titan, Ubisoft announced it would be utilizing Tezos to produce blockchain games which include NFTs. Ubisoft has in fact been moving towards blockchain gaming for some time, but nonetheless, (some) gamers freaked out, and Ubisoft took down the trailer video for Quartz, its new NFT-incorporating gaming platform.

These reactions are baffling to observe, but what’s really fun is the reaction of NFT creators, collectors and believers. Basically, they don’t give a flying one, because they have diamond hands and crystal balls (no, I mean, they can see the future).

Emotional Attachment

NFTs with utility may be a good investment, but up to now, the most famous and expensive NFTs have been based purely around visuals. And, being non-fungible, they are unique.

This brings an additional component that distinguishes NFTs: emotional attachment. You will quickly offload a mid-cap altcoin as soon as you can make a profit. And, even with the more substantial coins whose fundamentals you believe in, and that you think have a long-term future, you might sell and buy back later.

But, that 8-bit koala with the 3D glasses? The llama smoking a pipe? My collection of intergalactic monkeys? Forget it, mate, hands-off.

A Few Good Traders

There appear to be fewer competent NFT traders than there are decent crypto traders.

Perhaps that is because NFTs attract a more arty design-focused crowd who are less interested in financial matters. There is the issue of emotional attachment, as mentioned. And, parts of the NFT world are based around collecting, which tends to mean people who hold on to what they buy, along with fewer potential takers if you decide to sell.

But, I also sense that quick trading is a little scorned. It is one thing to sell a bag of coins, but with an NFT, a certain amount of creative work has gone into it, and it might be a philistine move to simply flip it for profit.

Whether or not you care about being regarded as a philistine is another matter. But, from what I have witnessed, traders who intuit psychology, rather than those who focus on Technical Analysis, are likely to do better with NFTs.

A Gateway Drug

It used to be the case that people new to crypto were attracted by bitcoin . Then, having bought in, altcoins and their potential gains might exert some pull, and newcomers would start to experiment with other trades.

It may now be that the sequence is happening in reverse. NFTs, through their links with visual arts, are an initial gateway into crypto. What’s more, the crypto that is first forayed into, if entering through NFTs, will not be bitcoin, but rather ETH, or possibly SOL, Tezos or ADA.

If and when bitcoin comes into the equation then it is more likely as an endpoint, a place to park profits, rather than as an initial entry.

Profits Stay in the System

When you get big sales in the NFT space it’s likely that those profits will stay in the ecosystem. An ETH whale surfaces from the depths, hurls money at a new mint and the recipients of that money then cycle it down across other projects.

And, this mechanism is not a bad thing, as wealth becomes distributed, liquidity flows and creativity is rewarded.

The NFT world is sometimes characterized as nothing but profiteering scammers out to make a quick buck, but while there are scammers and cash-grabs to be wary of, there are a remarkable number of hyper-cheerful Web3 evangelists, who not only benefit personally from NFTs but work towards helping others to benefit too, and regard what they are doing as genuinely transformative.

The crypto world was always a little offbeat, but with NFTs that unpredictability is amplified. NFTs are a component of the crypto ecosystem, traded and HODLed and flipped for profit, or liable to get you rekt, and yet there are some factors that distinguish NFTs from the rest of crypto.

Contempt

That is a strong word: contempt. But, it is true, NFTs set off a visceral reaction in some people. Strangely enough, you will see this particularly in parts of the art and gaming worlds. It is odd because NFTs bring fascinating new avenues to both art and gaming, and if you don’t care to go down those avenues, you can just not go down those avenues.

What I have seen is NFTs allowing artists and designers to take their work directly to the market, make initial profits, garner royalties and establish meaningful connections with enthusiastic collectors. And yet, NFTs have remained controversial in the art world. They are sniffed at as crass, trashy and irresponsible, but what could be more delicious than a bunch of sanctimonious art snobs having their party crashed?

Among gamers, the reaction can be even worse. Discord was always the social platform of choice for gamers, and so it was interesting when it was taken up (along with Twitter) by NFT projects. But, when Discord implied that it might integrate NFTs, an outraged rabble of users threw a tantrum, causing the company to backpedal.

A similar meltdown happened this month too, when OG games titan, Ubisoft announced it would be utilizing Tezos to produce blockchain games which include NFTs. Ubisoft has in fact been moving towards blockchain gaming for some time, but nonetheless, (some) gamers freaked out, and Ubisoft took down the trailer video for Quartz, its new NFT-incorporating gaming platform.

These reactions are baffling to observe, but what’s really fun is the reaction of NFT creators, collectors and believers. Basically, they don’t give a flying one, because they have diamond hands and crystal balls (no, I mean, they can see the future).

Emotional Attachment

NFTs with utility may be a good investment, but up to now, the most famous and expensive NFTs have been based purely around visuals. And, being non-fungible, they are unique.

This brings an additional component that distinguishes NFTs: emotional attachment. You will quickly offload a mid-cap altcoin as soon as you can make a profit. And, even with the more substantial coins whose fundamentals you believe in, and that you think have a long-term future, you might sell and buy back later.

But, that 8-bit koala with the 3D glasses? The llama smoking a pipe? My collection of intergalactic monkeys? Forget it, mate, hands-off.

A Few Good Traders

There appear to be fewer competent NFT traders than there are decent crypto traders.

Perhaps that is because NFTs attract a more arty design-focused crowd who are less interested in financial matters. There is the issue of emotional attachment, as mentioned. And, parts of the NFT world are based around collecting, which tends to mean people who hold on to what they buy, along with fewer potential takers if you decide to sell.

But, I also sense that quick trading is a little scorned. It is one thing to sell a bag of coins, but with an NFT, a certain amount of creative work has gone into it, and it might be a philistine move to simply flip it for profit.

Whether or not you care about being regarded as a philistine is another matter. But, from what I have witnessed, traders who intuit psychology, rather than those who focus on Technical Analysis, are likely to do better with NFTs.

A Gateway Drug

It used to be the case that people new to crypto were attracted by bitcoin . Then, having bought in, altcoins and their potential gains might exert some pull, and newcomers would start to experiment with other trades.

It may now be that the sequence is happening in reverse. NFTs, through their links with visual arts, are an initial gateway into crypto. What’s more, the crypto that is first forayed into, if entering through NFTs, will not be bitcoin, but rather ETH, or possibly SOL, Tezos or ADA.

If and when bitcoin comes into the equation then it is more likely as an endpoint, a place to park profits, rather than as an initial entry.

Profits Stay in the System

When you get big sales in the NFT space it’s likely that those profits will stay in the ecosystem. An ETH whale surfaces from the depths, hurls money at a new mint and the recipients of that money then cycle it down across other projects.

And, this mechanism is not a bad thing, as wealth becomes distributed, liquidity flows and creativity is rewarded.

The NFT world is sometimes characterized as nothing but profiteering scammers out to make a quick buck, but while there are scammers and cash-grabs to be wary of, there are a remarkable number of hyper-cheerful Web3 evangelists, who not only benefit personally from NFTs but work towards helping others to benefit too, and regard what they are doing as genuinely transformative.