Logan Paul’s $3.2m & the 600 ETH NFT 🚀
NFTs are gaining more and more traction as influencers like Logan Paul and Gary Vee are beginning to preach, adopt them, and legitimize them.
So how did Logan Paul make $5 Million Dollars off his NFTs in a span of just 4 days?
Why in the world is this CryptoKitty worth so much?
What are NFTs ??
NFTs or Non-Fungible Tokens are essentially digital assets that act as collectibles similar to that of Pokemon Cards without the cardboard.
The appeal of these tokens is that they are non-fungible. Fungible means identical in every way and able to be replaced with a 100% accuracy.
Thus non-fungible tokens are unique in every way and unable to be reproduced to the smallest pixel and irrefutably verifiable.
Using trading cards as an example, the single biggest problem in the reselling space is that cards are easily reproducible. As time progresses, technology gets exponentially better and so do the fakes.
NFTs and Cryptocurrency
NFTs aren’t exchanged with your Chase Saphire credit card but instead cryptocurrency like ETH: Ethereum.
NFTs exist on the blockchain and are built by the Ethereum token standards ERC-721 — a blueprint created by Ethereum that allows developers to easily adapt NFTs to their own systems.
The use of ERC-721 is what allows NFTs to be non-fungible and is what creates that appeal of uniqueness compared to standards like the ERC-20 which creates fungible tokens.
NBA Top Shot
Now let’s use our knowledge of NFTs to understand something we all may be familiar with — Basketball
The NBA is one of the world’s most recognized professional sports leagues and players such as Michael Jordan, Kobe Bryant, and Lebron James all players that may exist in the back of your head.
Since 1948, in addition to the actual basketball games, NBA trading cards available in retail stores have also been allowing the NBA to rake in a good sum of money every year.
Introducing NBA Top Shot 🏀
NBA Top Shot merges the NFT world with Basketball cards that we all know and love.
Now, on this site — HERE
Basketball enthusiasts are able to buy packs on the website and open these packs to obtain digital moments of players in their collection.
These moments possess a certain rarity — common, rare, legendary
And your own serial number — Lebron James (Rare) #1/1000
Having a rarity and number aspect has also created a resell market where you can exchange your moments for crypto and vice-versa.
This marketplace is a full-on stock market as prices for moments wax and wanes depending on supply, demand, player, specific moment, etc.
Overall, when purchasing packs the likelihood of losing money is slim while the upside is potentially 10x or 20x.
And even though the highly publicized idea of people making big money with top shot may be true now, exactly like the stock market — prices can also fall.
Takeaway
I believe that NFTs are pretty cool and a good way to put your 9 dollars of Starbucks into something that can actually grow in value.
However, never be overleveraged and go all-in on packs and reselling just because prices are steadily growing by the day.
If you’re going to be investing in NFTs, get to know the market you’re participating in and do your due diligence before enacting action.
PRICES CAN ALSO FALL 📉
THANKS FOR READING⚡️
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— Tristian Xu
