This NFT investor spent $ 170,000 on a CryptoPunk to “flex” online
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$ 170,000 on a jpeg.
This is the amount that remarkable NFT collector Gmoney spent in January on an NFT CryptoPunk, or non-fungible token. Like most people in the crypto community, he is only known by his online alias and prefers to remain anonymous.
You might be thinking, “But why? Why did I buy a 24 x 24 pixel image? Why does this image have any value? Gmoney said.
NFTs are digital assets. They can be jpegs of pixelated characters like CryptoPunks, but they can also include anything online like art, collectibles, and even memes. Each NFT is represented by a code on an online public ledger called a blockchain, which tracks whenever an NFT is bought and sold.
First, NFT investors see long term value in assets and technology. As with any investment, they hope their NFTs appreciate over time.
But beyond that, owning NFTs offers a form of social currency. There is value in the social status and acceptance of the crypto community that comes with owning a respected NFT, just like a Rolex or Lamborghini in real life, Gmoney told CNBC Make It. It is a “flexible utility”.
“When someone buys a Rolex in the real world, they don’t spend thousands of dollars because of the utility value of the watch. A simple $ 5 watch could serve the same purpose. That’s for ‘flex.’ its status, ”Gmoney explains. “With an NFT, posting it as an avatar on Twitter and Discord, I can quickly ‘flex’ with a photo.”
“It has the same effect as wearing this Rolex in real life, but digitally,” he says.
The value of “flexible utility”
While browsing Twitter, you may come across thousands of accounts with CryptoPunk or other NFT avatars – from rock clipart jpegs to cartoon monkeys to cute penguins – all using their collections to “flex” online.
Of course, you can save and share a jpeg without spending thousands of dollars on NFT, but in the crypto world it doesn’t have the same effect. When an NFT investor deposits money on one, they can show off their new purchase on Twitter and find a community of other NFT owners, Gmoney explains.
Flexible NFTs started out within the niche crypto community, but are becoming more and more common. In the past 30 days alone, there has been approximately $ 2.4 billion in sales volume on OpenSea, the world’s largest NFT marketplace. This is a significant leap from last year, when OpenSea reported sales volume of less than $ 50 million in September 2020.
It means the community is growing. And at its core, this trend is about the strength and benefits of being a part of it.
“Wanting to be part of something and wanting to be part of a group is natural, especially when they have the same value alignments,” says Gmoney.
It’s all about the community
“Community is the most valuable aspect of NFTs,” says Cooper Turley, a widely known crypto and NFT investor. “Without community, NFTs have no value. My NFT investment thesis is based solely on the strength of an existing community, or the potential for a community to emerge.”
Owning an NFT, like a CryptoPunk, and posting it online can have benefits such as “recognition, respect, and status” within the crypto community, Turley explains.
That’s why there is value to buy rather than admire from afar, he says. “Owners enjoy access and benefits far beyond a traditional membership,” said Turley. “They are able to forge deeper relationships, find meaningful work and, above all, find a belonging.”
Gmoney says he’s seen businesses and partnerships form at community events or on NFT Discord channels. People can find mentorship, support, and guidance in the crypto space by being part of a community.
‘The evolution of the’ blue tick ‘
Obviously, not everyone can afford to spend thousands, if not hundreds, on NFT.
But the “flex” and the community have become so sought after that they have even led to a request to rent NFT.
Through reNFT, customers can rent NTFs for a few months to start their engagement with the crypto community. So far, everyone has been good, but Nick Vale, Marketing Manager at reNFT, says renting an NFT is kind of a good reputation.
Vale has seen at least one user’s social media engagement skyrocket after replacing his social media avatar with a “rented” CryptoPunk for three months. This allowed the user to make a name for themselves in space, Vale says.
And that might just be the start. “I think we’ll see that evolve further as NFT technology becomes part of social media as a whole,” said Vale. “This is the evolution of the ‘blue tick’ as we know it.”
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