Are you familiar with NFT’s?
Short for “non-fungible tokens”, they are digital assets with unique properties that make them different from other assets. Today on Goddess of Crypto, get ready to learn and hear about NFTs from a brand-new perspective – in plain English! Join Halle Eavelyn as she demystifies NFTs and shares her insight on how they will make an enormous change in almost every single industry in the foreseeable future..
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NFTs Now And As The Future
In this episode, we’re going to talk about NFTs, hopefully from a perspective that you have not even heard before, and that is some plain English. I want you to learn and read about NFTs in a way that may be all the hype that you might have heard has not been properly explained to you. We’re going to back all the way up and pretend you’ve never heard of an NFT, which may be true for you, or perhaps you are already familiar.
An NFT literally means a Non-Fungible Token. What is fungible exactly? It has nothing to do with mushrooms. I say this only because I was sure it did the first time I heard about it. It turns out no. If it’s fungible, it means it is tradable for something identical inside of its asset class. You can have a type of token like a dollar, and it could be traded for another dollar or traded for a Euro. That is what makes it fungible.
When you trade it in to a different asset class that is not tradable, that is what makes it non-fungible. It is a unique item. It’s why digital assets such as art already lend themselves so beautifully to being NFTs, which are digital representations of a physical asset. Let’s say that feels still hard to understand or not clear to you. We’ll put it in very straightforward terms. This could be anything in the world, but the most popular NFTs so far have been these really intensely ugly apes called Bored Apes that belong to something called the Bored Ape Yacht Club.
I looked this up and the minimum price to buy one of these things is still hundreds of thousands of dollars. They have gone for millions of dollars and are digital representations of art. They are themselves created digitally, so there was no physical asset in the first place. When they’re created, it’s called being minted. Minted equals created. It’s basically being created on a computer. Somebody has that digital asset, which is then only a smart contract. Truly, that is what an NFT is. It is a smart contract.
When I say smart, I mean smart in the sense of like, “Alexa is smart.” Your house has a smart aspect to it sometimes. When I say smart, it has stuff added to it or additional viability because it’s not just a physical contract. The Apes themselves are digital, yet, I walked into a high-end art gallery and saw a physical Ape, a painting of one of the Bored Apes on a wall. I asked about it. The painting was going for $5,000. What was it? It was a physical representation of a digital asset that was created digitally.
Somebody took the image because each Ape is unique and different. They all do not look the same. They have different bucked teeth, sunglasses, or fur accessories. This particular person had licensed their Ape to have physical art created from it. It could be life imitating art or something like that. That was fascinating for me to see because it only ever existed as digital artwork first. If you bought it with that $5,000, you weren’t getting the smart contract that came with it.
NFTs: NFTs have given artists a direct platform. NFTs in the art space is amazing.
You weren’t getting the digital Ape. You were only getting the physical painting, which has only the value you apply to it. The Apes themselves are going for $500,000 or something. That’s not what you’re getting. You’re just getting the piece of art. That’s the kind of stuff that makes people look at NFTs and say, “That’s stupid.” It’s not everybody, but there’s a huge market for it.
I was at a crypto poker party, where somebody mentioned that they had a friend who had started buying these Apes when they were $200 apiece. They then started getting sent by the company that owns Bored Ape Yacht Club all these freebies. They had been able to sell the Apes for a lot of money, in the hundreds of thousands or even millions of dollars.
That person’s friend is set for life. That’s amazing when that happens. However, it’s not usually the experience for everyone. My experience with NFTs is they’re easy enough to understand. The concept of minting something and creating it. I’ve watched someone mint a token, mint the NFT inside of a few minutes. There are exchanges such as OpenSea. It is the biggest one, but there are several other exchanges that act as clearinghouses for digital art.
That’s very valuable for the artists themselves. In fact, maybe none since the Renaissance have artists had the ability to make so much money off of their art and to be able to bypass the dealers. I was talking to a friend of mine who is a pretty decently famous artist. She was telling me stories of having been ripped off by her dealer. The dealer both stole works and stole money. That’s the kind of thing where it’s shameful that it happens, but artists are being ripped off all the time.
Look at record artists and musicians for years who have been making a dollar an album off of their multimillion-dollar record deal or a dollar an album for something that went platinum. Guess who’s making all of the money? It’s the people who are distributing it and not the creators of the music in the first place. The business of it is where the money is made, not the art. NFTs have started changing significantly because they’ve given artists a direct platform. NFTs themselves, in this regard in the art space, are amazing.
However, the market for NFTs, the bubble that has been created from it, and the self-referential experience of being in the NFT world, I agree with a lot of people that I talked to. It is not going to last, and there are some fairly stupid aspects to it. That’s just my opinion. If you’re an NFT junkie, then enjoy. For a lot of people, they’re saying, “These are JPEGs.” What’s a JPEG? It is a digital representation of art. When you have a photo, if you look closely enough at all those pixels, it’s only just pixels. The format itself is called a JPEG. That’s one of the main digital asset formats. There’s a big joke like, “We’ve spent millions of dollars, but all you have to show for it is these JPEGs.”
[bctt tweet=”Truly, an NFT is a smart contract.” via=”no”]
NFTS is so much more than that, and I want you to know that because my belief is that NFTs are going to make an enormous change in almost every single industry over the next couple of decades. Here’s what I see already happening. Real estate is being changed forever by NFTs. If you’re not familiar with the first transactions that have already taken place, I’m going to give you a brief overview because it’s fascinating. I have a real estate background, so I find this exciting to see what’s going on.
There’s a company called Propy, and they have started creating NFT contracts for properties. You can buy into the company through the tokens. They have their own token. You have to give full disclosure. Nobody has any rules in the industry yet, but I feel that it would be inappropriate not to. I am an investor in Propy by buying their tokens, not through investing directly in the company.
If you’re interested in what a company is doing, whether it’s Propy or anybody else, you can often look and see, “They have a token. I can buy that on one of the exchanges.” I’ve made a small investment in Propy coins because I believe in what they’re doing, and that money goes directly to them. It helps to support the company as well as the idea is over time, the price rises and rises, and then I make money off of that. I’ll hold it for a long time because that’s how I like to do my investing.
Propy has done several different transactions. The first one was in Kyiv City in Ukraine. I don’t even know if the condo in that transaction still exists. If it were a physical building in a war, the way that this NFT was in a war, the building could be destroyed, but the building itself is not the contract. The building itself is part of, or at least that condo in the building becomes part of a contract that is digital that lives on the blockchain and that lives forever. It is timestamped on the blockchain that the transaction took place at a particular time.
The NFT itself consisted of an LLC. A company got set up, and then the condo got put into the LLC. That package was then sold as an NFT. It’s a little bit mind-boggling, but if you think of it as smart contracts and imagine there was a building here, put the condo into the LLC, and you then sold the LLC, that would be what was traded. They did it on the blockchain, and that’s why they did it as an NFT.
They then repeated that in Tampa, Florida. Right up the road from me, they repeated that with two different properties. The next was a house, and the next one was a condo. In each case in the United States, those are the first two real estate transactions that have been done as NFTs in the US. As they did it, they offered it for auction, and you could use Bitcoin and Ether, which is the Ethereum coin. I think maybe Litecoin or something, but you could bid in that currency or place a regular bid in the physical world without the NFT. In each case, they were able to find a buyer and do the transaction using the NFT and Ether.
NFTs: There’s so much power in that one little shift, but then you also have the value of a lot of the paperwork and processes being reduced or eliminated in real estate practices.
It was an interesting transaction because it’s groundbreaking, but it simplified things significantly. That’s the beauty to me of the NFT contract. It simplifies things beautifully. Going back to our condo in Ukraine, we don’t know if the condo itself is still standing, but we know that if there had been a Ukrainian mortgage company handling the transaction and then the local Ukrainian office was holding the paperwork, and let’s say because of all the bombing in Kyiv City, all of that has been destroyed. Often, property rights could be in question.
I don’t know if you’ve seen the movie Woman in Gold with Helen Mirren. It is about a very famous Klimt painting called Woman in Gold, which the Nazis stole during World War II. It was the painting of a woman who was a Jew who was killed in a concentration camp. Her family came back later and said, “This was our painting. That is my aunt. It was stolen from my home. We want it back.” By this time, it had been given to a museum, and the museum was holding it. The painting itself belonged to the government, and it took years and a court battle for them to finally be given back the family painting, the family heirloom, which was worth so much money that there were a lot of people who didn’t want to give it back.
That story had a happy ending for the family, but a lot of these stories don’t. There are a lot of property rights issues as well because of things like war. I know that the condo’s ownership is not in contest ever and not just because there were newspaper stories about it when it happened. I know that because the information held in that contract exists on a blockchain, and the blockchain is decentralized. It does not exist in one location. It exists basically in the cloud in multiple locations. That’s the value of decentralization.
There’s so much power in that one little shift, but then you also have the value of a lot of the paperwork and processes being reduced or eliminated in real estate practices. I used to think that NFTs meant that title companies would go away and that the whole industry would be eradicated. I don’t think that’s true now, at least not for multiple generations, because you have older houses. They have a chain of titles that already exists. That chain of title can be disrupted. There can be defects that were not disclosed. Even for new properties with builder defects, you would want title insurance for all of that.
What’s beautiful is that once the NFT is created, it basically can be kept to house information. Over time, we’re going to see this happen in a lot of different areas. I believe that your medical records are going to become NFTs. More importantly, I believe there are NFTs that you will hold sovereignty over. You know what it’s like right now.
You go to the doctor’s office and say, “I need my medical records.” They say, “Please fax.” You all remember what faxes are, don’t you? We only run into them in places like, “The doctor’s office needs you to fax a request in.” Half of them still don’t take email. That and city places where you do your filing in the city, those places still take faxes, all the city offices. Everywhere else, everyone’s moved to digital and email.
[bctt tweet=”The beauty of an NFT contract is it simplifies things beautifully.” via=”no”]
You go into the doctor’s office and say, “I need my X-rays because I’m going to go get a consult.” They say, “We can’t send them to you. We’ll have to send them to the doctor directly.” Why? They belong to you or, “Yes, you can have that,” but you can only have that. They don’t want to give you your medical records. Let’s say you’re a healthy person. You’ve had twenty doctors over your life. You’re a sick person, and had 100 doctors over your life. You try tracing your medical history and remembering the doctor you saw back when you lived in Texas many years ago. It’s really hard.
NFTs are going to change all that because your medical information will be kept in one repository that you will have control over. Let’s look at a place like Citibank, for example. Citibank is a trusted bank and credit card company. I’ve got a Citibank credit card. You might have a Citibank credit card. When their database was hacked, all of that information is gone at that point to a hacker who can now use it to try to get your passwords, steal your identity, or whatever. Why did they allow that to happen? It’s because, “There was a security breach. We got hacked into.”
An NFT could be encoded further to offer protection that will allow information to be completely hidden from all of those companies unless you give permission personally for the information to be decoded. There’s a more technical version of that, but that’s the gist of it. The point of it is that you would have control. What the credit card company would do is it would only be able to share the last four digits of your file that everything else wouldn’t appear with that information.
The reason that this is so important is it’s going to offer you protection, security, and control that you don’t have right now. I see this changing and happening in pretty much every single market. There’s going to be quite the difference over the next several years, and we’re already seeing it happening in real estate. If you’re interested in this, you can look up crypto and real estate or set a Google Alert for when new transactions come in so that you can start seeing this as it’s unfolding.
I saw that a real estate company in Long Island was saying that you could use Bitcoin or Stablecoin to purchase a mansion that was being built. We’re going to see more of that. The people who have already become millionaires and billionaires in crypto are not looking to sell their crypto in order to transact. They’re looking to borrow against it. We’re already seeing mortgage companies that will allow you to borrow against your crypto to buy your real estate. Using the NFT, you’re able to transact that the contracts go right into your wallet and live there forever on the blockchain, where it’s going to be safe as houses, as they say.
I can’t wait to see how the NFT market unfolds. If this has been useful for you, please like, share, and comment. I would love to read your other questions. Future episodes are going to deal with all kinds of things because it’s a brave new world every day. In the meantime, please share this and the other episodes with your mothers, wives, girlfriends, grandmas, daughters, and besties. I want all the women in the world to know about the new energy of money. Thank you, again, for joining us on the show.