Why are NFTs going to overshadow crypto in the next decade?
Simple answer: the overwhelming majority of assets in the world are nonfungible.
Human beings are creatures of attachment. We are not good at letting go. Despite inconstancy being the only constant in this world, we struggle and fight against change.
There are two major factors that determine how attached we become to something. The first: how long it has been in our lives. The second: how prominent a role it has played in our lives.
Over time, we build attachments. Memories are made. Physical items and spaces give those memories contextual anchors, and grant us a type of gateway to the past.
The longer something stays in our lives, the more memories we make that involve it.
As our attachment grows, the possession begins to take on an irreplaceable quality. It becomes nonfungible to us, even if there may be many items similar to it in the world.
When I turned 18, my father gave me his antique Omega watch. My father received it from his father when he turned 18, and his father received it from my great grandfather on his 18th birthday as well.
While it’s true that this is a valuable, somewhat rare antique, watches of the same make and model still exist in the world. From that perspective, it isn’t truly irreplaceable. Theoretically, it could be exchanged with a watch of matching value.
But to me, and to my father, this watch is absolutely irreplaceable. It is nonfungible in the purest definition. The value of the watch isn’t just in the brand or the gold. The value is also derived from the meaning we have attached to it through generations of our family.
The possessions that people care the most about are nonfungible. In fact, they are nonfungible particularly because people have come to care about them so much.
The vast majority of our possessions are nonfungible in this sense.
How many of the items in your home would you be willing to swap for a more or less visually identical item?
How about your home itself? Would you be willing to exchange that for an identical home of equivalent value?
Of course not. Because it’s your home. It’s the place you cried and loved. It’s the place you spent Christmas morning. It’s the place you raised your children.
aThe more attached we become to something we own, the more nonfungible it becomes.
Non-fungible tokens (NFTs) are a revolutionary new zero-to-one technology that allows ownership of nonfungible items to be recorded, tracked, and secured like never before. Whether the item is intangible, physical, or digital, it can now be secured in a more holistic sense through NFT technology.
Attaching NFTs to these assets is not simple or straightforward yet—right now you need to be a talented blockchain engineer who can personally develop a smart contract. But that is changing. Countless brilliant minds and billions of dollars are building tools that aim to make this process as easy as possible. Companies like RareCircles, Hang, Medallion, Niftify, Moonwalk, Polarys, and Cupcake are building products that will help this technology reach its full potential.
While the early days of blockchain were dominated by crypto, the future will be driven by NFTs. The ceiling for crypto is limited—in fact, it’s possible that we’ve hit it already.
On the other hand, NFTs have the ability to transform almost every aspect of human coordination and economic activity.
They make it possible for us to have property rights in the digital world for the very first time. This is a huge breakthrough. It’s hard to understate the implications.
We are standing at the beginning of a new economic era, guaranteed by the fundamental human condition.