NFTs Are So Much More Than Just a JPEG

https://thefintechtimes.com/nfts-are-so-much-more-than-just-a-jpeg/
https://thefintechtimes.com/wp-content/uploads/2022/02/golf-junkies.jpg?#

There has been a lot of speculation surrounding NFTs, with many being left unclear as to their actual value as large sums of money are spent on something you cannot physically own. To uncover the intricacies surrounding the digital assets and understandwhy such sums are spent, The Fintech Times’ Junior Journalist, Francis Bignell, sat down with Robert Cooke, Founder of the Golf Junkies NFT.

“NFTs are just jpegs being sold online for ludicrous amounts of crypto.” 

You’d probably be forgiven for believing this was the case upon your first viewing of the digital assets. It’s the mistake I made. But a recent conversation with Robert Cooke, founder of Golf Junkies, has completely changed my views. 

NFT Popularity Creates Communities

NFT popularity has surged for a variety of reasons, some initially making more sense than others. In regards to gametech, NFTs are popular due to the alternative revenue streams they can create for those in developing countries, and by bad actors, who expose the digital assets as ways of moving money anonymously. They also create a sense of absolute ownership within a certain world, as items are unique to the player, reflecting a part of their personality. This sense of vanity is commonplace in the gaming universe, but it can also be seen outside of it.

However, looking outside of the gaming universe, NFTs have garnered a lot of attention in the last couple of years, with many acquiring them following the boom of Cryptopunks and Bored Apes. These NFT communities have formed partnerships with known brands, like Adidas, which grants exclusive rights to any collaborations made. Not only does this create a potential revenue stream, but it enables fans of a brand to have a closer understanding with celebrities than ever before. This can be either through metaverse experiences to real life events. Taking the Adidas Bored Apes partnership as an example, Bored Ape owners will be granted exclusive access to early drops of products.

Established brands in the real world will look to partner with established NFT communities to tap into a new revenue stream with a big following. Fans of Jimmy Fallon for example, a Bored Ape owner, will be more enticed to purchase something endorsed by his community rather than something completely different. A sense of loyalty to a group is created – a sense of belonging, which is very appealing to humans.

This alongside the idea of exclusive ownership and rights to something are just a couple of reasons why NFTs have become so popular. Being a part of a community, which has similar interests, and does not accept simply anyone, creates a sense of pride in a member as they feel a part of an elite group. 

Cooke gave an example of this in our conversation: “I was reading about some community platforms where you have to do a really hard questionnaire to gain access to the community. The article spoke about a Game of Thrones community, with extremely intricate and difficult questions – it was almost like doing a dissertation – but this platform has very high retention rate due to its exclusivity.” 

Due to their only being a certain amount of members, and the group being so difficult to get into in the first place, the community feels very privileged and this is something brands want to tap into – essentially capitalising on consumer vanity.

Case Study: Golf Junkies

So having learnt about the application of NFTs in the real world, I learned more about Cooke’s project: Golf Junkies. The sport of golf is traditionally very archaic at a high level: there are certain clothing requirements and attitudes that don’t really reflect well on the sport. This elitist mentality makes it unappealing for new players, so how can it be made more inclusive?

There won’t be a drastic change overnight, but a simple shift from “nine old grumpy men having a meeting every three months about how they can increase memberships or change rules surrounding people wearing certain shoes or hoodies”, as Robert said, to a community-driven and governed sport, will encourage changes to the archaic rules and in turn, create a more appealing sport for beginners.

Pricing an NFT

Having understood the principle of both NFTs in general and Golf Junkies specifically, I enquired about the pricing as this is something that has puzzled many. When Bored Apes were released initially, they were priced at 0.08 ETH, but if you go on a site like OpenSea, they are now worth around 95 ETH (roughly £196k). In an attempt to understand why this was, I asked why Golf Junkies was being minted at 0.2 ETH.

“We have a variety of commitments we have promised our community: be it pop events, tech events (including crypto and NFT events), or whether they’re more golf orientated events which could involve hosting an exhibition day with a golfing legend – which would be exclusive to about 30 to 100 people. In addition to this, we want to have two permanent clubhouses – most likely London and Miami but we will let the community vote on these; then finally we want to build a DApp. You have to decentralise this to hold the NFT, which in turn will give you access to data to find playing partners when you’re travelling to different locations or cities.

“Our final aim is to eventually purchase our own golf course – taking all these things into account, and the price tag we have put on achieving them, 0.2ETH is how much it would cost each member.”

What this means? The NFT image you own, as its own entity, doesn’t mean anything – or at least very little (I can appreciate a cool looking NFT). It is the record of ownership on the blockchain which provides you access to data and the benefits associated with the NFT. If this same logic is applied to every NFT community, members must weigh up what they believe they can get out of a membership. If a member is there solely for the purpose of resale, they must look at the additional benefits because the shelf life of an NFT doesn’t lie in the unique appearance of the image, but the added benefits.  

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

https://thefintechtimes.com/nfts-are-so-much-more-than-just-a-jpeg/