Blockchain Foundry Inc. (CSE: BCFN)
Develops and commercializes blockchain-based business solutions and provides consulting services to corporate clients seeking to leverage blockchain technology in their businesses.
While some may regard NFT investments with a mixture of curiosity and a healthy dose of skepticism, that doesn’t seem to be slowing down their explosive popularity.
Non-fungible tokens are a way of guaranteeing the authenticity and assigning ownership of digital assets. Pretty much anything can be made into an NFT – sports memorabilia, original art, a Tweet, cute pictures of cats – you name it, and it’s probably been tokenized and sold. And people are snapping NFTs up at a record pace, with some spending thousands, or even millions, for the privilege.
So, what is driving the surge in NFT spending? According to a recent CBC Business report, it could be as simple as investor FOMO (fear of missing out), “NFTs are exploding in popularity right now, swept up in the mania for digital assets such as Bitcoin.”
Believe it or not, NFTs are a hot commodity right now. But that doesn’t mean NFTs are destined to be a passing trend. The blockchain technology behind these non-fungible tokens has been around for decades, reshaping conventional financial systems all over the world – and is here to stay. To a certain degree, NFTs perfectly represent how cutting-edge technology has created new and innovative ways for people to grow their wealth.
In the grand scheme of things, NFTs are just a small part of a much larger picture. It is understanding the technology behind things like NFTs and the underlying investment principles which make them valuable that’s important for investors.
Why are people willing to pay so much for something widely available for free on the internet? Mike Winkelmann – aka Beeple – broke records when the artist sold their NFT The First 5000 Days for an eye-watering $69 million. However, anyone can enjoy – or even download – the artwork at will, so what makes it so valuable?
It all comes down to the question of ownership. NFTs provide verifiable, indisputable ownership of one-of-a-kind digital assets. NFTs can even be used to prove ownership of physical assets, like real estate or cars. The point is that records created on the blockchain are immutable, and that’s what gives NFTs their value. People are willing to part with large sums of cash to own something no one else can own, even if those assets are easily viewable to others.
Using the argument that NFTs are a legitimate form of collectable art, which at least for the moment appears to be the case, then there is weight to the argument that the market for NFTs could closely resemble that of physical artwork.
In a detailed paper on art as an alternative financial investment, Rachel Pownall of Tilburg University notes that returns to fine art between 1980 and 2006 averaged 7% per year. There were years where these returns were significantly higher, like the 1980s and later in the 2000s, and periods where returns were weaker, but in general, the author found art to be a strong investment, particularly for portfolio diversification.
This could give reason to be cautiously optimistic about the future of NFTs. If they are indeed fine art, then maybe they will follow a similar trajectory.
This isn’t to say that the road to getting there will be straightforward; there are obstacles to surmount. In addition to redefining ownership for digital assets, a big part of what makes fine art valuable is its scarcity.
For every canvas you see in a gallery or museum, there are thousands of others that are virtually worthless. Art indices like those looked at in Pownall’s paper track auction house valuations. By only considering art already deemed valuable, and ignoring all the rest, returns in the study may have been overstated.
That’s not the only problem; as the popularity of NFTs increases, so does the supply. How this impacts the value of NFTs, in the long run, remains to be seen, but right now, predicting which pieces will sell for millions and which will go for pennies is anyone’s guess. If investing in NFTs is going to be like investing in fine art, it will rely heavily on picking a winning project.
Venturing deeper into the world of NFTs, Blockchain Foundry Inc. (CSE: BCFN) has partnered with Hawerchuk Family and Classic Auctions Inc. to mint their very own series of digital Dale Hawerchuk collectables. The newly created NFTs will honour the career of the late Hockey Hall of Famer.
The three unique Dale Hawerchuk NFTs are the first digital collectables ever to be auctioned on the Classic Auctions platform and will be open for bidding until October 26, 2021. Classic Auctions is the
“The Legacy of Dale Hawerchuk will continue for a lifetime. His contribution to sport and to humanity is insurmountable. Over his career and Hall of Fame years, Dale’s heroic achievements were highlighted by some of the most inspiring moments in hockey history. Now, some of these moments can exclusively be owned through a limited and exclusive series of Legendary NFTs,” said Eric Hawerchuk, son of the late hockey great.
“We are happy to present this innovative NFT collection of memorabilia with you, his fans, and hope you will enjoy and cherish his legacy as we do. These digital items have never before been seen or presented to the general public, we hope these items will bring you inspiration and appreciation for a true hockey hero that he was!” said
About Blockchain Foundry Inc.
Blockchain Foundry develops and commercializes blockchain-based business solutions and provides consulting services to corporate clients seeking to incorporate blockchain technology into their businesses.
Before releasing the exclusive Dale Hawerchuk NFTs, the company previously worked with House of Kibba on their GenZeroes augmented reality generative art NFTs and with Gifty on their NFT gifting platform.
Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.