Friday, February 25, 2022

Has Crypto Had its Big Moment?

Author: Andrew Potter 

You saw it right? The color changing QR code bouncing around your TV screen for a 60 second “big game” ad (I don’t want to get sued any more than my fellow author). This “clever” ad was from the cryptocurrency exchange company Coinbase. The commercial reportedly cost Coinbase nearly $14 million in addition to the millions in free giveaways the company was offering to new app users. Despite the steep cost, it seemed to be worth it as the company’s website crashed due to the large volume of visitors. Talk about buzz! This ad was one of four ads dedicated to cryptocurrency during the Superbowl.

Has cryptocurrency and the blockchain had its watershed moment? Its hard to say for certain but it certainly seems like there is significant momentum.

I recently read a book called Money: The True Story of a Made-up Thing by Jacob Goldstein (I highly recommend this book!). In the book, Goldstein discusses the evolution of money, from the time coins were invented in Mesopotamia through the present age of digital currency. One thing stuck out to me: consumer confidence is key. Changes to currency and lending practices that stuck and became mainstream were the ones that people believed in.

Several days after the game, something else caught my eye: a link to article about the first home in the US to be bought by NFT. If you recall from a previous EntreView post, Minting Golden Tickets: What Ancient Wisdom Tells about Selling NFTs, “NFTs” are Non-Fungible Tokens, which are generally used to sell digital assets like art, whose ownership can be transferred and verified through the blockchain. The aforementioned house was purchased for 201 Ether, a digital currency, the equivalent of $653,000. How it worked: the seller transferred rights in the property to an LLC which was then minted into an NFT, the buyer then purchased the NFT along with the rights to the property. Experts say that such a transaction is far from becoming common practice, but it does highlight the applicability and resourcefulness of the blockchain. Two major applications: (1) by making the property-owning LLC into a token, the NFT is now recorded on the blockchain which will allow for easier and more reliable proof of ownership and potentially shorter transaction timelines by reducing the time for title searches; and (2) payment by digital currency can be easier and safer by avoiding the risks associated with wire transfers. More properties are set to be sold by similar means later this year so we’ll see if this becomes a trend.

Ready to buy your next house as an NFT? Probably not. But, perhaps this may become a reality in our lifetime. Judging by the amount of capital being devoted to crypto-related ventures and the amount of current buzz it is creating, it seems like sufficient consumer confidence could be achievable in the near future. Impossible to say for certain, but it might be time to take a more serious look. As for me personally, I have decided to dip my toe in the water and purchase an NFT. Stay tuned for my next post to see what I have learned in the process.

No comments :

Post a Comment