November 23, 2021
Yesterday, our Executive Editor Kim Iskyan took us headfirst into the new and lucrative world of NFTs – “non-fungible tokens,” or crypto collectibles. (You can read Part One of his story here.)
NFTs allow you to buy, say, a very small part of a multimillion-dollar Picasso original. And this fractionalized ownership is similar in some ways to buying shares in a public company.
What’s different, though, is that the technology underpinning the expensive painting (or fancy sports car) fractionalized ownership notion is applicable to a vast range of use cases…
This ability to “tokenize” real-world assets – easily and securely – will change how we talk about assets, how we invest, how we diversify, and how we interact with money.
Now, we’re not there yet… because it can take a while for any technology to find its ultimate, highest-use function.
Don’t forget that the Internet began as a way for government researchers to share information. Touted as the “information superhighway,” over time it has become an integral part of how we communicate, do business, learn, and consume content.
Will NFTs become as integrated in our everyday life as the Internet?
Here’s Kim with the conclusion to his story…
How NFTs Are Going to Evolve and Change the World
Where We Are Now on the ‘Internet Timeline’
But like the wreckage of the dot-com boom… the NFT universe is going to result in many disappointed speculators holding unique, and worthless, images. Is an original JPEG of a “rare” cartoonish pixelated ape (an image which is replicable in a few seconds using a phone or computer) really worth upwards of $200,000? (That’s the floor price of a “Bored Ape Yacht Club” NFT… the top collection on OpenSea over the past week.)
To better understand the future of cryptos, let’s go back to the Internet in 1994. That’s when the web was just in its infancy… At the time, a few people believed it would revolutionize how we communicate, learn, work, and live. Others thought it was a silly distraction. Most people didn’t notice it at all.
Five years later, though, that had changed. Almost any asset that was remotely connected to the Internet was bid up to the stratosphere, in the dot-com bubble of 1999 and 2000.
The bust that followed destroyed trillions of dollars of value. Speculators buying flashy ideas that didn’t survive the rigors of real-life business were wiped out.
But the underlying technology of the Internet, of course, was more robust than ever… and just getting started. And, two decades later, the Internet is an essential fabric that weaves together society and civilization. Nearly 5 billion people use it, and the Internet has found its way into nearly every realm of life. It has made the world a more efficient, smarter, and more connected place.
It wasn’t quick or easy, but anyone who pooh-poohed the Internet in 1994 was proven dead wrong. And today, cryptos are far bigger than the Internet was in 1994.
Encouragingly – in a way – cryptos have seen their own versions of the frothy speculative era of the Internet, when a company could attach “.com” to its name and see its share price triple overnight…
Similar to how huckster public companies have added the word “bitcoin” or “blockchain” – without changing their business – and seen their share price rocket. And the crypto world suffered through “initial coin offerings” in 2017… of which more than 90% failed.
And there’s a good chance that the evolution of the blockchain, and cryptos, will be roughly similar to how the Internet has developed over the past two decades. The applications of blockchain are re-scripting entire sectors and upending our assumptions about technology and its application to everything from medical care, logistics, privacy to the arts, and property ownership itself… And that process is only going to accelerate.
What It Can Do
NFT technology allows the tokenization of anything from “cryptokitties” to a professional basketball player’s contract (like then-Brooklyn-Nets star Spencer Dinwiddie did in January 2020 with his three-year, $34.4 million contract) to any asset – a suburban Maryland house, my CRV, Miami beachfront property, your wife’s diamond necklace – to be sold, saved, or traded.
If I was so inclined, I could make a Kim Iskyan NFT that would be irrevocable proof of who I am. Then I could create a limited number of variations of the Kim Iskyan NFT, which would be akin to making, say, digital baseball cards. And I could post these for sale or auction them on OpenSea, one of the most popular NFT marketplaces… and you could buy one.
Anything worth anything could, in theory, have a secure market, allowing the buyer to use it to raise cash, borrow from, create a cashflow through… in other words, completely revolutionize investing and finance.
On another front, NFT technology can be applied royalty rights. Musicians can sell song rights using NFTs – similar to the way that a record label can sell the rights to certain albums or songs. In that way, a listener could pay the musician – or the owner of the composition – for listening to a song. And the same mechanism could be used for, say, books… TV… movies… or any other intellectual property or content that others consume.
NFTs can be used for digital identity, to store identification and ownership data on the blockchain. This would improve data integrity, while allowing for trustless transactions ‒ that is, participants involved don’t need to know or trust each other.
As crypto expert Eric Wade explained to me…
You’d upload a copy of your driver’s license once and be done with it. Getting a mortgage, going through airport security, applying to college, accessing secure areas – would not only be simple and straightforward, but you’d share only what the other party needed. That’s the improvement this technology promises.
How Can You Invest in the Future of NFTs?
The crypto world has suffered several brutal bear markets. The volatility of cryptocurrencies makes even the most roller-coaster-like meme stocks – like GameStop (GME) or AMC Entertainment (AMC) – feel like the kiddie merry-go-round by comparison.
Investing in the early Internet was filled with a lot of dead ends and terrible companies. For every Amazon (AMZN) that made millions out of small investments, there were dozens of Webvans and theGlobe.coms that were portfolio wreckers. And today, there are around 5,000 tradable crypto assets on the market… But Eric reckons there are only a few dozen that are worth anything.
It’s worth remembering that some of the biggest beneficiaries of the Internet boom weren’t the Internet companies themselves… but rather those that delivered the “picks and shovels” that enabled the entire ecosystem. An example would be the chipmakers and switch producers providing the vital “plumbing” of the infrastructure.
Picks and shovels is a term from the gold rush days. The people who really made money weren’t the speculators digging and panning the rivers, but rather those who provided the essentials – picks, shovels, and boots. Every miner needed these, regardless of whether they found gold or not.
To profit from the future of NFT technology, the path of least resistance is focusing on the picks-and-shovels providers… the critical ingredients that make it all run. The service providers of NFT technology are the ones that will deliver the greatest gains in the NFT revolution.
In his special presentation last week, Eric shared a big prediction about this… one which involves a set of tiny cryptos that are poised to be the key beneficiaries of this process. (He also gave away one incredible idea… You can click here to find out what it was.)
Twelve of Eric’s recommendations in Crypto Capital have increased by at least 1,000%. Some positions in the Crypto Capital portfolio have done even better… For example, Harmony (ONE) is up 3,690% since December 2019, and Polymath (POLY) has jumped 1,508% since May 2020.
The performance of the Crypto Capital portfolio has been so otherworldly that Stansberry Research has given the publication its own top five list of open recommendations at the end of every weekday issue of the Stansberry Digest.
And now, as he announced last week, Eric has built a new model portfolio with six coins – each with the potential, he says, to jump at least 1,000%. Click here to find out how you can get in on this new opportunity.
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Executive Editor, American Consequences
With Editorial Staff
November 23, 2021