How’s your cryptocurrency portfolio doing these days? Have you assembled any new non-fungible tokens (NFT’s) of note? What’s that? You’re still holding stocks, and bonds, and mutual funds, and ETF’s? Oh, that’s adorable.
Clearly, it’s time for a lesson on the new investment landscape, and Rule of Three (Alternative Investment Division) is the right guy at the right time to deliver that lesson (Our motto: “We’re here to educate you about these critical issues, and if it turns out we don’t know much about these particular issues, we’re fully prepared to make things up as we go along, and provide advice to you anyway.”) I know, I know, our motto is frighteningly similar to what must be the stated mission of any governmental agency located in the contiguous United States (my experience with governmental agencies located in Alaska, Hawaii, or other U.S. territories is very limited, and I wouldn’t want to unfairly disparage those organizations without actually having negative experiences inflicted upon me by them, although, I welcome the opportunity to do just that in the very near future).
Remember jingling the coins in your piggybank as a youngster? Yeah, me neither; I don’t think there were ever more than three coins in my piggybank, and two of them were likely “seed money” plunked in there at the time the piggybank was gifted to me by my grandmother. But, bear with me for a moment - I’m trying to draw a comparison between those coins piling up in the piggybank (again, in some other child’s bedroom, not mine) with the coins featured in the photo atop this column. Alas, there are no such coins representing Bitcoin, Dogecoin, or Ethereum, or any of the other, countless cryptocurrencies floating around out there; they are simply digital currencies, and there is no physical representation of them anywhere. And, in fact, referring to them as currencies is a bit misleading - they are more akin to stocks, and mutual funds, and ETF’s, which is to say, they are but another form of legalized gambling.
An important distinction to keep in mind regarding cryptocurrency and NFT’s is that cryptocurrency is inherently fungible, and NFT’s are distinctly non-fungible. So, if fungibility (or, the lack thereof) is a critical factor in your decision-making when it comes to investing, these two types of investments provide you with a clear line of demarcation. On the other hand, if, like me, you’re not even sure what fungibility means, and your investment strategy tends more toward the “buying something that I hope will ultimately increase in value, but I recognize that it may not” approach, then fungibility is moot (I know, that would be a great name for a band).
According to businessinsider.in, “The iconic Doge meme non-fungible token (NFT), which was sold for a massive $4 million back in June, made history by becoming the most expensive meme NFT ever sold.” Now, I grant you that I recognize several words in that sentence, and acknowledge that they appear to be words contained in the English language, but I have no earthly idea what any of that gibberish means. As near as I can tell, this picture of a dog (call it art, if you must) was carved into 17 billion digital pieces, and auctioned off to bidders - hopefully, you were able to secure a piece of this asset, because that is truly a cute dog. Also, Elon Musk became involved in this transaction somehow - of course he did.
What? That’s not enough incomprehensible double-talk for you? Well then, try this one on for size, from mynft.com: “NFTs are pieces of information on a blockchain that’s represented in an interactive format with visual representation,” Alrighty, then, that certainly clarifies things for us.
For the definitive final word on NFT’s, however, I visited opensea.io, apparently an exchange for these assets, and which features a list of the top 100 most popular NFT’s. This list is led by something called, “Cryptopunks,” which appears to be a lineup of Lego-like characters, for which nearly one million transactions have been executed. The list includes a curiously high number of “Ape-themed” assets, such as: “Bored Ape Yacht Club,” “Mutant Ape Yacht Club,” “Bored Ape Kennel Club,” “Bored Ape Chemistry Club,” “CyberKongz VX,” “CyberKongz (Babies),” “Prime Ape Planet PAP,” and “CyberKongz.”
I’m a big fan of Planet of the Apes, inasmuch as it was one of the first movies I recall seeing in a movie theater as a kid, but I must confess that I never could have anticipated the leap to investment vehicle.
Now that we’re all up to speed on NFT’s, I think it’s time we jump into the deep end of the pool, and get our piece of the pie (Ed. note: There are several disturbing elements contained within this analogy: the more prudent approach to entering a pool is to access it via the stairs at the shallow end, and gradually move toward the deep end, once the swimmer is acclimated to the temperature and depth of the pool; pie is never to be consumed while in a swimming pool - no, not even a slice of delicious cherry pie; and, as all of our mothers always reminded us, you must wait at least an hour after eating, before entering a pool, lest you sink to the bottom). I believe there is a sterling opportunity available to us, by crafting an innovative NFT product, which will no doubt fly off the shelves - the working title for this new NFT is, “Poker-Playing Dogs Meme,” and if that silly picture of a cute dog can be carved into 17 billion pieces, this one can likely yield at least twice that number - it’s bound to be worth millions, I tell you. What do you say, Elon? Are you in? Take a look. . .
These NFT’s appear to draw much from the world of electronic gaming, which is another arena I find quite baffling. My strategy with MarioCart, and DonkeyKong, and Sonic the Hedgehog, when I played with my children, was to push all the buttons all the time - certainly not a winning strategy, as I’m sure they would attest. And, to extend the analogy, perhaps not the right strategy when it comes to dabbling in NFT’s either. I bet Elon doesn’t push all the buttons all the time.