🥛 Are NFTs just altcoins with pictures? Our inside take 👀

  • August 15, 2022
  • 5 Min Read

GM. This is the Milk Road. We’re the Rosetta Stone of crypto. We teach you the lingo so you can speak crypto like a natural.

Wowza! What a weekend full of green...

  • BTC hit $25k for the first time since early June
  • ETH hit $2k for the first time since late May
  • The Fear & Greed Index got out of "Fear" mode for the first time since April

There was as much green as my jeans after recess. Sorry, mom!

Here's what we got for ya today:

  • Bite-sized treats
  • The 3 great debates
  • Meme of the day

BITE-SIZED TREATS

Tornado Cash Post Ban Update: Tornado deleted their discord. The DAO has been shut down. And the lead dev has been arrested. Yet somehow, the founders of Celsius, Terra, and Voyager are still rich & walking around freely. The lesson: you can lie/cheat/steal… you just can’t give people tools that give them privacy!

MTV is launching a VMAs metaverse on Roblox. Um. OK. I don’t know what this means except “MTV wants kids to watch the VMAs” (but they probably won’t)

Real Madrid and Barcelona team up for web3 trademarks. It includes VR games, Virtual clothes, footwear, & headgear, and crypto transaction management software.

Pudgy Penguins announce IRL toys licensed directly by NFT holders. The Penguins' volume soared 350% on the news. Who said penguins can’t fly?

Taco Bell has filed for a new metaverse trademark. No, it’s not for a virtual Crunchwrap Supreme. Even crazier….Taco Bell wants to be a metaverse venue for wedding ceremonies.

THE 3 GREAT DEBATES

The weekend was full of green. But there’s one thing still down: NFTs. 

Collection prices are down. Volume is down. The only thing up is the tension in the air. So of course, some big debates broke out on Twitter.

I’ll save you the drama and summarize the good stuff.

There were 3 big debates happening:

  • Are NFTs just “shitcoins with pictures”?
  • Are Music NFTs actually a “thing” or hand waving BS
  • Royalties vs No royalties

It was like a CNN Presidential Debate (except with more insults and memes). Big names like Beeple, Cobie, DeezeFi, and Punk6529 all jumped in.

Ladies & gents, let the debates begin!

Debate #1: Are NFTs just Altcoins with photos?

Who said it? Cobie, the popular, smart, funny crypto guy who isn’t trying to be an “influencer,” but has a lot of influence.

His take: NFTs are just “altcoins with pictures". It's all hype and no utility.

Counterargument: NFTs are the future and have plenty of use cases - digital collectibles, royalties for creators, authenticates ownership for assets, etc. Putting them in the same sentence as altcoins is an insult. 

The Milk Road’s Take: I get what Cobie is saying. Today, a lot of NFTs trade like random casino tokens. People just buy an NFT and pray it goes up. 

They aren’t in it for the art or utility. They are in it for NGU (‘number goes up’). In fact, 99% of the time someone says they bought an NFT because they “love the community” just remember that their “community” is a group of people all praying their picture of llamas becomes the next Bored Apes. 

BUT - I side with the counterargument.

Today - NFTs are digital collectibles. If you think NFTs are dumb, you probably wouldn’t buy a Rolex for $80,000 when the metals it’s made of are only ~$500. You wouldn’t pay millions of dollars for a picture of LeBron James on a piece of cardboard … but people do.

People collect cards, watches, art, and much much more. Collectibles are a $300B+ market.

And in the future - NFTs may do much more. Maybe it’s used for membership passes (eg. Gary V is using his NFT to give you access to 3 years of his conference). Or for gamers to buy/sell items in games, etc.

So yes - most NFTs are worthless today and will be super-duper-worthless in the future. But that’s how anything on the internet works. Most Youtube videos are trash and get 0 views. The majority of Twitch streamers never get 5 viewers. Most tweets are stupid.

So what? It’s the best stuff that matters, not the average of the junk.

Debate #2: Are Music NFTs actually a “thing” or hand-waving BS?

Who said it? Cobie, again. The Twitter fingers were active this weekend for the dude with the lion's mane.

His take: Music NFTs are dumb and don’t make sense.

Artists don’t need web3 to monetize. Master/publishing markets already exist and artists could just sell equity in the band.

Counterargument: NFTs are a game changer for artists and fans.

  • Artists - can make a living off 1,000 true fans rather than waiting for millions to stream on other platforms. All while retaining 100% of their music rights
  • Fans - get access to perks & benefits. Plus get to show off their fandom with a digital collectible.

The Milk Road's Take: Here’s the worst kind of argument about any new technology: “you don’t need [new thing], you can already do that with [old way]”

You don’t need e-mail, we have mail!

You don’t need Instagram, we have photo albums!

You don’t need Google Maps, we have paper maps!

You don’t need TikTok, we have cocaine!

You get the idea. Technology sometimes makes the “impossible, possible.” But usually, it makes the “slow/crappy/expensive” thing less slow/crappy/expensive.

So back to Music NFTs. Today, we have two kinds of crappy things:

1/ Record labels - give artists money in exchange for HUGE cuts of their future earnings & creative freedom

2/ Crowdfunding - lets fans donate/give to their favorite artists for little, to nothing, in return

NFTs bring a simpler solution to the table.

  • Buy an artist's NFT
  • This shows the artist (and the world) you’re one of their loyal supporters
  • They reward you with perks and/or literal royalties on the music they create

Artists get money. Fans get status & access (and sometimes, some money back). Win-Win.

Debate #3: Royalties vs no royalties? 

Who said it? Well... this is actually more of who did it. Sudoswap is an NFT platform that does not pay out any royalties to creators. 

Fun fact: Royalties are not enforceable by code. This means creators can set royalties, but the marketplace decides whether to honor it or not. It's an unwritten rule to always pay out those royalties to creators. Kinda like tipping your waiter at a restaurant. 

But Sudoswap has decided not to. And the marketplace has been getting volume recently.

No royalties take: Most creators make millions on the mints (primary sales) and it just takes away more money from sales. Fewer fees = more profits for traders.

Counterargument: Creators deserve a piece of every sale. It’s one of the biggest use cases for NFTs. It helps pay creators, fund future roadmap plans, etc. 

The Milk Road's Take: NFT royalties are a great use case. But the decision isn’t black & white. It depends on 2 things:

  • What’s being built? A lot of funds are needed if you’re building something like a video game, not so much if it’s just an art project
  • Who’s doing the building? Smaller teams don't have much capital or resources so they might need additional royalties. Big companies like Nike and Microsoft don't.

But the reality is that it doesn't really matter. It all comes down to the NFT holders and whether they decide to use a product like Sudoswap or not. 

Beeple said it best.

The Final Milk Road Take: We know this won’t end any crypto battles but we just wanted to give our 2 cents. It’s all love here at the Milk Road.

If it was up to me, the only thing we’d be debating is who the greatest basketball player of all time is. It’s Lebron. Fight me.

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MEME OF THE DAY

That's a wrap for today. Stay thirsty and see ya tomorrow!

If you want more, be sure to follow our Twitter (@MilkRoadDaily)

VITALIK PIC OF THE DAY

A ROADERS REVIEW

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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    This dashing dairy expert is not just your average milkman. He's a tri-athlete, a former classmate of Satoshi Nakamoto, and a crypto enthusiast who loves nothing more than delivering the freshest news and insights straight to your inbox.