NFTs, or non-fungible tokens, have been the subject of much debate recently, particularly from the perspective of how they differ from other crypto assets, such as Bitcoin and Ethereum. A recent series of tweetsPunk6529 highlighted some key differences, particularly with regard to the institutionalization of crypto and this article was inspired by these tweets. If you like him, be sure to give him a follow.
According to the tweets, while institutions were slow to adopt Bitcoin and Ethereum, they eventually "won" to some degree, with a large amount of these assets now locked up in centralized vehicles like custodians and fund structures. This trend is likely to continue, which has two negative implications: it hinders decentralization and means that late adopters may reap more gains than early adopters.
However, the situation is different with NFTs. Some crypto-native investors are no longer broke like they were in 2013, which allows them to take more ambitious bets and have more staying power. But the biggest difference is the non-fungibility of NFTs. Unlike Bitcoin and Ethereum, NFTs are not fungible, which means that each token is unique and cannot be replaced with another asset of the same value.
This difference has significant implications for the market dynamics of NFTs. While anyone with a small amount of Bitcoin could do nothing to prevent someone like Anthony Scaramucci from buying up huge amounts of the asset, the same is not true for NFTs. For example, if someone tried to buy up all the hoodie nerd glass punks, the sellers could simply say "no," as they are not fungible and cannot be easily replaced.
This creates a fundamentally different dynamic in how the NFT market will trade, which has been largely misunderstood so far. It means that there is no "weak hand" at the table that will sell and that NFTs may be able to resist the institutionalization that has taken place with Bitcoin and Ethereum.
Of course, this raises some concerns about creating a new crypto-native elite. However, the author argues that this elite has different values, goals, and objectives from the traditional elite. They have a chance to make the decentralized dream a reality, rather than simply selling their tokens to institutions at a higher price.
Ultimately, the fight against institutionalization in crypto needs to be led by the second and third-generation crypto folks, who have a chance to change society, not just sell their tokens to the highest bidder. While there may be some concerns about NFTs and the creation of a new elite, they also offer an opportunity to fight back against the power of the institutions and make crypto more accessible to everyone.
As you can see, the world of crypto and NFTs is rapidly evolving and the dynamics are changing. It's exciting to see how crypto-natives are coming together to fight against institutional power and create a decentralized dream.
What are your thoughts on this? Do you believe that the fight with the institutions needs to be led by the 2nd and 3rd gen crypto folks as @punk4156 and others suggest? Are you excited about the potential of NFTs and how they can change society?
Leave a comment below and let me know your thoughts. And if you found this article informative and engaging, don't forget to give it a thumbs up and share it with your friends in the crypto community. And hey, if you're feeling extra generous, you can even leave a tip!
