Quoted from NPO:I've stayed totally quiet on this, but I'll come out now as I am genuine:
What is it with all these NFTs? I am looking at these pictures some of you are posting and am asking myself "Really? There is money to be made with drag gorillas?"
Seriously, I do not understand it - this feels VERY "fly by night" to me. Cryptos have been around for a minute, but this NFT stuff has the snake-oil vibe - at least the ones posted here. The ones of massive popular internet memes - ok - I do kind of understand it - some people want to have the 1 : 1 picture of Bad Luck Brian or the girl in front of the house fire or overly obssessed g/f...ok, got it. But these monkey and gorilla pictures......REALLY ?
Someone, please educate me. Cause I am stuck in "BTC/ETH" world with a tiny bit of MANA for fun.
Think of it a little differently. You are a promoter putting together a music festival. You propose a venue, a list of artists, most of which are unconfirmed, get logos and a marketing push to get customers. You have two options
a) Wait until the venue is confirmed, all acts are confirmed put the tickets on sale and email them pdfs
b) Early in the project you tweet out a possible location, a few acts that have agreed to attend (but not yet signed), and start dropping hints about big acts that could potentially be there. You announce a pre-sale of 10,000 tickets at a big discount, each with a chance for meet and greets or VIP sections. You incentivize early adoptors with the idea that (a) the tickets will skyrocket if big acts are signed and (b) that they have a chance at getting even bigger upgrades. These tickets are all shipped in a box with a special pre-sale lanyard and randomized artwork which indicates the potential bonuses.
First off, which is the better marketing plan? Kinda obvious which will generate more excitement. In addition, (b) is a bit of crowd-funding.. by getting early adopters to send their money sooner, you can use that to actually land the better venues and artists. It's a win-win. Now if those big artists get signed the value of these presale tickets go up, and these early buyers can either rejoice in the fact that they bought tickets cheap, or they can flip them for a profit because now there are a lot less unknowns.
The team can release a new round of tickets, now at a much higher price because there are now big artists signed, and sell until the venue is maxed out. All this happened before anyone ever stepped into the venue for the actual show they paid for.
This is exactly what's going on with NFTs.
1) NFTs authenticate each ticket
2) Pre-sales (mints, genesis sets, etc) is a means of crowd-funding, people throwing a little money at the project owners which allows them to execute on longer term plans
3) Randomized benefits feed into the human desire to gamble, but statistically there is a 75% chance that NFTs will go higher than their mint price, but less than that on secondary, showing the value of getting in early
4) Projects derive like 5% profits off of secondary sales, which also help feed into the future utility
5) NFT team executes their long-term plan (aka the show) after all the above.
6) And most importantly the engagement. Those 10,000 people who had the opportunity to go through the build up process, form a community, and derive all kinds of secondary value from the pre-show engagement. If you actually came through, your next show will have 10x the amount of people willing to jump into a pre-sale, and you can now ratchet up the pre-sale prices, get more crowdfunding, and have an even better chance at signing big acts.
In other words, when you're focusing on the crappy photoshop art on the ticket the scalpers on the street are showing you, you're missing the entire show, the experience that led up to it, and the massive after-effect of a successful execution of all the above.