This article is written with the assumption that you understand what are NFTs and cryptocurrencies. If you do not, watch these 2 videos first!
What is Ethereum?
What is an NFT?

When I first heard about NFTs early in January 2021, I pushed it aside because the idea of paying thousands for a digital JPEG was absurd and I assumed it would be a rich person’s game similar to the physical art industry especially with $69 million sales by Beeple. But as I look back on my life, I guess NFTs are more relatable than I thought. In my opinion, it seems that one of the many reasons why older investors stay away from NFTs is because they have yet to experience what many in the millennial/Gen-Z grew up with and I hope this article would give some insight.

Early Childhood (Age 7–12)

Back in the late 2000s before everyone had phones, there were already many examples of items that displayed value to specific groups of people.
1. Country Erasers (Physical)

I remember in primary school how my classmates and I would play and collect these erasers in pencil cases, everyone would try to own “better” erasers of countries we knew like Singapore, USA, Japan. We traded erasers, bought them with the few cents/dollars we had… and even gambled by playing games vs each other. This was the earliest impression of physical items having perceived value despite having zero intrinsic value.

2. Animal Kaiser (Digital & Physical)

I am 1000% CERTAIN that boys my age had an Animal Kaiser phase, for anyone who does not know, Animal Kaiser is an arcade game by Bandai Namco where you receive card collectibles by winning in the game and use collected cards as characters for future games. We had binders full of these cards and prayed that we would receive a rare shiny card every single time we played. As technology advanced and we moved away from arcades, these principles stayed the same.

Early Teens (Age 15–17)

3. “Hypebeast” Apparel (Physical)

During the years 2015–2017, streetwear brands like Supreme, BAPE, VLone and Off-White exploded in popularity alongside sneakers like Yeezys, NMDs and Ultra-boosts. If you owned any of these brands and wore them out in public you were THE popular kid, and immediately rose in the social ladder, and these items were not cheap, T-shirts went for $100+, hoodies for $500+ and shoes over $1000. Even then many adults had zero ideas why clothing would go for such absurd amounts especially if they weren’t from brands like LV, Gucci or Dior.

4. Gaming (Digital)

Now, this is the section where I know has been the driving factor behind my understanding of NFTs, in their simplest forms, in-game skins and NFTs are all the same — — “Digital Art”. I do not even remember how much money I have spent buying skins for all my games, but it is definitely more than $1000, for a kid in secondary school that's a boatload of money. The issue with the majority of game skins is that once you buy the skin, there is no way for you to sell it or retrieve some value for it unless you sell your whole account. The first game that was had a marketplace for skins was CS:GO, CS:GO was launched on Steam which is a video game digital distribution service. CS:GO skins could be bought and sold on the Steam marketplace alongside other in-game items such as crates, which you use to unbox skins when you purchase a key from CS: GO. There were also gambling sites where you could use your skins as your “money” and bet on things such as E-sports or pure gambling roulette wheels. Even with such an advanced ecosystem on top of the game, there were zero opportunities for players to earn money through playing the game, even if they spent money buying skins that did not require gambling

Key Aspects

Throughout my examples, despite the changes from physical to digital and those in-between, one thing stayed common. Which are items that have “no intrinsic value” being worth more than what people perceive, as well as people using these items to flex their status. There is a reason for this need to show off but that would require diving into human psychology which is a separate topic. Even before NFTs, people bought houses, cars, watches and jewellery to show power and influence. As the world moved into the digital world, having physical assets had limitations for the number of people who could admire your assets, when you drive down the street in your Ferrari, maybe a couple of thousand passers-by will see it, and they probably will not even recognise who the driver is, but now that we live online, in the digital world, with our lives and personalities attached to our Twitter, Instagram and Facebook. Having very expensive NFTs would allow you to flaunt in front of millions, now that is some reach.

However, I still think that if we limit NFTs just to having a PFP with no utility, we are seriously undercutting the technological advancement here. Games like Axie Infinity, which is a play-to-earn NFT game where users can earn a token(SLP) that is needed in the ecosystem, and sell it in the open marketplace for money has already given us a taste of the future potential. This is changing lives. Of course, as the first game out there, Axie infinity still has problems with the economics of the game and the long-term sustainability and we shall see if it works. But for future games, NFTs will likely be a core part of the game where assets like skins and avatars can be bought and sold, and game developers earn money through commissions instead of direct sales, which would mean they would have to work harder to ensure that their game economy survives in order to profit off of commissions. The future in the NFT space is bright with space for everyone to hope in.

Real-World Utility

Aside from all the uses in the digital world, there are still many potential use cases in the real world that should not be ignored, with all the different certificates and documentation that you collect throughout your life, wouldn’t it be easier if you had a way to prove ownership of such documents through a certified token? Not to mention all the different forgery nightmares for employers.

1. Identification, certification and documentation
   As NFTs contain code with unique sets of information, they can be used to tokenise documents like academic certificates, licenses and medical records. The identity or certification would be issued directly over the blockchain as an NFT which would be traced back to the owner. NFTs would essentially be a digital storage to protest medical history, personal identities, and education and address details. When this technology is applied to immigration security for passports, we will see a large decrease in visa and passport forgeries.
2. Real Estate
   NFTs could be used to verify titles and ownership history for land and residential properties, not to mention expediting the property-buying process by removing unnecessary paperwork. REITs could also be disrupted if investors hold NFTs that prove their fractionalised ownership of a property. However, I am still not sure how smart contract risk would play out, it might be catastrophic if someone loses their ownership because of a hack, so this is an area that still has to be monitored closely

If you wish to learn more about NFTs, one person who is very easily able to explain NFTs would be Gary Vee, Gary Vee is an entrepreneur, author, speaker, and social media influencer who is heavily invested in NFTs and has his collection out. Here are two TikTok videos where he explains NFTs.

(1st Video) (2nd Video)

Summary

I hope this article has been insightful or at least interesting, I realised that many people in the older generation simply cannot fathom the idea of NFTs while many younger people seem to grasp the concept of an NFT easier and I wanted to find out why by looking back into my childhood experiences. If you are looking to enter the NFT space and have any questions, feel free to send me a DM on IG! (@piggybanksg). I will be writing an article soon on my successes and failures in the NFT space soon!

Thank you for reading!