Sunday Thoughts - Why NFTs will become big

NFTs are probably one of the most hyped topics in the space right now.

But what is behind the hype? Is the whole thing just a bubble, or is there more to it?

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Over the week, I've been thinking about that, and I'd like to share my thoughts with you about this topic. In that sense, welcome to a new episode of "Sunday Thoughts".

NFTs seemed suspicious to me at first. Why? I couldn't do anything with this topic. I'm not interested in video games, nor do I understand that people pay thousands of dollars for digital cat pictures. I am not kidding; somebody paid that amount of money for a digital cat picture. 

But then I started to get more involved with the topic.

What you have to know: In my childhood, I was the stereotype of a German boy. My day started with thinking about football (football=soccer) and ended with a game of FIFA10 on my PS3. 

Especially interesting was the time of the World Cup and European Championship. At that time, you could get Panini stickers at the gas stations in the city, at which point I probably spent several hundred Euros for various football stickers throughout my childhood. For some reason, I was fascinated by the pictures of my favorite players, and just the thought of filling up my collection booklet did not let me sleep at night. I was not even the only one with this hobby. Hundreds, no thousands of children, all over Germany, exchanged different stickers back and forth. For us, they had a value, even though they were just paper.

It was also not an option to copy the stickers in the next internet cafe because they would not be original and worthless. 

So far, so good, but what does that have to do with NFTs?

Well, NFTs work on the same principle, only much more abstract and better. NFTs can be all possible objects that can get tokenized and made unique using computer code; for example football cards. As already mentioned, I am not the guy who sits in front of a computer playing video games the whole night; however, I am interested in football.

Football was the reason why Sorare was so interesting to me.

Sorare is a kind of a fantasy football league where users can set up a team every weekend. The players for each team are collectible cards that are connected to the real world. So, if a given player scores a hattrick on Saturday, he earns many points for your team. However, single-player cards have different values. At first, every player who joins the league gets ten white cards for free. They are not very valuable because they are not rare or so. More importantly, the cards only have a parameter of 2.2 to 2.6. This means that if one of your players has a fantastic weekend and f.e. collects seven points, these points only get multiplied by 2.2 or 2.4. If you have the same player as a rare card (red), super rare card (blue) or unique (black), the parameters are way higher. A player as a black card f.e collects points with a parameter of 21.6 even though the players themselves are the same; only the cards are different.

The more points your team earns, the higher you end up in a given league table. Therefore, users can get rewarded with prizes if they win the league. If a user wins the league, he can win more special cards or even Ether.

In simple words: The higher your card levels are, the higher are your chances of winning valuable prizes.

Nonetheless, this is not even the best part. When I was a child collecting football stickers, there was one problem that came up every time! As soon as a tournament or championship ended, the stickers lost their value. Nobody was collecting stickers of the World Cup 2010 in 2011, even though everybody spent a lot of money on this hobby. The printing companies created new stickers or cards for different tournaments and championships, and everything got started again.

However, this is a problem that Sorare tackles. You can set your player cards up as long as they are active even though they change their clubs. So, if you buy a 17 years old goalkeeper, you can be sure that this player's card can earn you points for the next sixteen years! 

In addition to that, it is essential to mention how big the industry of football is. Even today, some people spend hundreds of Euros every year to buy special cards on FIFA Ultimate Team. Sorare could be way more attractive because gamers could begin seeing their teams more as an investment than just as a random computer game.

Precisely this is what I learned this week. Even today, the gaming industry is enormous and now imagine if gaming becomes a kind of investment strategy due to NFTs. Price tags for NFTs in different games could skyrocket; however, this is only one side of the story.

To conclude, nearly everything could get tokenized, making some objects more resilient against fakes. NFTs could make digital IDs, artwork, certificates, and many more things possible. So, NFTs are much more than just collectible computer game items. 

Their potential is endless. 


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All information presented above is for educational purposes only and should not be taken as investment advice.