With NFT PFPs (Non-fungible token profile pictures) getting so much hype, everyone is kind of left wondering what the fuck is actually going on. Why are these profile pictures selling for so much, and whats the point of having an NFT profile picture as your twitter profile?
I wanted to expand on some thoughts I have on the future of NFTs, remixing some ideas taken from Balaji Srivan on the absolute stomper of a podcast with Tim Ferris about the decentralized economy of the world, pseudoanonymity, and online reputation.
Where the world is going, and what this means for your future self.
We are emerging from a world where you must live in a country, work in an office, and pay taxes in that country, to a world where you work entirely remotely, can live anywhere while doing it, and can beam value over the world without any sort of government to prevent you from doing so.
Hiring people who don’t reside in the same jurisdiction as your company was a challenge in the past for a couple of reasons:
- Companies did not have the systems to facilitate efficient remote communication and management.
- Paying the individual required the use of cumbersome and expensive wire transfers, provided that the person you are trying to pay even has a bank account.
Individuals now have the opportunity to perform jurisdictional arbitrage, where you work exchange your services for US market rate in a New York based office, while residing in South America and having a relatively minuscule cost of living. Plenty of hostels are being setup for remote workers with private offices, fiber internet and incredible amenities. Why would you choose to bear the winter in a $5000/month NYC loft and pay US taxes when you can live out the summer in Panama?
In addition to this, there are billions of highly intelligent and capable English-speaking people who did not have access to banking who now have access to a savings account on their phone, and companies can beam them money for every second of their work, instantly, for ~free. These populations are about to be activated as the most affordable and most capable workforces the world has ever seen. Like how globalization sent manufacturing offshore, the same will happen for skilled labour.
Enter the pseudononymous economy.
So we have individuals who are empowered to contract for companies, and companies who have the ability to hire. There is one unsolved problem – reputation and identity.
Many blockchain startups were trying to crack the code for digital identity so that you could ditch one more card in the wallet, and have a verifiable ID that lives on all your devices. As identity of the individual matters less than the quality of work and the amount of digital clout a person has, a pseudononymous economy emerges.
If I am an individual online who consistently outputs quality work for and have accumulated a reputation across my communication platforms, social media included, what does it matter that you have the ability to know who i am. If anything, without being able to confirm the authenticity of government issued ID in a emailed photo and my face by meeting me in person, the receipt of an NFT which already has a reputation is verifiably more secure.
Speaking from my own experience, we recently hired a solidity developer who refuses to disclose their name or details about his person, however they have launched other projects which I can attribute to his wallet which also holds NFT PFPs that they have owned since minting. This online identity gave us enough confidence to not only start working with them on ZeGarden, but also to entrust the hundreds of thousands of dollars which were at stake in the distributions from our project, and that the contract that they wrote was not going to only pay themselves.
Maybe the exorbitant prices aren’t entirely hype.
So why do NFTs and this digital identity have to cost something? In a world where an NFT you might own is the equivalent of a blue-checkmark, you need to have to put something at stake, in a community-recognized project to be able to show that this ownership of this asset is worth something, otherwise you could spin up infinite fake versions.
I’ll admit it, I’m a Bitcoin maximalist, and believe that Bitcoin has the opportunity to revolutionize the foundation of our financial system. When I first saw jpegs going for millions of dollars online the first thing that came to my mind was the ICO bubble of 2017.
Perhaps it is the unreleased Bitcoin NFTs on smart contract improvements like RGB protocol that end up winning the technology race because of the massive network effect Bitcoin has, perhaps not. My conclusion from working in this space is that like the idea of Bitcoin, the idea of NFTs is out and cannot be put back in the bag.