Today we are glad to present to you a real old schooler who is embracing the future of NFTs. Guy Bahat is an international long term crypto expert who truly has seen the good, the bad and the ugly in crypto during his work. Therefore, we were really keen to hear his thoughts and perspective about the growing NFT market. Here they come; enjoy!
Fyggex: Welcome to our interview series, please tell our readers a bit about yourself.
Guy: I currently live in Zug, Switzerland but I am originally from Tel-Aviv, Israel. After completing the mandatory army service and serving as a combat intelligence officer in 2016, I utilized my prior knowledge of bitcoin from around 2010, and I started working in the blockchain industry professionally around 2016 – 2017.
Fyggex: When did you become interested in NFTs?
Guy: I first heard of Crypto Kitties when they launched. I invested in a project called Decentraland around 2017/18, which was one of the first NFT related projects around. It was a 2D map back then, and now it is a full 3D virtual ecosystem. This is where I got exposed to the concept of NFTs and was immediately intrigued.
I imagined NFTs to be much more prolific in the gaming scene by now. I like video games and the correlation there is very interesting. How NFts represent true ownership of digital assets, gaming items, fashion and more. To my surprise, last year (2020), the crypto-art market started to flourish and this is where a lot of people started to hear about the term NFT.
I have helped a lot of 2D and 3D artists to make the transition to become Crypto artists. I am proud to say it helped them change careers and pursue their art full time. When 2021 began, I started exploring how NFTs and the blockchain world could be applied to physical items as well, and this is how I started my company Finite (https://Finite.ltd), which is set to launch very soon (in Q3).
Fyggex: What has been most difficult for you personally during your NFT journey so far?
Guy: To be honest, there hasn’t been any difficulty so far, we’re on an uptrend. When the market will crash and when regulators start bringing down the hammer on NFT marketplaces, I’m sure it will be a challenging time for everyone involved. I’m completely ready for it.
Fyggex: Most NFTs are traded at online marketplaces, do you have any preference?
Guy: I bought some NFTs, obviously. My preference for marketplaces are the curated ones, because they choose beforehand who gets to mint an NFT, thus eliminating a lot of “NFT Trash” and remain somewhat eco-conscious.
I also like the Metaverses very much. Those are virtual worlds where you can own virtual real estate and basically build whatever you want on top of it, whether it be a museum or a casino. It’s like Minecraft in a sense, your creativity is boundless and you get to own every asset that you build.
I think it’s riveting because these digital worlds are building new economies. There are even people who work there full time. For example there are builders much like in the real world, there are musicians- you can go to live shows there.
It’s obviously very premature, the market is still getting to understand VR/ AR as they are all new technologies. But as these virtual worlds grow and get more people to use them, the future possibilities become more and more inspiring and amazing.
Fyggex: As it is a new technology area, how far do you think NFT can go?
Guy: It’s actually not a new technology, it’s a new protocol. Blockchain technology has been around for roughly 12 years. NFTs themselves are a protocol that started on the Ethereum network, and to answer your question, their potential is huge.
A lot of people who never used anything related to blockchain are now starting to test a lot of use cases thanks to NFTs. This goes for all digital assets, such as, artworks, music, movies, software, and the potential for more use cases is really interesting.
For example, NFTs could be applied to your driver’s license or your virtual identity. Just to highlight – There is very little adoption right now in the video game industry for blockchain and NFTs, and I truly think they will bring about a tipping point for mass adoption.
Fyggex: What do you think is the biggest competitor to NFTs?
Guy: NFTs are an umbrella term. Right now there are the ERC-721 and ERC-1155 protocols. Surely new protocols and new blockchains will come along, innovate and disrupt what is currently being used, much like what happened with the internet. There was Netscape and then Google came along.
We at Finite ltd. innovate the protocols as well, and aim to bring new solutions to this space. When something new comes along, people always try to make it better, make it faster, make it more robust, and apply it to more use cases.
Fyggex: You have said this is not a new technology, it’s just a new way of coding in blockchain. Could you elaborate more?
Guy: Instead of having a cryptocurrency with a max supply, of 21 million like Bitcoin has, think of NFTs as a cryptocurrency with the supply of one (1). They’re unique, and that’s their main benefit. They are usually “tied” or “point to” something else, which is unique and therefore it’s non fungible. You cannot trade an NFT for an NFT. Their value would be calculated differently.
Fyggex: Some other developers say that they want an NFT to be for the regular people. Do you think this will stay that way? Or would it be that only big companies and rich people are the ones being able to invest into it?
Guy: Right now the NFT market very much reflects a Pareto chart principle (Editor note 20/80 division). Just like in the music industry, where the top singers and performers usually earn a lot more than the new and upcoming indie artists, and the divide between the top earners and the low earners is massive.
I’m sure that similarly to the music industry, the top earners with NFTs will continue to earn a lot more. This is because the value of NFTs is derived mainly from what they point to. So if they point to a celebrity, his name is like a brand and this brand is worth money.
NFTs could also be used purely in a technological manner and not only for financial purposes. I mean, NFTs are for everyone, it’s a protocol and a technology and it depends on what you do with it, right?
For those who are looking to make a quick buck, NFTs also present opportunities for a lot of people. If you are creative, innovative and know how to reach the right people, being an early adopter of NFTs could put you ahead of many of your competitors.
Fyggex: Do you see problems with NFT hype, to be creating scams for instance?
Guy: Yes. I’ll tell you a quick story here. At the beginning of the year, an artist who you may know- Banksy, uploaded a lot of his works to Opensea.io and to date nobody knows if it was Banksy or not. I mean, there are a lot of people who try to infringe intellectual property to scam other people, like in any other industry basically.
I mean, just yesterday I heard of the biggest Ponzi scheme that unfolded right here in Israel, similar to the Bernie Madoff one. Scammers will always be around whether it’s in Blockchain related projects or Non-Blockchain ones. I would strongly advise you to research anything you intend to buy.
Fyggex: Do you think celebrities will take over the NFT market? They have millions of fans who basically are willing to buy anything from them…
Guy: Yes and no. Some have already kind of done it in a sense. I don’t think it’s sustainable and looking at the quality of the stuff that they produced, I’m not very happy with it either. Celebrities could do so much better. It’s basically a hype right now and some savvy celebs are trying to bank on this hype. I do think collectibles will continue to be sold by celebrities, and NFTs should be the new standard to verify their authenticity.
There will always be fans and people willing to pay money for collectibles and engagements for sure. But I think new, and interesting projects are actually going to come up. Projects with rare physical items, the ones in gaming, the new technologies and protocols. Those are going to be the ones that earn the most in my opinion.
Fyggex: Will that make NFTs look bad?
Guy: Think of the internet for a second. In the beginning of the internet, there were a lot of websites, which I’m sure a LOT of them did not survive to date. Why? Because they did not utilize foresight. This is what caused a crash like the.com boom – people were coming up with new websites and businesses that were not sustainable for the long term.
This is a core principle in my company Finite ltd. That is why it is called “The future proof marketplace”. We expect a lot of changes in the NFT market, and by design – we created agile technologies that could adapt to new innovations and rapid changes.
Will NFTs look bad? Hard to say. They are correlated to cryptocurrencies. Unfortunately. There were and still are a lot of scams, a lot of issues, and a lot of memes and dark humour. Nowadays Bitcoin and Ethereum are actually much more sound investments, meaning they appear to be much better assets now than they did four or five years ago.
Fyggex: As you are the expert, can you help our readers to understand the minting. Could you please explain the minting process for a person who hasn’t never done it?
Guy: For a person who never used the blockchain, the minting would be somewhat difficult, but not too complicated. It requires some proficiency with using a web3 wallet. Such as Metamask, for example, which in itself has some inherent problems and support is very limited.
A person who has never minted an NFT, I recommend them first of all to go on communities. There are a lot of them on the Clubhouse app, Facebook, Discord and there are a lot of good guides such as The NFT bible and Youtubers. There are tons of good resources.
On the Clubhouse app for instance there is a new NFT room every day, if not three or four simultaneously. To answer your question, basically you go to an existing NFT marketplace and follow the steps they list. Connect your crypto wallet, then choose what to mint and they basically do most of the heavy lifting for you. They may even mint the token for you. You can also use existing protocols or code a new one entirely, and that’s another way to do that.
Fyggex: What is the future for NFT investments? Will people be investing into it, making it grow even more and more commercialized?
Guy: In addition to the gaming that I lifted up earlier, I see two very interesting overall kinds of concepts related to investments in NFTs. The first one would be a fund-like structure, which basically baskets a lot of NFTs into one kind of pool and then you can invest in the ETF kind of vehicle.
For example, the B20 token did that with some Beeple artworks, meaning they aggregated a lot of his artworks and provided an investment vehicle to invest in several of his artworks at once. This is an interesting concept.
The second one would be within decentralized finance (DeFi), where you could potentially put your NFT to work and get a loan for it, or use it as collateral and get leveraged. All kinds of financial mechanisms that we know from the traditional finance industry are now being translated to blockchain and into NFTs specifically.
New investment vehicles-such as my company Finite, that allows investments in real assets/ traditional assets. What is critical with these kinds of assets is that their value is secure and therefore tokens that point to these kinds of assets are not as speculative as digital ones.
Fyggex: Do you think the NFT will be regulated like cryptocurrency in some countries?
Guy: Yes. 100%.
Fyggex: What would you recommend for newbies who want to learn more about NFT?
Guy: Start by digging into communities. There are a lot of them in the Clubhouse and Discord apps right now. People always ask questions, and there are people that spend countless hours there for the last six months, so they know all the answers. Facebook has a lot of good guides as well. The information is out there.
Fyggex: Final question. What would be your advice for creating an NFT?
Guy: Just remember NFTs depend on what you want to do with them. I’m assuming that you’re asking about making money from it. The answer would be: think long and hard on what you will create, who will buy it and what it is tied to.
I’ll just give an example, the Crypto punks that are now selling for millions of dollars, they aren’t especially innovative or beautiful in any sense. But what they did beautifully was their ability to create a community around them. This is their strength really, besides being very early of course, that’s another good point for them.
When you create an NFT, don’t just put an hour or two into it. Think about what you really want to do. Where the value will derive from? And of course, everything that surrounds it, like where should it be sold? What are the legal rights? and so on.
Thank you, Guy. It was a real honour to have you with us. We recommend all our NFT interested readers to check Guy Bahat on Linkedin and watch this space actively. Finite ltd. from Switzerland is about to change the game!
