Sometimes I think about how some tokens that were nothing in the market rose and turn to be a big deal and gem. I understand how demand and supply work, how adoptions drive up token value. However, it amazes me to see Doge at this price today, the likes of Shiba Inu and others. I still relate some of these coins to the hype from the big dudes in the ecosystem. Some are related to the fact that banks are also failing in their services and people are believing in decentralization.
I had a meetup some days ago and someone asked what gives value to digital assets like NFTs. The answer is simple, but could be extensive. How would digital art cost millions of dollars? Some arts don’t look like something that should sell for $20, but we see $500,000 and above in them. Then this made me remember the statement by the Governor of the Bank of England, Andrew Bailey.
“[Cryptocurrencies] have no intrinsic value. That doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.
“I’m going to say this very bluntly again – buy them only if you’re prepared to lose all your money.”
I think Andrew Bailey is just another version of Warren Buffett and he will probably drop his millions or billions in Bitcoin in months or years. However, that statement might also be based on hypocrisy.
But talking about value... what really is value?
Someone asked me through twitter if I could help them with minting and selling NFTs. I fixed a meeting with them. I got to the place and saw amazing art works. Then I got the information that someone just bought one of them for #5,000,000 ($10,000).
Arts are great and I love them, but I can’t place a value of #5 million in my mind on the art and I concluded that value is purely what you believe in. The more people in something, the more value they will have. The more the demand, the more value they have.
Value is purely what you believe. Just don’t believe in fake values. You always need to be prudent in every approach.