In-depth analysis: the relationship between the value of NFT and social networks

Use the “Status-as-a-Serice” framework to analyze NFT as a social network.

Last Saturday, Puja and I went to our first out-of-town wedding since COVID (Congratulations, Coop and Liz!). We spent a lot of time in the car, driving to Richmond, and then back, which gave me a lot of time to think about some crazy ideas.

let’s start.

Status Monkeys

In-depth analysis: the relationship between the value of NFT and social networks

Throughout the weekend, the “living dead” followed me on Twitter. Not in the way of Hayley-Joel-Osman, it’s just that the avatar keeps appearing everywhere.

In-depth analysis: the relationship between the value of NFT and social networks

For the unfamiliar: the green guy is a CryptoPunk. CryptoPunks is a 24 x 24 pixel art NFT, of which there are, and there will always be, only 10,000. CryptoPunks was created by Larva Labs in June 2017 and is OG NFT. As new NFT projects appear every hour, CryptoPunks are scarce and valuable due to their age.

Therefore, as the value of NFTs has soared in the past few weeks, CryptoPunks has led this trend. The most expensive Punk sold 4.2k ETH in March. Its value today is 7.57 million US dollars. If you want to buy your own Punk now, the cheapest offer will cost you 51.85ETH. This is the “reserve price”. At this price, you will get a more ordinary Punk. If you want to buy rare Punks, such as apes, aliens or zombies, like the one seen above, you will have to pay more ETH.

There are a few more things to know about CryptoPunks:

  • Owning a Punk is a status symbol, just like owning a Ferrari or an expensive handbag.
  • Punk owners often use their Punk image as their profile picture (PFP).
  • It is not advisable to display a punk that does not belong to you as your personal photo.

This weekend, hundreds of people changed their personal photos to that single zombie Punk, which was sold at an auction on Friday for 1201.725 ETH ($3.75 million). No one frowned at so many people showing this Punk wearing a deconstructed party hat emoji, because they all have it.

In Friday’s auction, 478 people joined PartyBid, a new product created by the Anish Agnihotri and PartyDAO teams, allowing people to form a team to bid for NFTs, pool their resources, and compete with wealthy whales for millions of dollars of Punk . They call themselves “the Party of the Living Dead”. And they won.

In-depth analysis: the relationship between the value of NFT and social networks

Source: Chuck Anderson

PartyBid makes NFT more social. There is a party in the literal sense at the front and the opportunity for hundreds of people to buy, own and manage expensive NFTs together. Its social nature can be clearly seen from its website. The cursors and comments on the website fly around on the website in real time, and it feels like Figma and Masterworks gave birth to a child. As Friday’s auction continued, hundreds of people, represented by moving cursors and emoji, visibly zoomed in on the website. This is difficult to describe in words, as you can see from the picture above, you should go and see for yourself. 

Just like zombies, NFT should have been dead. What happened?

I have a theory.

On the fourth night of the fourth quarter, I was on the Good Time Show of Sriram Krishnan and Aarthi Ramamurthy in the Clubhouse. I joined Gabby Dizon (Yield Guiild), 3LAU, Donnie Dinch (Bitski), Jarrodd Dicker (The Chernin Group), Jon Lai (a16z) and Jesse. Walden (Variant) discusses Metaverse.

Readers of Not Boring will be very familiar with Metaverse at this point. We have been discussing it for several months. I made a mistake, which is to associate anything imaginable with the Metaverse.

In the past few weeks, the meta universe has become mainstream. Matthew Ball published his 9 series of articles. Satya Nadella talked about the corporate meta-universe (sounds interesting!). Zuck and Co have said “Metaverse” countless times in the past few weeks. Ben Thompson wrote an article about the meta universe.

NFT will obviously play a role in the meta-universe. When everything is digitized, it will be key to prove that you own something and can carry it on the Internet. But this is not a meta-universe work. It is a social network work.

In the Good Time Show talk, Jarrod Dicker mentioned the importance of community and status in Web3, which triggered a child’s thinking. NFT checked the boxes of many successful social networks from Eugene Wei’s Status-as-a-Service. 

Before the arrival of the complete meta-universe, something bigger than jpegs had happened. NFTs began to feel a lot like a new social network, surpassing other social networks and communities—similar to Superverse—for evaluating social networks, nothing is better than the framework proposed by Wei in StaaS (Social Status as a Service) Of it.

Status-as-a-Service

(If you have already read and understood “Status-as-a-Service”, you can skip this part).

Eugen Wei, formerly the product leader of Amazon, Hulu, Flipboard and Oculus, is one of the best authors of scientific papers on the Internet. Almost every article he wrote has become a classic, and his “Social Status as a Service” written in February 2019 may be his greatest contribution.

This article looks very short in Not Boring. Its word count has reached an astonishing 19,825 words. If you haven’t read it, I strongly recommend you to read it, but for now, I will summarize a few key points related to this article.

Wei started with two principles:

  • People are status-seeking monkeys
  • People seek the most effective way to maximize social capital

Although these are not controversial claims, Wei believes that we have not analyzed social networks through the dimensions of status or social capital. Money is easier-there are numbers, and the measured things will be analyzed-but, he said (emphasis is my point of view):

In many respects, social capital is a leading indicator of financial capital, so its nature deserves more attention. This is not only a good investment or business practice, but also analyzing the dynamics of social capital helps explain various online behaviors, otherwise it is unreasonable.

In his article, less than 1,000 words, two years before the NFT frenzy, Wei unknowingly laid the foundation for analyzing what is happening. NFT blurs the line between social capital and financial capital. As the media quickly pointed out, it seems irrational to buy jpegs for thousands or millions of dollars.

The mistakes made by those who deny NFTs are the same mistakes Wei believes people make when analyzing social networks: ignoring the importance of social capital. Traditionally, people use Metcalfe’s law to explain the network effects that drive social networks. “The value of a telecommunications network is proportional to the square of the number of users connected to the system (n^2)”. According to Metcalfe’s law, the more users a social network has, the greater its value to each new user.

The problem is that Metcalfe’s law does not perfectly explain what happens in the real world. Only Metcalfe’s law can predict that no matter which network gets bigger first, it will continue to build an increasingly insurmountable leading position by being the most valuable to each new user. But Facebook took MySpace, and Instagram and Snapchat took away the attention of young users from Facebook. People’s preferences are not captured so clearly.

This is not to say that network effects and Metcalfe’s law are wrong, but they fail to capture the reasons why a person may use social networks, rather than pure utility, so Wei proposed a new framework to analyze the power of social networks , Adding social capital to it.

In-depth analysis: the relationship between the value of NFT and social networks

Source: Eugene Wei

Wei evaluated the power of social networks from three aspects: social capital, entertainment, and utility . In the article, he focused on social capital and utility.

The utility is relatively easy to understand. If you can find the answers to your questions on Quora, or easily reach your high school classmates whose numbers have been lost on Facebook, these products will provide you with utility.

On the other hand, social capital is more difficult to define. It relies on the creation of a “successful status game.” To explain why some new social networks succeeded while others failed, he used an analogy: cryptocurrency.

He said that the new social network is similar to the initial token issuance in four aspects:

  1. Every new social network will issue a new form of social capital, namely Token.

     

  2. You must show proof of work (PoW) to get tokens.

     

  3. Over time, it will become more and more difficult to mine new tokens on each social network, creating inherent scarcity.

     

  4. Many people, especially the elderly, scoff at social networks and cryptocurrencies.

     

This is really a good analogy, take Bitcoin and Twitter as examples.

  1. Bitcoin issues Bitcoin (BTC), Twitter “issues” followers.

     

  2. Miners get BTC for ensuring network security. Twitter users gain followers because they post humorous, funny, or mind-boggling content on Twitter with less than 140/280 characters.

     

  3. The cost of mining BTC is now higher than before, and the difficulty will continue to increase until all 21 million BTC are mined. In the early days of Twitter, you could get fans by what you ate for lunch on Twitter; today, people have turned to the long-term.

     

  4. This is self-explanatory.

15 years ago, Bitcoin and Twitter did not exist. Both are the dominant forces today. They reward early adopters, incentivize them to do work for the network, and make it more and more challenging to mine new tokens, thus starting from nothing.

These four points are all important, but the most useful is the idea of ​​proof of work in Status Game. If every person who signs up for Twitter gets a million followers because of registration, then there will be no social capital with one million followers. The fact that high fan counts are scarce makes them valuable, and the requirement of proof-of-work enables scarcity.

Aside from entertainment, Wei talked about five arcs that social networks can follow, four of which are the trade-offs between social capital and utility over time:

In-depth analysis: the relationship between the value of NFT and social networks

Source: Eugene Wei

  • First is utility, then social capital. “Coming for the tool, staying for the network.” Instagram first attracted users with a simple photo editing tool and became a photo-based network on which people built huge fans and businesses.
  • First is social capital, and then utility. Wei emphasized that Foursquare, Wikipedia, Quora, and Reddit are products that use the promise of social capital to let people do free work, and then become public utilities.
  • Utility, but not social capital. Information applications are very useful for communicating with people you know, but they cannot really help users build social capital.
  • Social capital, but its utility is small. Wei classifies Facebook in this category. He mentioned that many of his friends just stopped using Facebook, which has no impact on their lives (this also describes me, and I guess it also describes many of you).

The fifth category, the “Holy Grail”, is to have both social capital and utility. To find an example, Wei mentioned WeChat in China, which combines the dynamics of Facebook’s Moments ((social capital) with a lot of practicality). I wrote about this:

People use WeChat to send messages to friends, shop, watch news, play games, pay in physical stores…Almost everything you can do on your mobile phone, you can do it on WeChat.

WeChat created a social capital and practical killer from the very beginning, which has not really been replicated in the West.

However, even for the right social networks, Wei pointed out that there are two forms of asymptote that can limit growth or lead to a complete collapse.

Social Asymptote #1 is the proof of work itself.

Not everyone in the world can obtain social capital on any particular social network, which creates an upper limit. I am fascinated by TikTok, but I have never done TikTok, because I am not a very good dancer, I just don’t want to put in the effort to do what TikTok algorithm requires. TikTok is still growing at an alarming rate, but if even someone like me who loves social networks is unwilling to use it, then there will be a ceiling somewhere.

Social asymptote #2 is the inflation and deflation of social capital.

In terms of inflation, when a social network is too successful and too many people use it, the company behind it inevitably needs to introduce an algorithm to handle all users. Wei believes that it is very possible for Facebook to introduce algorithms, because the only scarce resource in a rich digital world is the user’s attention, so it is necessary to provide what they are most likely to participate in. This makes sense, but it is a difficult turning point for any company that relies on Facebook to connect with users.

In terms of deflation, social networks will become less cool as more people join. The classic example here is what happened to Facebook when parents started to join: all the young people left to go to Instagram and Snapchat. Once the cool kids start to leave, the slightly less cool kids will leave, then the next group, and then the next group, because there are more less cool groups (in this case, the parents). If you join, the proportion of cool people will quickly deteriorate.

“At this point,” Wei reminded, “the product or service is best to be as far as possible on the utility axis, otherwise the rate of user loss may cause nosebleeds.”

This is the core of the argument:

Social networks need to be analyzed based on content other than their network effects.

There are three analysis axes. Social capital, utility and entertainment.

New social networks are like ICOs, especially because successful social networks use proof of work of appropriate difficulty to create scarcity and status.

There are many paths to social networks, but the best is that they have high social capital and utility from the beginning.

There are two asymptotes that even successful social networks may encounter: the upper limit of proof of work and the expansion/deflation of social capital.

Those networks that have high social capital from the beginning need to find ways to build utility before encountering these asymptotes in order to survive and develop.

Wei gives some examples in the rest of the article and adds to the richness of these examples. Again, you should read it, but for our purposes, I will highlight a few particularly valuable tidbits:

Social capital can be used as a temporary energy source . “You can regard such social capital accumulation incentives as a way to transform the potential energy of status into any form of kinetic energy your business needs.”

The new work proved to extend the time of the status game. Why social networks need to add new forms of proof of work to extend the half-life of status games, and what they can learn from gaming companies. “Las Vegas casino games pay real money and set an attractive bottom line for the game’s return on investment. Some MMORPGs provide players with other benefits, such as a sense of community, which is more challenging than pure skills in playing games. Lasts longer.”

Social capital becomes financial capital, and vice versa. “These transactions allow us to give tangible value to social capital, just as people understand the value of intangible assets, such as the level of “World of Warcraft” characters when they are sold on the open market…”

The lack of portability of social graphs makes users feel frustrated. This sentence is particularly apt and highlights the main difference between traditional social networks and NFTs, so I will quote a paragraph here.

From the point of view of existing social networks, the restriction on map porting is a positive factor, but from the point of view of users, it is frustrating. Considering the difficulty of fighting social networks under antitrust consumer welfare standards, one option to curb the power of large network effect companies is to require users to allow their graphs to be brought to other networks (as many people suggest) . This will weaken the power of social networks on the axis of social capital, forcing them to compete more on the axis of utility and entertainment.

What if you can reap the benefits of social networking in a more portable and decentralized package? It’s time to turn to NFT.

A brief history of NFT

As a quick review, NFT stands for non-homogeneous tokens. The power of NFTs is that they make digital assets scarce. Scarcity makes digital assets valuable, just like exotic cars, artwork or rare stamps. If there is no way to prove that the owner purchased the official version, Beeple’s Everydays will not sell for $69.3 million.

In-depth analysis: the relationship between the value of NFT and social networks

Source: Beeple

NFTs started appearing in CryptoKitties in 2017, but they really got hot in early 2021 (I first wrote about them at the end of January). Beeple and NBA TopShot led the wave when BTC and ETH soared to all-time highs. The new cryptocurrency rich did what the rich did: buy art. NFTs have received incredible treatment and are regarded as a plaything.

In-depth analysis: the relationship between the value of NFT and social networks

Source: The New York Times

Then, in April, the price of cryptocurrencies fell, and NFTs also cooled down. The unbelievable man murmured: “Look, when people started paying millions for jpegs, I knew it was a bubble!” 

In June, as one of many blogs, there was an article like this on the cryptocurrency website Protos, which mentioned that the transaction volume had collapsed by 90%:

In-depth analysis: the relationship between the value of NFT and social networks

Source: Protos

The second sentence of the article is “NFT reached its peak on May 3 and sold 102 million US dollars in one day.” However, the party officially ended: “But according to data analyzed by Protos, in the past week , NFT’s sales are only 19.4 million U.S. dollars.”

Then, in the past month or so, interesting things happened. NFT came back vigorously. In the past 24 hours, only two markets-OpenSea and Axie Infinity-have worth $106 million in NFT transactions.

According to data from DappRadar, in the past 30 days, the trading volume of the top ten NFT markets was US$1.86 billion.

In-depth analysis: the relationship between the value of NFT and social networks

Source: DappRadar

This time, it feels like NFT is driving the price of ETH and BTC, not the other way around. The reason is that although the U.S. Securities and Exchange Commission (SEC) is becoming more and more interested in supervision under the new chairman Gary Gensler, and the proposed Warner Portman amendment may bring harm to the infrastructure bill, these tokens’ Prices are still rising.

So why are NFTs back, and why might they exist for a long, long time? Let us look back at our friend Eugene·Wei.

Investment-as-a-Status

The best starting point is Wei’s own starting point: two principles.

  • People are status-seeking monkeys
  • People seek the most effective way to maximize social capital

So, those of us who are pursuing status are turning to digital monkeys, as the most effective way to maximize social capital, which is very mysterious.

Apes played a leading role in the NFT summer activities.

In the past month, the third place NFT collected was Bored Ape Yacht Club (BAYC). Like CryptoPunks, there are only 10,000 Bored Ape.

In-depth analysis: the relationship between the value of NFT and social networks

Source: DappRadar

BAYC website called itself “a limited NFT collection, the Token can be used as your membership in the Ape Swamp Club”.

In-depth analysis: the relationship between the value of NFT and social networks

Source: Bored Ape Yacht Club

Unlike CryptoPunks, BAYC is brand new: it launched on April 30th. But it is already the third most popular NFT series, probably due to its combination of social capital and practicality. The New Yorker’s Kyle Chayka recently wrote an article titled “Why Bored Ape Swept Twitter?” in which Matt Galligan, the founder of XMTP (his Twitter profile picture is an ape) said: “It has become a certain status symbol. It’s a bit like wearing a high-end watch or rare sneakers.”

Apes is a theme, even outside the digital wall of Yacht Club. Two of the four most expensive CryptoPunks ever, and the two most expensive sold in July, are rare apes:

In-depth analysis: the relationship between the value of NFT and social networks

Source: Larva Labs

If people spend millions of dollars to look irrational on pixelated pictures of apes, then “analysis of social capital dynamics can help explain all online behaviors that may seem irrational.”

Therefore, instead of denying that it is very obviously becoming a real thing, let’s dig a little deeper and throw the NFT on Wei’s axis. We even included the fun of entertainment.

In-depth analysis: the relationship between the value of NFT and social networks

This is the valuable NFT power: they are high in social capital and utility, but they are getting higher and higher in entertainment. They have reached the three elements of social networks.

Social capital. NFT is the social capital that owns the skin in the game. It is “Investment-as-a-Status”. There are only 10,000 CryptoPunks and Apes. In this limited collection, some are particularly valuable and therefore have a high status. Owning CryptoPunk or Bored Ape and often using it as your personal photo on Twitter or Discord or Telegram illustrates some of your situation. They said that you were either very early or very rich, or you were very early and now very rich. The use of high-priced things to increase social capital is not new-look at art, expensive cars, yachts, private jets, handbags, or any number of scarce items bought by very wealthy people to indicate status. However, NFT is even easier to identify and make public.

Practicality. NFT can also be used as an investment, as a ticket to the Discord discussion group, or even as a digital thing you can hang on the wall. Over time, as NFTs develop and penetrate a wider audience, owners will gain activities and unique experiences.

Currently, sellers who purchase Bored Ape can already enter BAYC. NFTs like Axies provide real utility: Ownership means employment for tens of thousands of people. Meebits from Larva Labs, creator of CryptoPunk, with 3D models and animations, can be used as a character in the game.

In-depth analysis: the relationship between the value of NFT and social networks

Meetbits, from Larvs labs

entertainment. Although Wei did not enter this field (until TikTok and Category Hat), most successful social networks also score high on the entertainment axis. TikTok can be said to be an entertainment network and also a social network. The same is true for YouTube. People lurking on Twitter for several hours every day, without interaction, purely for passive entertainment. NFT is also entertaining: it’s fun to observe sales, some people are already building their own characters and online characters starring in apes or punk. Bidding on PartyBid is both a social activity and an investment.

The entertainment axis of NFT has just begun. Punks Comics is creating comic books based on 16 Punks, and more comic books will come out, and they will soon be expanded to Bored Apes.

In-depth analysis: the relationship between the value of NFT and social networks

Source: Punks Comics

This is obviously just the first step. Many NFT masters believe that there will not be any major cultural events that will not be commemorated as NFTs. This will give back to the event itself and may change according to what happens in the IRL.

Therefore, NFTs provide social capital, utility and entertainment… How do they respond to Wei’s idea that the new social network is similar to an ICO? Given that they are all cryptocurrency projects, this question is almost too simple:

  1. Every new social network will issue a new form of social capital, namely Token. ✅

     

  2. You must show proof of work to get Token. ✅

     

  3. As time goes by, it becomes more and more difficult to mine new tokens on each social network, creating inherent scarcity. ✅

     

  4. Many people, especially the elderly, scoff at social networks and cryptocurrencies. ✅✅✅

There are some subtle differences.

NFT is more directly linked to social and financial capital. One way to get a valuable NFT is to enter it early and get your hands when it is cast, or when it is so early that the wider society has not yet generated interest. Another way is to buy one directly. The former is more proof of work-figuring out which projects should be supported early-while the latter may be closer to proof of equity-take out your ETH to support and participate in the project.

There is also a direct similarity: many people, especially older people, will sneer.

Even I will admit: NFT, as a social network, feels like a bridge too far.

They don’t look like social networks; if there are, they look like small communities. However, the local exotic car clubs are also a kind of social network, just like country clubs, they are just too small to have enough analytical significance. NFT brings status signals and social capital to the Internet globally. However, if Facebook, Snapchat, TikTok and Twitter are all social networks, then NFT feels different things.

I think they are, but this is also the correct strategy.

In Social Status as a Service, Wei wrote a chapter titled Why copying work proved to be a bad strategy for status-driven networks. Basically, using the same core proof-of-work mechanism as the existing social network and adding some features will not work, because it requires the same skills to do everything well, and people tend to have more people. Bitclout, like Twitter, but also a cryptocurrency, still rewards people for doing the same thing Twitter does: saying something humorous, funny, or smart. The difference is that if you succeed on Bitclout, your tokens will become more valuable and you can make money. The direct exchange of social capital for financial capital may be enough for people to repeat their work or transfer their work to a new platform, but this is very challenging.

Instead, you need to reward a completely new behavior. NFTs may be different enough, and they do not require people to leave their favorite existing social networks. In fact, if everyone is showing off and talking about their NFT on their favorite existing social network, it is better for the NFT collection and all holders. This buzz can directly create more demand, or it can create indirect opportunities. If Netflix executives see everyone talking about CryptoPunks on Twitter, they might turn it into a show that rewards owners. If the people at Christie’s auction house saw everyone in their Discord discussion group talking about Art Blocks, they might take Squiggle out for auction, bringing credibility and influence to the entire column.

In-depth analysis: the relationship between the value of NFT and social networks

Chromie Squiggle #5994 Author: Snowfro, ArtBlocks

When this happens, each NFT owner (or owner group) will build up huge social capital, and they may bring this capital to the network. If CryptoPunks get a Netflix show, the Punks starring in it may become their own celebrities and build exogenous social capital that they can use in a series of social networks.

NFT is not a social network in the traditional sense. There is no NFT company. They don’t have a home, no place where every NFT owner gathers and NFT companies gather. Maybe OpenSea will do this? Maybe it’s a blockchain game/virtual world like CryptoVoxels, Decentraland or The Sandbox. Maybe someone has established a social network with a pseudonym, and having an NFT is the price of admission, just like the @harvard.edu address is for Facebook. Most likely, this is not any of the above cases. It is something new: a regulatory agency.

I don’t mean super like “super”! I mean, NFT may be a social network that sits on top of other networks, or “super”.

As Wei wrote, “From the point of view of existing social networks, restrictions on porting graphics are a positive factor, but from the point of view of users, it is very frustrating.” He said that if regulators Forcing social networks to make their charts portable will “weak the power of social networks on the axis of social capital and force them to compete more on the axis of utility and entertainment.”

What if it was not regulation, but a new entrant who proved the power of portability. When I wrote, “Cryptocurrency is a kind of native token for big online games,” I am referring to this kind of portability. You can gain status in one place, own it without platform risk, and carry it with you on the Internet. The same is true for NFT, no matter which platform rises or falls. Any social network with a profile picture (that is, all social networks) is fertile ground for NFT dissemination. Owners have used their Punk as their Twitter profile picture or displayed their RTFKT sneakers on their Instagram photos. 

Moreover, this is not just a personal activity. People who collectively own a specific NFT, such as the Party of the Living Dead or DAO with the NFT, can move in groups to any new platform, use Discord as a base, and initiate missions to all new areas from there. On new and existing platforms, members can bring valuable NFT exogenous social capital, and build their NFT role social capital in the form of a team. This topic talks about scattered NFTs as small networks and the ability to turn 10,000 scarce assets into 10,000 scarce assets supported and promoted by hundreds of thousands or millions of people.

In-depth analysis: the relationship between the value of NFT and social networks

Wei mentioned Chris Dixon’s idea of ​​”coming for tools and staying for the web”. NFT makes it possible for people to use tools to bring the Internet to the places with the most social and economic value.

For all the NFT arguments, it is also important to point out the obvious warning here: the price of a particular NFT or the total demand for NFTs may fall, perhaps sharply. Even non-foam has foam pockets. Recently, another 2017 antique NFT series, ether stone, has seen a surge in demand, with the price of stone exceeding $100,000. Even the creator of the project called it “the pet rock on the blockchain”. This recovery seems to be a test of how much the community can push their power to make anything worthwhile.

In-depth analysis: the relationship between the value of NFT and social networks

Source: EtherRocks

In other words, NFTs do seem to have some characteristics that enable them to resist the characteristics of the two asymptotic lines proposed by Wei.

For asymptotes 1, the proof of work, NFT has the ability to add unlimited new proofs of work, which Wei said can extend the half-life of state games. The two examples he used to successfully extend the life of games-Las Vegas casino games and MMORPG-are because they have characteristics in common with NFTs. Like casino games in Las Vegas, NFT can “use real money to set an attractive bottom line for the return on investment of the game.” Like MMORPG, NFT’s sense of community can last longer than purely technically challenging games. In other words, NFT will face gradual progress from the adoption and affordability of cryptocurrencies. NBA TopShot and Fractional are taking steps in the right direction. There is no doubt that more innovations will come to make NFT easier to be accepted by more people, while retaining the benefits of scarcity, or using other benefits, such as Community, replacing scarcity.

In response to social asymptote 2, social capital inflation and deflation, NFT has the advantage of decentralization. Although some platforms may display NFT in the algorithm, the NFT itself is movable and can be used and displayed anywhere the owner chooses. They may also be less affected by evaporative cooling, because NFT is not a single thing-they are a group of smaller communities, each with its own standards. There are only 10,000 Punks, but in the end there may be thousands of DAOs or partial ownership groups, each of which forms its own small community with its own standards and rules. This fractal structure should make them more flexible. In addition, due to the proof of equity and the fact that the owner chooses when to sell, parents will spend a lot of time and money to take over CryptoPunks, just like they took over Facebook.

It’s still early days. Even if I like these things, I don’t own Punk, Ape or other major collections. Need to build more infrastructure and build more structures to connect different NFT projects. But it seems that NFT has the right ingredients to build a new form of social network-Superverse on the basis of existing networks such as Twitter, Instagram, Snapchat, Discord and TikTok, and continue to adapt and develop over time.

New NFT projects can be launched using an effective combination of social and financial capital. Ownership brings social capital, utility and entertainment. There is an evolving proof of work, from finding the next big event to creating brand extensions like Punks Comics, to marketing specific NFTs to increase the visibility of the entire series. The owners of Punks have bought billboards in New York City, Miami and London to spread the message. NFT is part of a great online game, so the rules and opportunities are always evolving and expanding. When you combine money, status, and community, powerful things happen.

As always, I was the first to admit that all this sounds crazy. NFT feels more like a fashion than a new form of social networking. However, thanks to Eugene Wei for giving us a framework for evaluating the strength of social networks, and NFT’s performance in this framework is surprisingly good. In the 19,825 words of “Social Status as a Service”, there is not much that can refute the idea of ​​NFT as a social network; in fact, almost every part has episodes supporting this idea.

The next big thing will look like a toy at first. The next big social network may not look like a social network at all at first. The future will be crazier than we can predict, and social networks based on jpeg ownership certainly meet this requirement.

So, what’s the enlightenment? What do you use this information for?

Social networks will reward early adopters, and social networks with capital investment will bring a double whammy to early believers. Go explore. Find an NFT that resonates with you, join a PartyBid, and get involved. For the sake of God, don’t be one of those old people who sneer at NFT.

Original link: https://www.notboring.co/p/status-monkeys

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/in-depth-analysis-the-relationship-between-the-value-of-nft-and-social-networks/
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