Quantfury Daily Gazette
With NFTs the devil is in the details
If this pandemic has taught us anything, it’s that there is a market for anything. Or so it seems, anyway. It doesn’t matter how niche it is, or how useless it might appear.
Take the collaboration between hip hop artist/TikTok personality Lil Nas X and Brooklyn art collective MSCHF that has led to the creation of Satan Shoes.
Satan Shoes are pretty much what you would think they are. They are pair of regular Nike shoes that have been re-made to look satanic and, get this, have actual human blood in the soles. Allegedly, anyway.
Yeah. They sold out in minutes. Of course, they only made 666 (obviously) pairs, but they sold for $1,018 each.
The company, MSCHF, is known for these stunts. They also produced something called Jesus Shoes a few months ago. Holy water in the soles. $4,000.
MSCHF’s whole business model is based on the double whammy of shock and scarcity. You shock the world with the audacity of your idea then limit how much of the product you sell. The attention the fall-out to the idea creates is the best marketing you can get. There might only be 5,000 people out there that want Satan Shoes, but if you only sell 666 pairs you can charge a lot of money for the ones that you do sell.
It’s all a bit of hipster nonsense, of course. The shoes are just regular Nike’s (and, yes, Nike is suing them. That’s part of the free marketing, I suspect) with some, likely, food colouring in the soles. But, you can’t charge a 10x mark-up on your arts and crafts project without a backstory and that’s where MSCHF are experts.
Not everyone can make Satan Shoes, or be as edgy as MSCHF is. In fact, MSCHF’s story will probably be a short one as there is a shelf life on this kind of stunt selling. They’ll move on to something else soon enough.
As much as it is to poke fun at the absurdity of Satan Shoes and Brooklyn hipsters, there is a lesson worth learning from the success – however fleeting it might turn out to be. It’s a business model that works.
It’s also the business model that is driving the current interest in NFTs right now.
Not the blockchain technology that makes NFTs work – that’s invaluable and why we continue to care about NFTs — but, rather the frivolous ways that the technology being demonstrated and talked about right now.
I’m talking about avant-garde digital artists selling artwork that lacks physical form, or Jack Dorsey selling the first Tweet ever constructed. The value in that stuff is in its scarcity and its trendiness. When the latter falls away, I fear that the scarcity won’t much matter when it comes to the value.
It’s not that there won’t be a re-sell value for these types of NFTs (or Satan Shoes, for that matter) in the short term. There probably will be. If you can catch the wave at the right time there would be money to be made speculating with either.
But, as a long-term investment? You’re probably just going to have a pair of ugly sneakers in your closet if you try and wait things out.
Or, a worthless digital file.
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