A few weeks ago, while surfing the net and loitering on Facebook, I was surprised to find out that Pugad Baboy, one of my all-time favorite comics, would be opening for minting.
Pol Medina, Jr., the guy behind the classic comic strip that humorously depicts the Pinoy life, has partnered with Ark of Dreams and joined the metaverse. As a way to immortalize his legacy, he transformed his iconic comic strip into one of a kind NFT Collection.
For the past years, NFTs (non-fungible tokens) seem to have exploded and are slowly gaining ground in the art world. But are they really worth the money – or the hype?
Since I’m not really well-versed with this, I had an interesting conversation with Alfred Someros and Karl Ruelan – the punks behind the Bored Punks of Society, a newly-established Filipino crypto enterprise – one afternoon while having lunch at Brasserie on 3 in Conrad Manila.
From giving online gaming tips to their growing fan base, the duo found themselves conversing about financial literacy and how to make strategic investments in the uncharted world of NFTs.
They started researching NFT, its beginnings, and developments, before later on creating their own Filipino community. Then, they started doing podcasts to answer the growing queries every Saturday, their free time, since they are still studying at UP Diliman. Alfred is a sports science major with a background in organizational management, while Karl is a mechanical engineer major.
Eventually, the Bored Punks, as they are known in the crypto community, turned their passion for online gaming into a sound investment.
They initially offered 7,640 Avatar-based NFTs for approximately P2,500 each. A month after its official release, they sold it out for 25 matic each. Soon, Bored Punks found itself finishing top 3 in Opensea World Rankings in the Polygon Network, where the young entrepreneurs successfully resold their NFT collection for over P510,000, one of the highest registered NFT profits ever made at the time among Filipino NFT investors.
But what I like most about these young businessmen, they are not solely after earning money. They wanted to create a financial literacy movement.
Alfred shared that they “wanted to help other Filipinos learn about NFTs and how casual gamers can actually go on a much deeper level and engage others to earn a respectable living.”
“From what is still considered a gray area for us Filipinos, we want to help create more success stories for others by breaking it down for the everyday person,” the duo enthused.
If you are looking into NFTs, we need to start with the most basics – what are NFTs?
For the uninitiated, telling the meaning of the acronym doesn’t make things clearer. Really.
But in a nutshell, NFTs are a digital way of registering digital assets (art, GIFs, videos, collectibles, virtual avatars, game skins, music, etc.) using blockchain, which is like a digital public ledger that proves ownership. This is the same blockchain system that is used in cryptocurrencies.
Collecting (buying or selling) NFTs is like buying an artwork but instead of owning the physical item, you get a digital form with a unique identification code and metadata containing information about the digital item and is stored alongside it.
Some would say they can view the images online for free and even screenshot or download them. So, why pay a price for something they could easily get online?
One word: ownership. You can screenshot and download it, but you can never own the original because NFTs contain built-in authentication that serves as proof of ownership.
If an artist mint his music, digital artwork, or video as an NFT, he can prove that he owns it because each NFT is distinct and traceable. It’s like a digital signature of an artist that can never be forged or removed.
If you are a buyer, think of NFTs as digital receipts. Or perhaps, a deed of sale. Like when you bought something from a physical store and you receive a tape receipt as proof of your purchase.
The idea of NFTs receives differing opinions. Some are not sold on the idea of putting artworks on metaverse or owning a digital form instead of a physical form. But there are a growing number of artists and collectors who are getting into NFTs.
Some artists look at it as a unique opportunity to monetize their arts. They no longer rely on galleries or auction houses to sell their art, instead, they can sell them directly as NFTs.
In addition, the NFTs are programmed to take a percentage of the sales back to the artists every time their arts find a new owner. Unlike when the physical art is sold, artists get royalties for every time their NFT is sold. They can’t be cheated out since the blockchain has metadata.
So, how do we go into NFTs?
Alfred and Karl shared that one needs a digital wallet where one can store NFTs and cryptocurrencies. They told me they use MetaMask, so that’s what I downloaded.
Then, one needs some cryptocurrencies like Ether. You can buy using credit card on Coinbase, Kraken, eToro, and even PayPal.
So, once you have a wallet and some funds, you can start browsing the NFT markets, such as Rarible, Foundation, and OpenSea.io, which is where I browse because that’s what the Bored Punks recommended. Here, you can buy or sell NFTs. Just keep in mind that each transaction needs gas fee (I simply call it service charge to make it easier for me).
Should we engage in NFTs?
It depends.
Alfred and Karl cautioned that NFTs are risky. Yes, it could be easy money, but you could also lose big time if one is not careful.
Unlike stocks which are driven by economic indicators, NFTs are quite personal. The value of an NFT is based on whether someone wants to buy it, and how much that person is willing to pay for it.
You can resell it higher or lesser than you paid for, or you may not be able to sell it at all, depending on someone else’s whims.
Also, there are capital gains taxes to think about, although the IRS has not yet ruled what NFTs are considered for tax purposes. But Bear in mind that the cryptocurrencies may also be taxed.
Some look at it as a fad that would dissipate anytime, a bubble waiting to pop, while others look at it as a new way of collecting, buying, and selling arts. We don’t know for sure since it is still new.
Since NFT is still an unchartered territory, it is best to err on the side of caution when dealing with NFTs. While it is largely based on personal decisions, approach it as an investment. Do research, ask questions from knowledgeable people, and understand the risks before plunging deep.
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