Fun with Data - Who’s buying NFTs?
NFTs are an enigma to most everyday folks and even in the most elite technology circles definition vary considerably and we will not attempt to add our voice to such definitions, but we can at least give investors a bit of understanding as to what the NFT world looks like and potentially what purpose it serves, although the latter is the more difficult question to answer. Non-Fungible Tokens are a big business, and the platforms on which they are bought and sold have hundreds of thousands of registered and active participants, but it is difficult to gain insight into who these customers are and their motivation for involving themselves in this somewhat arcane world.
While one might assume that NFT traders are a sophisticated and erudite lot, living in full-floor penthouses high above major cities or sitting on the veranda of a beachside mansion in Bermuda, but that is not always the case. In fact the country that has the largest number of NFT users has a GNI/capita of only $7,040 but an NFT user penetration rate of 8.08%, far above the US penetration rate of 1.14%. That country is Thailand, where NFT virtual land sales can give Thailanders a chance to become owners of a piece of ‘virtual Bangkok’ (40m x 40m) for a mere $3 or where you can buy collectible cards from the Miss Universe Thailand pageant, the winner of which was given prizes in both cryptocurrencies and NFTs, all of this despite the Thai government’s ban on NFT trading.
Much of the interest in NFTs in Southeast Asia has come from Axie Infinity, a game developed in Vietnam that allows players to earn Smooth Love Potions (SLPs) the more they play the game, which can be converted into Etherium and sold, which became a way for serious gamers to put food on the table during COVID lockdowns, and the concept of digital tokens appreciating in value was a quick step toward NFTs, particularly when the value of early art-based NFTs soared, with collectibles and art generating almost 80% of NFT market value at the end of last year. We are not saying NFTs look like a get-rich-quick proposition to those in less wealthy countries as the inclusion of the US, Canada, and Germany in the top 10 debunks that concept, but one wonders why some would be willing to risk government wrath and potential financial loss unless there was the promise of a pot of gold at the end of the rainbow, although when you look at Figure 3, which shows the average ‘gas’ price (the fee paid to the platform for any transaction) on Ethereum, there are those who profit with relatively little risk in the NFT/crypto space..
Much of the interest in NFTs in Southeast Asia has come from Axie Infinity, a game developed in Vietnam that allows players to earn Smooth Love Potions (SLPs) the more they play the game, which can be converted into Etherium and sold, which became a way for serious gamers to put food on the table during COVID lockdowns, and the concept of digital tokens appreciating in value was a quick step toward NFTs, particularly when the value of early art-based NFTs soared, with collectibles and art generating almost 80% of NFT market value at the end of last year. We are not saying NFTs look like a get-rich-quick proposition to those in less wealthy countries as the inclusion of the US, Canada, and Germany in the top 10 debunks that concept, but one wonders why some would be willing to risk government wrath and potential financial loss unless there was the promise of a pot of gold at the end of the rainbow, although when you look at Figure 3, which shows the average ‘gas’ price (the fee paid to the platform for any transaction) on Ethereum, there are those who profit with relatively little risk in the NFT/crypto space..
Youngohm x NFT1 Art - Source: Techsauce, Rarible
Deep Talk - Gossip Dog 01 by Pavisa Meesrenon - Source: Prestige
Average Gas Price of Ethereum (Gwei) - Source: Non-Fungible Etherscan.io, cryptoslam.io
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