Gm everyone, there has been a lot going on in the NFT industry as a whole, so sometimes it’s best to go back to your roots. So today, we aren’t talking dollars and cents, we are talking theory. One of the most common questions around NFTs is “Where’s the Value?”. This is a complicated question and doesn’t really have a defined answer because everyone is here for different reasons.

I’m definitely not an expert but I quickly wanted to share my reasoning for the “value” behind digital assets. This story starts back on Jan. 1 of this year. GameStop stock was trading at $20 a share and actually losing money year over year with declining gross profits. During the course of the month a simple Reddit group of robinhood traders orchestrated one of the greatest calculated short squeezes our markets have ever seen.

The dynamics of a short squeeze are complicated and not relative for the narrative but in short, the mission was if everyone buys the stock, the price will go up. From Jan 1 to Jan 26 the price of GME rose exponentially peaking at almost $500 bucks a share. Instantly this “common man” group of retail traders created an enormous amount of wealth for people essentially from buying nothing. These traders weren’t buying GameStop stock because of the fundamentals, some buyers at the time had never purchased their first stock. By end of January, 28% if Americans had bought GME stock, mostly just to see if the price will go up.

So why did I just bring up that story? For me, the WSB phenomenon proved the power of the internet and the value of networks. People underestimate the fact that over 4 billion people have access to an internet connection and can instantly communicate with anyone across the globe. So this led me to more research about this concept of “digital value”.

Enters Metcalfe’s Law: Simply put, it says that the value of a communications network is proportional to the square of the number of its users. The law is simple; but when you apply it to real world examples, it really opened my mind to a whole new perspective. For example: take 2 companies like MySpace and Facebook. During the early 2000’s MySpace was the premier social platform but for some reason the value today is 0. The reason you’re not on MySpace is because all of your friends are on Facebook. So thinking in simple terms: the value of Facebook is theoretically tied to its existing network. Think about this: How many Tangible products does Facebook sell? Hmm not many...But why is it valued as a $930 billion dollar company. This concept of Value for FB doesn’t stem from physical assets, it was slowly generated from users on the network that they have built up overtime. (In perspective they have 2.9 billion active users a month)

I’m not a doctorate and I only research for fun but this concept of “digital value” is what drove me into the NFT industry. From my point of view, NFTs provide the ability to turn an expense into an asset and the more people that realize the potential value of that asset will help build on top of that asset. Thus the bigger the network of of people in this asset ecosystem could potentially create exponential value for that asset.

Again I’m not a Financial Advisor, I’m a simple guy and try to view this industry in a simple way because there is a lot of FOMO and a lot of noise. So take the time to research what network do you want to be apart of? What network will be around 3,5,10 years from now? Imagine what the potential value of that network can be?