I was reading the 2021 NFT Year in Review from 1confirmation and was struck by the overall size of the NFT market today.

According to them,

The total market cap of NFTs is ~$31.4B, just ~1.36% of the total market cap of  cryptocurrency ($2.3 trillion). 

For me, this is a data point that I choose to use as validation for my standard quip about NFTs.

“NFTs are both overhyped…and here to say”

me

If you are either new to NFTs are relatively deep in them, it’s a good report because they give us a framework for how to think about NFTs, including

• cultural collectibles
• visual art
• profile pic projects
• gaming
• other

I realize the term “NFT” isn’t going anywhere, but I am starting to think it isn’t descriptive enough for the value it provides.

While, yes, in each of the above instances there’s a certain type of value for the owner (financial, sentimental, emotional, etc.), there’s also another type of value for the owner as she relates to others (aside from the market/financial aspect, of course).

That other value is the value of a social signal.

An NFT, in any of the categories above is also a type of social signal, just like owning a Tesla, solar panels, or a Black Lives Matter t-shirt, is.

It projects something about you to others.

It’s like a badge that your digital identity wears, like wearing a jersey, a hat, or a lapel pin might.

For some, it will be a turn-off, the way some respond to MAGA hats.

For others, it will be a turn-on, the way some respond to MAGA hats.

The point is, with NFTs as badges, we’ll all be able to fine-slice our communities of interest based on the perspective we want to take at a time.

It will be like database-sorting that Match.com might do, but on a much more robust scale.

“Jarvis, give me all of the people in Stockholm who have a badge for the New York Knicks, Bitcoin, fans of John Grisham, and vegans who play Call of Duty more than 3 times a month.”

With NFTs, you’ll be recognized as a member of a group with values and aligned economic incentives.

The 1confirmation guys say this about the PFP projects, but I think it extends to all NFTs

By owning a PFP and using it as a representation of digital identity, anyone can  belong to a community and spread that community to the world.

The combination of aligned  incentives and shared beliefs can be an incredibly powerful force and when you compare that  with the old way of building a brand top down by a corporate controlled entity that projects a  brand onto consumers, the benefits are clear. 

NFTs as badges will provide a new way for us to build relationships, trust, and global tribes in a digital-first world.