Non-fungible tokens (also known as NFT), bitcoins and cryptocurrency are growing digital assets used for electronic financial transactions and becoming a game-changer for people looking to cash in big online and off.
The new gold rush is becoming a virtual boom that many Black Americans and other people of color are getting involved in, according to a report from The Washington Post.
Bitcoins and Blockchains
Cryptocurrencies, commonly referred to as crypto, are offering opportunities for minorities usually disadvantaged through traditional financial systems, the Black Information Network reported. With hardships in the traditional finance landscape (ranging from bias from banks, venture capitalists and other institutions) it’s not always an easy feat for Black people to get a proper foothold for building wealth.
“When you have been locked out of the system when you haven’t had pathways to create generational wealth, you see this as an opportunity,” Cleve Mesidor, founder of the National Policy Network of Women of Color in Blockchain, told the Post. “You’re going to tell your community about it and you’re going to find ways to optimally use it to ensure you cannot just build wealth for your community, but build wealth for the next generation.”
The nitty-gritty of crypto is based on operating on “blockchain technology, a decentralized network spread over many computers, according to one description.
“Crypto is the value of the currency based on supply and collective demand, and not backed by the federal government or items of value — except stablecoins. Thousands of digital currencies have sprouted up since Bitcoin — perhaps the most well-known cryptocurrency — was created in 2009,” per one definition.
NFTs are built around the same type of programming as cryptocurrency, like Bitcoin or Ethereum, according to Forbes.
According to https://ethereum.org, NFTs are also tokens that people could use to represent ownership of unique items. They let the creators “tokenise” items like art, collectibles or real estate.
Physical money and cryptocurrencies could be sold or swapped between these items, according to https://youthfulinvestor.com/. This defines them as “fungible” as they have equal value.
The article added that NFTs, however, are different. Each holding a digital signature which makes it “impossible for or equivalent to NFTs to be transferred [hence, non-fungible].”
What’s the hype over NFTs? For one, buyers can own the original object via an NFT. From built-in authentication to evidence of ownership, obtaining digital rights to these items is practically “more valued by collectors than the object itself,” per the article.
Mike Winklemann, a famous digital artist, known as “Beeple,” did as such when he produced a composition of 5,000 dailies to create perhaps the most popular NFT of this time: “Every day is: The 1st 5,000 days.”
An NFT of this work sold for $69 million at the auction house, Christie’s. The sale put him “among the top three most valuable living artists,” according to the auction house.
NFT at the DBT
Mack Hendricks, the co-founder of Detroit Black Tech (DBT), created an NFT-based ticket for his group’s upcoming Detroit Black Tech conference.
Founded in 2018, DBT (technophile members looking to build up the Detroit community of Black individuals) is hosting a virtual software developer conference, Hacking with the Homies Developer Conference, February 25-26. One of the conference topics will include NFTs.
Henricks spoke to the Michigan Chronicle about creating a digital ticket for the conference made up entirely of NFTs, which he said has been a “topic of interest” for the members ranging between 500 and 1,000 people based on the platform being used for the group.
More information on the conference can be found at https://detroitblacktech.org/.
“People want to know are you going to talk about NFTs,” Hendricks, 47, said. “We were really trying to figure out how to really tackle this space.”
Hendricks said that it was a “dope” process to create the ticket out of NFTs that he pulled from pictures of last year’s conference and added a filter on top, which he said is creative and original. “You’re buying a unique piece of something originally. This is my personal first entry into the market and we’re kind of learning as we go.”
Hendricks said that anybody can get into NFTs and that it is essentially creating content for online.
“If you have interesting content, you can make an NFT and if somebody finds that content interesting, they will buy it,” Hendricks said, adding that the people don’t have to wait to get in this market. “The market itself will dictate what is interesting content. Black folks in particular need to be in position and understand how it works so if something they create becomes very popular, they can get compensated properly.”
Hendricks said that after creating the content, it needs to be marketed so sales could be made.
“Even though you create this content, if nobody knows about it, you’re not going to get money,” Hendricks said. “I think, to me, it’s the great equalizer when it comes to creating unique pieces of work.”
Hendricks said newcomers need to have a digital wallet, a crypto wallet, that they could easily download from the Play Store app. They have to add actual money to the wallet that would be converted to crypto.
“Unlike U.S. dollars they go up and down and fluctuate a lot,” he said adding that he puts a little more into his crypto wallet to account for any fluctuations.”
Down the line, Hendricks wants to get his financial profile to 50 percent (or at least 30 percent) crypto around retirement time in the next 20 years or so.
“I’m fearful like everybody else — any swing in the market scares me,” Hendricks said, adding that as he gets older, he hopes the market stabilizes and NFTs become more normal. “[Hopefully] 20 years down the line when I’m ready to retire.”
Darrick Hamilton, an economics professor at the New School, says that Americans who already have the most to lose are risking more by throwing themselves at this volatile market, according to Black Information Network.
“It is true the traditional financial system has not provided access, and frankly exploited Black people,” Hamilton explains. “But the remedy isn’t to turn to another vulnerable system, however well-intended it may or may not be. The remedy is a public sector that ensures they have access in an equitable way.”
