This my not-at-all-hot, hot take of the day: NFTs are stupid.
While non-fungible tokens are enjoying a moment in the sun and many consumer brands are looking to get a piece of a market that has suddenly seen some eye-popping investments, I think everyone in the business of hotels should be happy to hear that they provide something of real, tangible value at a period when people are trying to make money doing anything but that.
If you'll excuse my curmudgeonly nature on this, I'd just like to dive a little bit deeper on NFTs and why they are, once again, remarkably stupid. I'm sure by now we've all seen stories like this one about how someone jumped on NFTs, sold a bit of code and made a huge sum with relatively little effort. It's all definitely very eye-catching, but the questions it always begs are: Who is making these investments and what exactly are they getting?
To tackle the latter question first, it's shockingly little. Say you buy an NFT of an image, some people investing in the space still don't even realize that you're not actually buying the image or — more importantly — any piece of the copyright of that image. You're buying a bit of code that points you to a place online where that image is stored. And there is absolutely no guarantee that image will be stored there indefinitely. So in essence you're buying the idea of something you like, including somewhat fittingly, a picture of a trash can where you might as well be putting that money.
And to answer the first question last, well, that should be kind of wealthy. These people sinking obscene amounts of money into things of no discernible value are largely those who are already holding significant wealth.
I report quite a bit here on technology in the hotel industry, and I often hear from industry thought leaders why it's important to invest in things that are markers of true change instead of trends or fads. If this isn't the most obvious example of something that is currently a trend but destined for the trash heap of time, I don't know what is. By the way, I'll sell you an NFT of a picture of said trash heap for significantly less than $250,000.
So, what does all of this have to do with the hotel industry? Well, most directly, we're now at a point that brands like Marriott International's loyalty program Bonvoy is dabbling in NFTs. This is all well and good, and obviously in line with how most consumer brands are treating the space. Simple digital collectibles that if forgotten in a few years, no one really suffers any real harm.
But I think the more important aspect of all this is just the mentality behind all of it. Sooner or later, this house of cards will come crashing down, at least in terms of the NFTs drawing major investment figures. And when that happens, those folks with a lot of money burning a hole in their pocket will look at other places to spend. Ultra-luxury travel seems to me much more appealing, and real, than sinking cash into the idea of a photo on the internet.
And last thing before I go, anticipating some complaints about this, none of this is an objection to the underlying blockchain technology that serves as the backbones of NFTs, especially as blockchain and cryptocurrency increasingly find a place in the travel ecosystem. That's a new technology that has a tangible benefit to business people and not some sort of image-backed Ponzi scheme.
Let me know what you think on Twitter, LinkedIn or via email.
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