📺 SotN #35: NFT MANIA! Are NFTs the Future of Art? Nifty Gateway Founders Griffin and Duncan

all right welcome everyone to another episode of state of the nation we're super excited about this we're going to dive deep into nfts which is super timely because we just had mark cuban on who is giving us the bullish case for nfts uh here's what we do every week at two o'clock on tuesdays we talk about what's happening we've related to the big picture stuff and then we drop some insights and action items for you so it comes out on youtube live and then also on the podcast david

before we get to nfts well actually maybe you could tease this article tease this uh episode yeah episode i'm hearing myself in the background so i gotta shut that down but tease this episode for us what are we going to talk about yeah so uh nfts are the hot topic right and the thing the cool thing about nfts is how much possible surface area there is right we have we have uh you know the crypto punks which are a lot of very similar nfts and there's like one set of them but then there's uh other kinds of nfts which are um

lots like high labor high energy like costly uh to produce nfts that are really really i would call them luxurious nfts art digital art like high quality art nfts and these are different kinds of products right and nfts can almost do anything but that's that's what we're going to be talking about on this specific episode of banquet state of the nation is high quality art nfts because that is what an uh nifty gateway really excels at um so if you guys uh the audience will likely have heard of

people uh people dropping these massive drops on nifty gateway rac one of my favorite musicians uh dropping nfts on uh nifty gateway and like they're fundamentally different than some of the the crypto punks or euler beats or crypto kitties types of nfts they're they're specifically they're extremely rare and they're hard to produce right like you know art is hard to produce and that's kind of the nfts that you see on nifty gateway and so it's a different end of the spectrum that we're going to explore on this state of the nation all right awesome man let's talk about

what's new david you want to talk about what just happened this morning because like i'm still wrapping my my my head around what just happened yeah and the reason why nfts are in the cycle is people like mark cuban think that they're awesome right there's a ton of people that don't really care about crypto don't really care about bitcoin don't really care about ether like they don't really care about the new monies of the world but um there there is this world of people that really care about digital art right digital art um

and and natively scarce art and so that's that's that's pretty cool all right so this is almost turning into like nft week you know where we're doing some articles on nfts we're talking about nfts with cuba and now we're talking about nfts with nifty gateway and we've got some articles coming out this week too so stay tuned to the bankless program to check that out david we've also got some stuff going on in clubhouse so what is clubhouse and what are we experimenting with on that yeah clubhouse is this new social media app

and it's a drop in what they call it a drop in chat room which is which is pretty fantastic um and and what that means is that uh there are these rooms that can be created and anyone can hop in and start listening to the conversations there's different ways to moderate these rooms some people are speaking some people can't speak um but there is it's i really like this quote from naval where podcasting is like the studio album but clubhouse is the live performance the live show uh and so ryan and i and the bankless nation are trying to get into

clubhouse and so if you guys want if you guys are clubhouse members you can follow both ryan and i on clubhouse trustless state then my normal twitter handle twitter handle and then ryan sean adams ryan ryan's twitter handle is ryan s adams his clubhouse handle is ryan sean adams so make sure you you follow the right uh ryan sean adams there um but i i i think this is going to be a great community generation tool that we're going to leverage yeah absolutely man all right well we're going to get to the episode of course i got to ask you the question but before we do that a special shout out to

lattice we're doing a lot with uh security hardware wallet security ever since we talked about hugh carp oh is that your lattice that's where your shot is look at that big big screen the big screen is cool because it allows you to double check a transaction a crypto transaction before you send it uh so lattices are back in stock we'll include a link to the show notes pick one of these up if you are interested in doubling down on your crypto security david now let me ask you the question i ask at the start of every one of these

state of the nations what is the state of the nation today the state of the nation is collecting we are collecting things right uh there was a tweet that went out not too long ago where uh uh d5 people and cryptocurrency people are all about wealth and uh and nifty people nft people are all about status and nfts are the the the meme is that nfts are about like status signaling right signaling that you have these cool nfts and people like to signal their status and nfts are

a way to express that desire to have status right um i have plants and those are kind of my unique nfts things that i like to signal that i think that's your status that's my status that is my plan yeah i thought it was and uh digital art and nfts are a way to for people to convey status and people like to collect them so this week in the state in the bankless state of the nation we are collecting all right awesome man well we're gonna get right to that but before we bring on duncan and griffin to talk about nft uh

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your grocery store or the coffee at your coffee shop go to monolith.xyz to sign up and get your monolith visa card today all right guys we just had mark cuban on this morning he gave us the bull case for nfts now we're going to talk about how they actually come to market how it gets done nfts are absolutely going to explode in popularity this year we've got duncan and griffin who are the co-founders of nifty gateway this is a marketplace for nfts in particular art nfts most

noticeably as david said in the intro mainstream artists are starting to use this beeple is one rac uh you know uh fantastic musician also released there duncan griffin guys how are you doing are you bullish nfts or what i don't know is the hope of catholic uh yeah oh yeah thanks for having us on guys delighted to be here dude we gotta ask about that background like what what's going on in that background is this an nfd it looks awesome yes yes you you nailed it coincidentally it is

an nft uh this is a way to express my pain so this is an nft called last stand of the nation state which originally sold on the primary market for 40 it was an open edition it was open for 24 hours and i bought 10 of them and then i gave away seven to my family and friends to like spread the good word of nfts and now they're trading at twenty thousand dollars each so oh my goodness wow i'm going to be living with a lifetime of pain on this one when did you do that when did you first like buy that and give it out yeah in october yeah and the artist who made it is named slime sunday and he's an incredibly

talented artist he's one of the best artists that we work with and he you know he just came into the nfc medium and just absolutely knocked it out of the park so i think this is an nft that people will still be talking about 20 30 years from now maybe even 100 years from now and i will be living with regret the entire time thinking about what could have been so you know there's a lot of ingredients here where like we can resonate with the early bitcoin story where like we were talking before we started recording where bitcoin would not be what it was today if a lot of early people didn't give bitcoins away and there were a lot of

early people that gave bitcoins away not knowing and or not thinking that the number would go up the value would go up and the similarity between this story and i've heard other stories of this nature similar to nfts the reason the the fact that these stories are similar makes me bullish right it's like well we know that this pattern exists we're seeing it we see it we saw it play out with bitcoin and now we're seeing it play out with nfts you don't even need to like really be bullish on digital art to understand and put all the pieces together that like these same patterns

are existing both with nfts that we saw with bitcoin yeah totally you see it all the time like with bitcoin everybody's like wow the bitcoin the price of bitcoin is so high i guess it's a little too high to buy and then two years later it's like you know 10 times as high as it was then and i mean most of my network isn't bitcoin too and you see the exact same thing with nfts like they're scarce and they'll always be scarce and i gave away a lot to spread the word of nifty gateway just three or four months ago and i think i must have given away almost a hundred thousand dollars worth of nfts maybe even 300 000 now and it's just crazy to think about that's

what's crazy is um you know bitcoin pizza was a long time ago right yeah everyone remembers that story like 2012 or something um but what you're talking about has just now happened in the last like four months like it feels like this these are this is nft's moment it's about to it's about to blow up in a big way and you've all that appreciation you're talking about that was just since october i mean guys can we start here though because some people to be honest still don't get it like they don't understand nfts maybe maybe duncan in your words how do you explain nfts

why are they a thing absolutely yeah um i totally understand honestly it took me a while to grasp the concept as well i think it takes everyone a while to graph grasp the concept but if i just had to explain them really simply basically what i say would say is like nfts are digital items you can truly own you know like we there are lots of examples of of digital items it's like a fortnight skin for example but if my fortnite account goes away or if it were for night the game shuts down like that item disappears forever that's a really

weird experience for me because like i'm used to say buying a pair of nike shoes imagine if you buy a pair of nike shoes and then nike shuts down and your shoes disappear that just doesn't make any sense that's not how like we we view the stuff we own because nfts are based on a blockchain that's like permissionless and decentralized for the first time it means that you know whoever made the nft could shut down or completely disappear but the nft still exists which is actually a crazy important concept for us because that's as humans that's how we understand ownership like i wouldn't pay so much for a pair of nike shoes if

nike's shutting down met those shoes go away and it's partly why digital items could like never really be valuable beforehand but nfts have allowed that to happen for the first time um and that's that's really what i think the bigger picture is here duncan can i ask you a question because um some people who are kind of critics of nfts have told me that hey but here's the reality guys like users don't care they're still buying fortnite skins for a lot of money like like billions of dollars a year and fortnite is completely centralized fortnite can

inflate the the value of skins there's no no concept of scarcity outside of like the what the game studio explores do users really care about having blockchain based uh your property settlement layer that enforces scarcity are they just gonna just go on to a centralized platform not really care look it really depends honestly you know like if i'm a fortnite gamer i'll buy a skin for 10 bucks 20 bucks whatever it makes my character look cool if i'm buying up a work of art for a million dollars like yeah 100 i care

and you know it's actually it's really very interesting this is a very little known fact but there are competitors to nifty gateway that are essentially centralized versions of digital art ownership where they'll basically issue you a certificate of authenticity for like a work of digital art but it only exists on their platform those those platforms all failed none of them really broke out you know the idea didn't catch on at all for precisely the reason that i was talking about our collectors were our collectors said like well i i can't you know spend so much

money on a digital item when your guy's platform going away means that digital item will just disappear and that's why it took a decentralized truly permissionless system like blockchain to make digital artwork um and you know it's it's really exciting we we've seen this sort of like happen slowly and now it's everyone is figuring this out all at once that's really exciting for us to see it's just very very cool and that reminds me of a article that um i i read recently about the spectrum behind nfts and that i really want to

we were going to talk about this at the uh towards the end of this live stream but i want to kind of get into that now since it's topical there's a there's a different uh spectrum of trustlessness with nfts and this comes down to where the where the art is actually hosted right you can put everything you want onto ethereum but the bigger the data is the more expensive it is and nfts are media and sometimes gifs can be multiple multiple megabytes large and if you get to be larger than a single block on ethereum you can't put it on ethereum right uh

and so there's a spectrum here of like how unchained some of these this art is and so maybe you guys can talk about how you think about uh the nfts on nifty gateway and like do you guys have aspirations to try and be a totally like self-sovereign on chain like a trustless centrist resistant uh nft platform or how do you guys think about about this industry and do people even care about this conversation look 100 i think people care and 100 this is like what we're what we're

moving towards and we're actively we're actually like you know rebuilding our our minting and our deployment system right now the goal is like if nifty gateway shuts down then the art lives on forever period um that's why it's so important to build on top of a blockchain that like is going to live on forever i think you know like ethereum because like if your blockchain shuts down then your nft shuts down no question and then you know our our updated system is going to have as much information about the work of art on chain as as is

possible you're right you really you can't store image files on chain some of the some of these artworks are 200 megabytes it's it's simply impossible to put those on a blockchain but what you can do is you can you can store a hash that you know provides like an immutable way to check that a provided image file is the correct image file for a you know for a particular nft and then what we're going to do is we're going to give the artist the ability to like to take control and to upload their own image url if nifty gateway shuts down you know there's a number of

different decentralized file storage solutions we're just going to say like okay we're going to let people put images wherever they want because you're right that is the that is sort of the difficult part that you have to navigate with nft art is you can't put a 100 megabyte file on the blockchain that's that's just simply impossible so you do have to you know get creative when it comes to making it truly permissionless and like living on forever but absolutely that's our that's our goal that's our that's our north star with the nfts we create i think the nft ecosystem over the past few years

has really figured out ways to to make this information better and to put more information on chain to make the nfts themselves more survivable and i think eventually excuse me eventually we'll see people start to to like really care about that as they realize that this does have an impact on the value you know like putting the name of the artist on chain is important like putting the putting the edition number et cetera et cetera like you know people as the market matures more people will wake up to that so with nfts okay like it comes with a

file like a media file one megabyte half a megabyte 30 megabytes and so the thesis is that you know maybe the centralized hosting database that hosts that information goes down but there's still an nft with a hash that provably links to that file type right so the file type goes through a hashing algorithm out comes a hash that hash is very very small this is how blockchain works digital signatures and then that hash makes its way to the nft and that's what you own and so the media file can

circulate as any other file does on the internet except it's the hash that can verify that this hash goes with this piece of digital art and again it's with nfts this kind i think this is kind of hard for a typical the newbies to get in and get their minds around is like the art isn't scarce it's the ownership of the art that's scarce and that and so the art can be on any any and everyone's computer but that doesn't mean you own it you own the certificate you own the legitimacy um and we could even go into

the conversation of something like this decentralized storage how does decentralized storage fit into this conversation yeah well i think decentralized sorry go ahead yeah one thing i want to highlight there is like a lot of people think this this sort of like owning a certificate of authenticity concept is is new to nfts but it's actually been common in the physical art world for almost 100 years now where you know marcel duchamp he sold a he sold a work of art that was just a commercially produced urinal to make a perfect physical reproduction

all you have to go do is buy the same urinal but that's still like a a very valuable work it's held in a few different muse dms the difference is the authenticity and like this kind of thing is very common in the the physical art world nfts are just taking this concept that has existed and mainstreaming it and bringing it to a much larger audience so i think a lot of people don't really understand a lot of people who are skeptical of nfts have not spent you know a ton of time in the the physical fine art world which isn't that surprising because it's a it can be kind of a very niche world but yeah this

concept of sort of owning the owning the authentic one despite the fact that there are perfect reproductions out there that's like that's been around for a long time so yeah i just wanted to highlight that because i think a lot of people don't really i think they miss that when they talk about nfts and i think rac had a really good tweet on this too he was like the concept is polarizing but like of course it is some people care about owning nfts and other people don't the people who do care are gonna pay hundreds of thousands of dollars for an nft or maybe they'll pay twenty thousand dollars for an nft that

i gave away seven of or something um but you know the people who don't care people who don't care don't want one so like they think it's stupid but it doesn't matter like if half the world thinks it's stupid and half the world's willing to pay a million dollars for it it'll be worth a million dollars and that's kind of why the concept is polarizing but we're also just seeing just insane growth you know i mean the growth in the nft space over the last three weeks you know between top shot between the numbers we're seeing between all the nft platforms it's just something that like it does remind me the early days of bitcoin

because it you know to the early observers it almost doesn't make sense like it's mind-boggling to see they always believed in the concept but when these things hit at the scale of the internet like they take off like crazy and that's just where nfts are at right now and you know it's crazy to be a part of it's funny it goes back to a conversation david and i were having uh actually earlier today where he was like hey at first i was kind of uh bearish on nfts but then the market proved me wrong because like the ultimate validation of any idea is the open and free market and there is no there the the most open and free market in the

world is defined right so the fact that nfts are going for these amounts of money doesn't matter what you think like somebody's paying for them so you can no longer deny that there's value here because what sets value for anything whether it's stock or gold or eth or bitcoin it is what the market is willing to pay i want to get back to this question because this kind of came up in our uh mark cuban conversation too which is like something that you were saying duncan and maybe griffin you can riff off of two which is like the platform that the nft is issued on actually

matters and this is interesting because uh we were talking with with cuban about hey like mainstreaming nfts and he brought up flow right and what it's doing with um with with collect uh with collectibles nba top shops like it it kind of strikes me and you guys tell me but like if you're doing you know five dollar ten dollar sort of sports cards right like maybe you're fine having that in a in an essentially managed um you know solution basically chain uh that

doesn't have the decentralization credible neutrality and like property rights uh guarantees that something like ethereum has but if you're doing something with uh you know million dollar art pieces plus then you have to have the strongest settlement guarantees is that kind of what you guys were were talking about and if that's the case will we uh will we see basically the big amounts of capital and the high value nfts on something like ethereum where you know we'll see lower value

smaller economic transactions on all of these these centralized like side chains how do you see this this shaping up and is that mental model uh accurate i i personally think it's accurate i mean that's that's my thesis we i mean we choose to release our our nfts on ethereum largely for the reasons that you've outlined you know it's it's very credibly neutral it's extremely decentralized it's truly permissionless and uh you know if you if you have an asset that is worth a lot of money as as

some of these nfts are now those attributes become really really important and certainly i i think that that would definitely be a factor in my mind where if i'm spending a millions of dollars on an nft i would really want it to be on a truly permissionless decentralized network like ethereum as opposed to some of the other you know as opposed to some of the other chains out there that that would definitely be a really important factor in in my decision making um yeah i do think you know like it might take a while for the market to figure that out

and the thing about decentralization right it's like it's the sort of thing that that uh doesn't matter until it does so sometimes it takes that event where it matters before people wake up and realize they're like oh crap i i really want my nfts on like a truly permissionless network so you know they're that that's kind of the way i i think about it and yeah we it might take a while for people to figure that out as it has in the past with other like you know with other decentralized applications yeah you don't know that robin hood is centralized until they pause your like

game stop trading right like griffin what would you add to that yeah exactly i would totally add to that and then what i would say is i think people don't realize this but ethereum is scaling like it is happening and it has such a lead like i'm highly confident ethereum's gonna win in the end you know it has all the network effects we've seen before and to me it seems like a no-brainer and we're you know we're releasing a new minting system on ethereum where we'll be able to cut down our gas cost to like less than one percent of what they currently are and we'll be able to make nfts on ethereum for like cheaper than they are

on flow or wax or any of the other competing blockchains and that tech is happening you know it's all getting built so right and ethereum like has never compromised on like the core values of decentralization and permissionlessness and in my opinion like it's by far the best store of value and i think duncan's right the market's gonna wake up to that uh you know and it'll just happen slowly then all at once which we see all the time do you know that's what's funny david uh should we get into like explaining nifty gateway because we haven't yet or should we go down this

track of layer two what do you wanna do i think nifty gateway first because then we then we can ask about how we come to cut the gas cost down by 99 percent because that that that was huge i really want to get into that but first let's talk about nifty gateway and how it differentiates itself from other nft platforms right because nifty gateways is quite unique the the nfts you find on nifty gateway are not the same kind of entities you would find elsewhere so what is nifty gateway and and what are the unique uh characteristics that it brings to the table

yeah that's a great question i can talk about nifty nifty gateway yeah okay nice pulling up the website so duncan and i started nifty gateway about two years ago um and when we when we begun our mission was all about accessibility right like we wanted to build a um we wanted to build a website where people anyone could access nfts that was the idea that's why we called it nifty gateway you know like buying nfts before was a very difficult process especially on ethereum you had to get a metamask wallet you had to uh

you know load ethereum into that wallet from after buying it on an exchange and it was very very difficult so one of the core tenants of nifty gateway has always been accessibility just making it really really easy yeah there's last stand in the nation state god damn it making it really easy for someone for anyone to buy an nft and then custody it and that was all built on top of ethereum so the original product was actually a credit card purchasing portal where we let other people buy nifties from other projects with a credit card but then we realized the real demand is like taking nft's mainstream it's finding people who are like already

famous in the world outside of nfts and making it really really easy that for them to launch nfts to their audience and as well as market it and that's kind of like nifty gateway in its current form you want to talk about that a little bit duncan yeah for sure so we we got acquired by gemini and that that gave us access to technology that we didn't have before um and that that sort of let us realize our our full vision which was which was twofold the first part of the vision is that you never have to be onboarded into cryptocurrency to to sign up and start trading and the

cool thing thing that we find is like it's a really good you know entry point into into crypto it's it's i mean we literally called it nifty gateway where people are interacting with the blockchain without even realizing it and then slowly they pick up that knowledge and they get more and more curious and they're sort of onboarded into the the way that like blockchains work without even realizing it which we think is really really powerful so that's 1081. you can sign up you can buy nfts you can sell nfts and you never have to be onboarded into cryptocurrency which just makes it so much easier for a person to get started

102 is all about you know emphasizing creators and like people who are making nfts that we think are really really strong so there's a huge curational aspect to this um you know ryan you were talking earlier about the platform that you release nfts on mattering a lot of the nft platforms including nifty gateway have a pretty strong brand behind them so when we put an artist on our platform we're basically endorsing their work we're saying like hey this we think this artist is going places where we're really proud to offer the work

it's a similar value proposition as as top art galleries have with the artists they they present so that's really aspect number two where we curate we really build a lot of excitement we we put a ton of effort into marketing every single artist that we release with and you know the end result of that is i think collectors are are comfortable buying from us because they know a nifty gateway endorsed artist is like is going places they have a strong career and yeah so we sort of play a similar role to the role that galleries play in the physical art world

except we play it at a much larger scale so sometimes we call ourselves like an art gallery at the scale of an internet the scale of the internet so it's really those two things it's really easy to access for new people and then there's like a curational element where we select artists we think are awesome and and endorse their work and i will add on to that sorry no go ahead yeah just quick question our tokens are nfts on nifty gateway fractional can you participate in a fractional nft if you if you can't buy all fifteen thousand dollars of a token

can you get a piece of one not on nifty gateway no but other people have uh other people have created fractionalized services and you know all the nfts on nifty gateway are erc 721s and can easily be withdrawn and turned into a fractional ownership people for example this is a really cool project when he sold you know his every days as one of ones and they all went for about a hundred thousand dollars a hundred thousand dollars each which is a huge event in the nft world the buyer of those took withdrew all 20 of them and has

fractionalized them into something called a v20 which is now tradable as an erc20 token on uniswap and it's just like an insanely cool project because you can get ownership of like maybe the most important drop in the history of crypto art although it's also interesting like just last thursday we had an artist mad dog jones sell four million dollars in a single five minute open edition window which like past people's primary market and then we have grimes coming up on sunday which you know yeah i mean we'll see what the numbers look like we're upgrading our servers because it's just

going to be an absolute bonanza so we'll see new records are getting broken like every day yeah just for the record grime we're talking about elon musk's wife right yeah yeah elon musk has a name of by herself she's a fantastic artist and she's also elon musk's wife like wow yeah i wonder if i i wonder if he's going to be pumping this a little bit yeah i wonder too i wonder what elon thinks about nfts like we don't really know yet but i feel like he would love it it's practically made for elon yeah elon loves memes and that's a great play