1/ If you believe that physical collectibles are good investments, it is hard not to believe in digital collectibles (NFTs)

So, how can we know which NFTs are good investments? Here are some of my amateur thoughts on the subject

Thread inspired by @garyvee latest insta post

2/ Quick disclaimer: I am not as deep into the NFT market as many others.

I find it interesting. I enjoy following. But the only NFTs I own are some @ensdomains

I am not your industry expert here. Just enjoy the topic.

3/ As an outsider, the only strategy I can think of here is to find parallels and comps to the physical world.

What type of physical collectibles are popular and what commonalities do they share?

If we can decode this, we may be able to figure out which NFTs will succeed.

4/ The two images in Gary's post here are a Charizard from @Pokemon and a MJ card from Fleer.

5/ Observation #1

The *creator* is more important than the *creation*

6/ Anyone can make a graphic of Charizard or MJ.

The fact that the company behind Pokémon and Fleer were the creators here are (in my opinion) what gives them value.

7/ Taking this a step further, we can look at paintings by Picasso. Some of his paintings were average in terms of today's metrics of "quality"

Because of the *creator*, every painting from Picasso costs a premium.

8/ Takeaways for NFTs?

Think about *who* is making the NFT as much as *what* the NFT is itself.

9/ Observation #2: Nostalgia Matters

Both MJ and Charizard cards have nostalgia on their side. From a psychological level, nostalgia is usually born in our formative years.

10/ Whether you were 6 year old watching Pokémon on Saturday morning or a teenager trying to copy MJ's fadeaway, we all have these psychological connections to the collectibles.

11/ Takeaway for NFTs?

Since NFTs are so new, there really isn't many nostalgic assets yet. If someone like Pokémon starts to tokenize their collectibles or Atari tokenizes their games, it may bridge this gap.

12/ What are some NFTs that will have a nostalgic effect in the future? CryptoKitties? CryptoPunks? Hard to tell, but neither of these currently seem to be mainstream winners yet.

13/ Observation #3: Scarcity matters, yes, but stories matter more.

Scarcity is pretty obvious so I won't go too far into why it may increase the value of an asset. What is talked about less is the *story* behind the asset.

14/ On October 5th, a buyer purchased a painting from the anonymous street artist named Banksy for $1.4M.

Seconds later, the painting was shredded.

15/ While the painting was "destroyed", the story behind the painting grew even stronger. Though the new owner is not selling the shredded painting, it is assumed the new artwork is more valuable than the original.

16/ While Bitcoin is not an NFT, it has definitely become a digital collectible. In addition to being first to market, Bitcoin benefits from the story behind the asset. An anonymous cypherpunk who disappeared/died. How much better of a story can you get?

17/ One recently beautiful attempt at creating a story was done when @DirSchmidt + @DontBuyMeme joined forces to create the world's first NFT experiment called Rug Pull

18/ Twelve NFTs were put up for auction. One of them contains Bitcoin. Nobody knows which one. The owner of each NFT has a chance to break it apart and delve inside the code.

19/ NFT Takeaway?

Yea, your NFT is scarce. But does it have a story behind it? If not, it may just be another NFT.