For Xue, there is a degree of frustration that the swift rise and sharp correction in the NFT market have clouded commentators’ views of this innovation. “A clear misconception is that NFTs are about investing to make a quick profit that is many multiples of the original investment. This is definitely not true,” he said.

Weeding out the scams

Rather, Xue is keen to separate the “scam” projects from those with intrinsic value. “There is a misconception that because NFTs--like cryptocurrencies--create scarcity. This has a value of its own,” he explained. The reality is that the technology is more a facilitator. “Yet when looking at the market as a whole, the market treats crypto and NFTs in the same way as it treats tech companies.”

He points to a correlation between the value of leading tech companies quoted on the Nasdaq exchange with the fundamentals of the NFT and crypto world. Nevertheless, Xue recognises that “it is a little bit more volatile, and risk[ier] than tech stock, but the shape of the technical analysis curve looks similar.” Hence, he suggested that investors should take a longer-term view of the technology rather than forming a view at the current moment when markets are under pressure.

More than pictures

Ultimately, NFT technology is more than being an offshoot of the art market. “A widely held misconception is that this is just about pictures that could be copied,” as NFT technology works to ensure value is captured in many areas. He pointed to the likes of Starbucks, Porsche, Gucci and Adobe, which are getting involved in this space.

“What is an NFT? Fundamentally, it gives one-time access, and we see how this works with software,” the Lux NFT Club co-founder said. He pointed to software companies that have changed their business model from offering one-and-done purchases to using recurring (and more lucrative) subscription models. Potentially this idea could be brought to the world of physical products as through the tools behind the NFT concept.

Community of enthusiasts

The Lux NFT Club describes itself as “a community of NFT enthusiasts as well as collectors and artists.” Along with his fellow co-founder Jil Haberstig, the club organises events and has recorded a series of podcasts.

Xue says that in these early days, most interest in the club is from “professional people who have an interest in technology, in blockchain, in NFT, but are not necessarily working in that space or have a close connection with that area.”

He said the motivation to start the club was “to fill a gap locally”, to give an opportunity for people to explore the possibilities. The goal is also to make international connections in this global business. The onus is on those working with this technology to turn its reputation around.

This article first appeared in the .