Crypto Trend: NFTs | Kristina Parro

Updated: 3 days ago



On December 25, 2021, the home of the L.A. Lakers— formerly known as the Staples Center— will be replaced by a new name: the Crypto.com Arena.


With that, it’s official: cryptocurrency has taken the world by storm.


For those still shaky on what the hullabaloo is all about: crypto is a decentralized, blockchain-based currency. Bitcoin (BTC) is widely considered to be the original cryptocurrency and has seen tremendous growth in popularity since its inception in 2009. Early investors have seen their gains go from sub-penny (BTC first started trading around $0.0008) to tens of thousands of dollars (BTC had a recent high of $69,000). Those numbers alone may deter potential investors from hopping aboard the crypto train… many of whom think the train has already left the station.


But, in my opinion, we are just in the beginning stages of decentralized currency. There is potential for more wide-spread usage of cryptocurrency in the coming years. Some predict that it will be the future of our financial system.


While the following is my personal opinion and speculation, and is not financial advice, this blog post is designed to act as education so that you can make the most informed decisions regarding your finances. There are many resources out there regarding Bitcoin, Ethereum, alternative coins, and NFTs. I’d urge you to check them out. One of my favorite free sources to acquire information about investing and cryptocurrency is Investopedia.com.


After a brief discussion of the benefits of cryptocurrency, I will highlight a novel token in the crypto-verse that will soon become more mainstream, thanks in part to the company, GameStop: Non-Fungible Tokens, or NFTs.


What does it mean to be a decentralized currency?


One of the major components of our current financial system (at least, in the United States) involves centralized banking. A central bank is any financial institution that has been given privileged control over the production and distribution of a nation’s money supply. They also typically have a monopoly on the creation of new money.


Central banking is supposed to ensure economic and financial stability for their nation through monetary policy (ex. Interest rates, quantitative easing), control of inflation/deflation, management of volatility of the markets, and serving as a trusted party for actors in an economy to make transactions. The underlying theory behind centralized finance is that central banks protect the economy and will prevent a Great Depression-like event from occurring.


But, it increasingly seems as if the central banks have the power to print money, basically out of thin air, with no regard to how it will effect the economy long-term. With a simple change of some numbers on their computer, they can create “assets’ to back new money… and boom: unlimited money hack.


Since the start of the pandemic in the United States, citizens have seen the Federal Reserve’s money printer go haywire, pumping trillions of dollars into the economy with no signs of stopping. This was articulated at the 2021 Milken Institute Global Conference by Scott Minerd, CIO of Guggenheim Investments, who said, “For the time being, we’re addicted to [money printing]. There is no exit plan for the central banks.


The central banks are functioning in a role they were never designed to do. The role of the central banks was to provide marginal liquidity at the times of crisis and to withdraw it after the economy starts to stabilize and come back. But the central banks are now running the markets.”


The central banks are now RUNNING the markets. When the central banks run the markets, our economy is no longer free and fair.


This is where decentralized finance, commonly referred to as DeFi, comes into play. DeFi cuts out the middle man (central banks), so that market participants can trade freely and fairly, using technology that allows investors to deal directly with each other instead of operating from within a centralized exchange. This is possible due to blockchain technology.


What does it mean to be blockchain based?


A “blockchain” is a computer-based ledger for recording and sharing data related to asset transactions in a network. Each transaction makes up a “block,” representing the data from that transaction. As more transactions occur, these blocks are irreversibly linked together on a “chain.”


Blockchain technology is the behind-the-scenes infrastructure of crypto. It is like an electronic library that cant be hacked, changed, or cheated. Blockchain allows digital information to be distributed immediately, but never edited. It allows for financial transactions to happen peer-to-peer, eliminating the need for a “trusted third party.”


What is a NFT


NFT stands for non-fungible token, which is a unique, non-replaceable or interchangeable asset that lives on a blockchain like Ethereum. A NFT is a tool that allows us to record and utilize unique data on the blockchain and identify unique asset ownership. Ownership is 100% verified, through mathematical proofs.


How is this different than Bitcoin, Ethereum, or a dollar?


BTC, ETH, and a dollar are all fungible, or replaceable. If you and I both have a dollar (or 1 BTC, or 1 ETH), we can swap our dollars (or crypto) and it wouldn’t matter. Neither of us would lose out on value, because our dollars (or crypto) are both equal. NFTs are more like a limited edition baseball card. If you have #1/50 and someone else has #25/50, you wouldn’t want to trade with them, because your #1/50 baseball card is worth more due to its scarcity.


How can NFTs be used in the future of the economy?


Right now, crypto and NFTs are seen as a casino of sorts; a vehicle to bet and make money, rather than an investment in fundamentals. But, in my opinion, that is short-sighted.


In this blog post, we’ve established a need for decentralization and democracy in the financial sector. In the current system, the 0.00001% has most of the power… and is able to keep that power by rigging the game.


In a decentralized economy, the future of currency and finance may lie in NFTs. Remember, NFTs can be used to create verifiable digital uniqueness and scarcity, as well as validate ownership. This means, no more magical money creation. No more manipulation.


As of now, the costs to create and trade NFTs are high, which acts as a barrier to entry. This, however, will not be the case for long.

I believe that GameStop has partnered with Loopring (LRC) to create a free NFT wallet and marketplace— and that the launch is imminent. The possibilities are truly endless.


Disclaimer: This blog post details the opinions of the author, who owns securities in both GameStop (GME) and Loopring (LRC).


This article was written by Kristina Parro, an author, investor, entrepreneur, and independent researcher. Check out her personal website at KristinaParro.com. Follow her on instagram @kristinaparrowrites and @logosllc.

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