Ian Rogers remembers the days when you couldn't simply say "go to my website." First, you had to explain what the internet was and how it worked. Then you had to install a TCP/IP stack, a modem, and a web browser. But Rogers looks back at these moments fondly because it reminds him of how technology can move from science fiction to mainstream. And this is kind of how he views non-fungible tokens (NFTs) right now: Nearing mainstream. NFTs are digital files such as art, video, audio, and other files stored on blockchain, which is the digital ledger technology that powers cryptocurrencies like Bitcoin (BTC -0.71%). Some NFTs have already sold for millions of dollars.
Rogers spent 20 years of his career bringing digital music to the masses, first with Winamp then Yahoo!, Beats, and Apple. Then Rogers served as chief digital officer with the luxury goods company LVMH, where he spent five years working with brands including Louis Vuitton, Dior, Sephora, and Hennessy. Now, Rogers is the chief experience officer at the digital hardware wallet company Ledger, which helps people secure their digital assets. I caught up with Rogers to discuss the rise of NFTs, the sustainability of the market, and how people should should think about NFTs in terms of investing.
Bram Berkowitz: NFTs have really taken off. Do you think this is a direct result of the recent surge in Bitcoin and other cryptocurrencies, or the acceleration of digital trends during the pandemic?
Ian Rogers: As we live more and more of our lives at a distance, living off of Postmates, Netflix, Zoom [Video Communications], and Amazon Prime, is it any wonder we are turning into digital collectors? There is a new world of critical digital assets, and it's not just about speculating on cryptocurrencies. Having unique digital objects has a wide variety of uses, including NFTs. NFTs give artists and fans a way to connect digitally. There's a sense of ownership there that you don't get with streaming music. Streaming music is incredibly convenient and has grown to a $16 billion industry, but vinyl sales have continued to grow at the same time.
The internet has allowed the music business to break away from one-size-fits-all, enabling fans to connect with artists in whatever way suits them. NFTs give another way for fans to express love, be patrons, and show off their collections, alongside vinyl, merchandise, and VIP experiences. Like vinyl, NFTs won't be for everyone but they will certainly have a place for many music fans. Also, since they are potentially valuable digital assets which you can lose or have stolen, they need protection, which is where Ledger comes in.
Berkowitz: Do you see the NFT market being sustainable long term? Are NBA Top Shot moments and digital artwork just the new trading cards and artwork for new generations that grew up in the digital world? Or is there more to it?
Rogers: NFTs are definitely here to stay. I think we will see a gold rush, then a lull, then a steady climb to them becoming so much a part of our life that we expect to get a digital good when we buy anything physical.
Berkowitz: What advice do you have for people investing in NFTs? Are some crypto assets better investments right now than others? Is it all about scarcity or are there other trends you've seen?
Rogers: There's a mantra in the crypto community: "Do your own research." Like any other type of digital asset, before buying an NFT, you should learn how to store it and keep it safe, preferably on a hardware wallet device. My personal advice is not to follow FOMO (fear of missing out) and only invest in things you understand and have a personal conviction about. My personal feeling is that the overall market cap of this market will increase, but the value will be spread across an increasing number of artists and collectibles.
Berkowitz: What should NFT investors be watching? Are there certain events that would make this market more sustainable long term, or tell you that it's the real deal and not just a phase?
Rogers: Basic human urges are at play here -- we love to collect, we love to share, we have an innate desire to show we are part of tribes. We lead digital lives. So doing these things digitally is inevitable now that it's technically possible. Creative people take canvases and use them to create art. As more people enter the space, quality will increase, creativity will ensue. As long as people are interested in collecting, people will create. As famously said by the French poet Victor Hugo, "There is nothing more powerful than an idea whose time has come." Digital assets are technically possible and therefore their time has come.