Back when everyone wanted to buy and trade crypto, my friend Evgeny started a marketplace for NFT photography called Sloika. This, to me, felt like an obviously good idea, both in general and for him specifically. Evgeny had previously cofounded the photo company 500px, and so Sloika was initially conceived of as 500px, but for web3. This is a good story.

I have collected a number of photos via Sloika and, in general, I continue to regularly collect NFTs. Of course today, relatively few people want to trade and collect NFTs. The market is largely dead. What is obvious is that there was a giant NFT bubble and it popped in 2022, along with some other asset bubbles.

But does this necessarily mean that NFTs and NFT art are bad ideas?

When I think of bubbles I often think of something that Fred Wilson wrote on his blog. His argument was that bubbles tend to be directionally right; it's the magnitude that we get wrong. A good example of this is the dot com bubble. Yes, it was a massive bubble. But it was directionally right. The internet was going to matter -- a lot it turns out.

Even if we go back to "tulip mania" during the Dutch Golden Age -- which is often brought up as the pinnacle of dumb bubbles -- one could argue that it was still directionally right. Today, tulips remain the most sold flower in the US. So we still love them; we just got a little too excited back in the 17the century.

When it comes to NFT art, I like to think in terms of these questions:

• Will humans continue to appreciate art? (Seems obvious.)

• Will humans continue to want to collect things? (This is arguably a fundamental human instinct.)

• Will provenance and authenticity continue to matter in art? (Blockchain technologies are really good at this.)

Perhaps the only question that remains is whether people will want to collect digital art. But even this feels fairly obvious to me. The challenge, I think, is that the display side of the market needs to be more built out. Because alongside the instinct to collect things is the instinct to display them. That's why NFTs initially took off as profile pics on social media.

So as a start, I think more, better, and cheaper displays would be a big help. There's something very different about projecting an NFT in your living room versus having it live in a crypto wallet on your phone or computer. You need to really experience it, just as you would a conventional piece of art. And like all art, context matters.

I haven't yet invested in a dedicated NFT display, but I plan to do that in the near future. And I'm looking forward to displaying my collection of NFTs, including the one at the top of this post. It's a drone shot of the west side of Toronto in the middle of winter, and it was gifted to me by Evgeny. Thank you for that. It's an honor to have it as part of my art collection.

Photo: Six Bling (via SuperRare)

Matt Levine's latest Money Stuff column does a good job explaining why a lot of smart people are trying to figure out a market-making model for homes (see companies such as Opendoor):

People want to apply the market-making model to homes. This makes sense. Buying or selling a home is a long slow uncertain annoying process. The value of immediacy is high, especially for a seller. If you decide to sell your house and go to a website and spend 10 minutes filling out a form and then someone wires you cash for the value of your house, that is much much much better than hiring a broker and listing the house and holding open houses and so forth. You’d be willing to pay a market maker a lot for that immediacy. (By selling your house to the market maker at a discount.) And if the market maker is good at acquiring houses, then it will have a lot of inventory, which will make it a good seller of houses. If you want to buy a house, you will naturally go to the market maker’s website, because it’s where the houses are.

Levine also explains why a market-making model is that much more difficult for homes compared to things like stocks. In a slowing/slumping housing market, it's pretty easy to lose money as a market maker. (That is, unless you can somehow accurately predict that a slump is coming.)

Last month, Opendoor lost money on 42% of its home transactions. This is a result of them buying homes from people when prices were X and then selling these homes many months later when prices were less than X.

However, I'm not so sure that this has to be an existential problem. Opendoor's primary value proposition is instant liquidity for homeowners. And this value proposition is at its strongest when the market is in fact slumping. Because the alternative -- selling with a broker -- is less attractive.

So the current environment may eventually turn out to be a boon for Opendoor. Of course, we won't know for a number of months.

Full disclosure: I am long $OPEN. And yes, it is painful right now.

Back in 2006, Paul Graham penned an essay about how to be Silicon Valley. Since then, it seems like every city on the planet has tried to replicate the successes of the Valley. At the time, his argument was pretty simple. Geography used to be destiny when it came to cities. New York City, for example, is arguably what it is today because of its geography and its deep harbor, which created a natural competitive advantage compared to other east coast cities such as Boston and Philadelphia. But this, he argues, has become far less relevant. Now, you can create a great city pretty much anywhere. So what are the necessary ingredients?

Paul argued that you only really need two kinds of people to create a technology hub: rich people and nerds. You need people creating new things and you need rich people to fund those new ideas. That's it. So in theory, if you could just dump a bunch of these kinds of people in one place -- Nunavut? -- you'd perhaps get unicorns coming out the other end. He goes on to say that Miami is a perfect example of a city that has lots of the former, but very few of the latter. It has lots of rich people, but, in his words, it's not the kind of place that nerds like. So it is/was not a good startup city. (I'm a nerd and I like Miami.)

But the year is now 2021 and a global pandemic seems to be helping to change this dynamic. Every tech entrepreneur and/or investor now seems to want to move to either Austin or Miami. To that end, SoftBank recently announced that it has earmarked $100 million for startups that are based in Miami or that plan to be based in Miami in the near future. It's perhaps a good testament to the momentum that seems to be developing around the startup scene in the city, which is something that their mayor has been incredibly vocal about.

But here's something to consider. Was Paul right about the two requisite ingredients for a successful startup hub? And if so, does Miami now have enough nerds? Maybe this recent influx of people was just what it was missing.

Photo by Cody Board on Unsplash