Gary Vaynerchuk: 'The conversation is going to get very interesting when we hit an NFT winter'

Gary Vaynerchuk spoke about the potential of the NFT market specifically and the cryptocurrency industry generally at the Yahoo Finance-Decrypt "Crypto Goes Mainstream" special.

Video transcript

DAN ROBERTS: And up next, we're delighted to have Gary Vaynerchuk. Certainly knows a thing or two about everything happening in NFT land. Nice.

GARY VAYNERCHUK: Morning.

DAN ROBERTS: Welcome.

GARY VAYNERCHUK: Thank you.

DAN ROBERTS: So let's get right into it. I mean, there's so much to talk about. And you are a guy who likes to talk, just like me. We've talked to a few times recently. I mean, let's start with, why crypto? I mean, you're such a collector. There's really so many things you're known for. But when did you catch the crypto bug, which fair to say you now have kind of a full fledged case? When did it first cross your desk and you said, OK, I'm all in on this?

GARY VAYNERCHUK: There's a gentleman by the name of Aaron Batalion, was one of the co-founders of LivingSocial. He's a VC, really strong CTO. And in a hotel room at South by Southwest in 2015, or '14, I think '14 actually now thinking about the email I found recently, he and others explained Bitcoin. And it was like, so outer space. I was so confident in my ability of understanding consumer technology that I really even struggled with, man. This doesn't even click at all.

And I kind of dismissed it as because I don't love finance, I don't love financial arbitrage. I don't really understand basic financial concepts. So I kind of sat. Literally the next year at South by-- again because we used to jam and do this thing. He brought up Ethereum. And he's like, remember last year we talked about in this? Now look at this. And that one clicked because I understood the developers on top of it. At that point, I'd picked up on a little bit more. So it was really then, I bought a bunch of Eth for $0.06. And I was like, OK, this is something that's intriguing. Let me put it over here and keep an eye on it.

"CryptoKitties" came out the next year. That caught my attention. But I didn't go deep. But I was aware that something had happened where people collected something digital. And then it was last summer when I sat down, Fred Wilson, very successful VC, reached out and connected me to Roham, founder of Dapper Labs. And he showed me what NBA Top Shot was going to be in the fall. And that really caught my attention. And I was like, OK, this is starting to get really interesting.

But I was navigating VaynerX through COVID and I was busier than ever 15 hours a day operating my company. So I said in the winter during the holidays last December, I'll really do homework on this. I'll spend 50 hours. I'll really go there. Top Shot exploded in September, I missed my window to go crazy there. Then Kevin Rose, the founder of dig.com, really the face of Web 2.0 before social popped, said something in a conversation with me in December of we were talking about X-Men comics and Jordan rookies. And he's like, do you have a CryptoPunk? And I was like, what's that?

And that led me down a huge path, which culminated with in early January me saying, oh my God. This is here. Stood up. I know I'm off screen right now. Stood up, and said, oh my God. The same way I did in 1994 when I saw the internet and the same way that I decided that I had to go from being a wine retailer to a content social media executor because this YouTube Twitter thing I'm seeing on the face of what I saw on Friendster and Myspace was going to change the internet. So this was the third moment. And it was January when I had my eureka.

DAN ROBERTS: So it's interesting. I hadn't heard you say before that you first heard about Bitcoin, didn't really get it. Or it didn't really click. Then it was Ethereum. Now I have to ask, do you think of yourself as an Ethereum I might say maxi? That's a term in the industry, Ethereum maximalist. They say, forget Bitcoin. All the potential for business applications is Ethereum. Or have you now gone back and do you also own Bitcoin?

GARY VAYNERCHUK: I bought Bitcoin back then. So that did really well. No, I'm a big believer in and. I think one of the worst characteristics in the crypto landscape right now is people buying things and then all of their opinions are grounded in their own self financial interests. That's how you have a bad reputation. That's how you are not historically correct. This is going to be a game of and. Back to December, how I use it, I can't wait to go very deep into Solana this December holiday season to understand what I think in comparison to ImmutableX and layer 2 versus a Eth main net.

No, I think it's insane to think this is a zero sum game. I think that there will be many platforms, probably-- I have a much better understanding of the human psychology around NFTs than I do around the financial aspect of coins. So I don't, as you probably know, because I know you watch this space carefully, I don't talk a lot about Bitcoin or the alternative currencies because I really don't understand that game. I very much understand why people wear Nike's, Rolexes, by Mercedes-Benz, communication, human behavior. And that's why I'm so very focused on NFTs because I think they represent social communication in a way that other things come natural to me. And that's where my focus is.

DAN ROBERTS: Well, and really now, CryptoPunks' arguably becoming, some might say Bored Apes. I mean, pick your collection. The example of those highest tier in the NFT world. But that's going to keep changing. I mean--

GARY VAYNERCHUK: Yeah, and I think some-- look. My bet is that what I bet on, because I bought a bunch of CryptoPunks, and I believe it even more now watching this year play out, some things will be Tiffany's locked and loaded for hundreds of years. XCOPY, the artist, shows all the nuances of potentially becoming a Warhol, or a Banksy, or a Polack. So somebody's going to win that game.

Board Ape, VeeFriends, Cool Cats, I think a lot of those brands are going to play the brand game. So Supreme is hot for seven years. But it's hard to be hot for 50 years. So there's going to be a classics and there's going to be the hot brand. And there's a lot to think through. And I'm spending a lot of time on it.

DAN ROBERTS: Let's talk about VeeFriends you mentioned. That's your own collection launched pretty recently. And this is a series of hand drawings that you did yourself. They are characters that have alliterative names. And each one represents a kind of concept, whether it's in the workplace in daily life. And here we are, it's only been, what, barely a couple of months since they launched. Christie's has done a show with VeeFriends. They've sold for tons of money.

What do you say to the many skeptics out there? There's already enough NFT skeptics who they say, there, I own it. I right clicked, and I saved it. Now I own the NFT. No. And then even within the NFT world, if there are certain NFT believers, they might be skeptics about your specific collection. They look at the art, they say, this is at Christie's? What do you say to those folks?

GARY VAYNERCHUK: Nothing. I'm not overtly, and that's not audacious. It's I don't really understand the concept of trying to convince people to see the world the way you see it, which as you know, makes me an anomaly because that's where the world is at a high passion right now, convincing. I try to stay in conviction. I know that there's plenty of people that think I'm Walt Disney and I think there's people that think I'm a snake oil salesman. My plan is to execute and let the market and the truth win. And so I don't say anything. I'm actually incredibly empathetic to people that don't think my stuff's right.

Look. I mean, the first time we met, you wrote an article that's titled, "Is Gary V for Real?" Yeah. So I'm but I'm empathetic to it. I understand. I have a personality trait that for many people, especially in a quick snippet in an Instagram post, or a LinkedIn post, can really throw one off. I'm empathetic. I'm also incredibly aware of who I am and what I plan to do. And my plan with VeeFriends is to make Patient Panda as famous as Pikachu. It is to make Empathy Elephant as famous as Scooby-Doo.

And either I'm going to have the talent to do it, or I'm not. But that is what I'm up to. And if I'm successful, well then the NFTs and the art that's sold at Christie's was a steal. If I'm not successful, well then it will be Beanie Babies. There's a variable difference between it. And so I plan on not ruining my reputation with VeeFriends. And so I say nothing to them.

DAN ROBERTS: Let's ask the NFT skeptic question differently. Forget just your own collection. But there are a lot of people out there who still can't really wrap their minds around the NFT boom in general. And you say, look, they're non-fungible tokens. These are tokens. They're like cryptocurrencies, but they're not currencies. But they're on blockchain. And you can point to this and say, see? I own this. Now someone else can share it, they could tweet out a screenshot of it. Fine. But they don't own it. Only you own it and can move it. And still, it's just they hit a wall. What do you say to people, I'm sure you've had friends say, wait a minute, dude. I just don't get this stuff.

GARY VAYNERCHUK: Well through my friends, I usually say, remember when you were wrong about social media? Remember when you were wrong about the internet? Remember when you told me you would never trade in your Blackberry for an iPhone? I tell them all the things that we've done for the last 20 years where they said, no, and I said, maybe and they've been unbelievably wrong and have had to conform to the way the world worked out. That's what I say to my friends. What do I say to people that I'm randomly interacting with? The same thing that I answered my own collection on.

You've brought up twice, so it's obviously struck a chord with you and many others in this space. I can just right click it. I can go outside right now and take a picture of this hotel and say it's mine. I could. Many people do take a photo with a car like a Lamborghini and try to make the assumption that it's theirs.

DAN ROBERTS: Who would do that?

GARY VAYNERCHUK: Plenty of people do wear fake Rolexes. I understand the concept. Look, we've had 25 years of an internet where people don't own things digitally. We have a new invention, it's called a blockchain, where people do own things digitally. Every person that's watching this right now that is lucky enough to be alive in 15 years will own multiple things digitally. The end. And this behavior has been going on. People bought sheep on "Farmville" and Facebook a decade ago. Everybody who-- by the way, the winning argument--

DAN ROBERTS: You mean Meta.

GARY VAYNERCHUK: Yeah, meta. Thank you. The winning argument, by the way, over a cocktail is, and usually at this point I have no patience for this conversation in I want to get to other topics. But every acquaintance and friend wants to talk to me about it because it's a wild topic. I basically within the first five minutes ask them if their child has bought "Roblox," or "Minecraft" or "Fortnite" skins. The answer's yes. And the argument, or debate, or conversation ends pretty much within the first four to five minutes.

Our inherent need as human beings, as animals, to communicate with each other is extraordinary. Everybody I'm looking at right now and behind the camera is literally wearing the clothes they're wearing as a subconscious way to communicate to the world. The haircut. Everything we do is to communicate with each other as we inherently live more digital. Forget about the metaverse, "Ready Player One". We live in the metaverse now. People are in their screens constantly. Why does--

I had somebody who's obsessed with their personal brand, like shit on NFTs. And I asked them why they wanted a blue checkmark. That's not real. But of course it's real. It's status. It's communication. And so this is going to play out the same way that everybody said the internet was a fad. Here's where it's really interesting. This is a boring convo right now. Not you personally, the macro. The conversation's about to get very interesting when we hit an NFT winter because there's way too much short term greed and supply and demand issues. And when the whole market crashes and everybody says, see? I mean, I can't wait--

DAN ROBERTS: Which has already happened in a mini sense twice and everyone says, see? NFTs are dead. NFTs are dead.

GARY VAYNERCHUK: There's going to be a real one I think based on what I'm seeing. And Yahoo Finance is going to write, Are NFTs a Fad? Question mark, and the Journal, and the Times. And everybody's going to write the article. And that's when it's going to be interesting because the person on the other side is going to be like, Gary, look, look, the punks are now worth $30,000. They were $800,000. And I'm going to say, here. Look at this chart on Yahoo Finance that shows you Amazon's stock. And look what happened in 2000 March, April when the whole internet craze crashed.

Yes, everything got caught up in that undercurrent because, yes, greed, short term financial interest, overvalued everything. Short term behavior overvalued everything. It got washed. And this was the time to buy Amazon and eBay because those were real companies. I do believe firmly that 98% of the NFT projects right now's values will be less than that when it's all said and done. The problem is the 2% are going to be so much more extraordinarily high that one is required to do the homework to see the opportunity.

DAN ROBERTS: Well, and when you say that you do think a kind of NFT winter is coming and you talk about the prices for some of these, we've been focused on these NFTs that are either you share them, they're CryptoPunks, they're Bored Apes, they're for social status online, or they're artworks. But now we're seeing a ton of other use cases.

And I want to make sure I ask you, what do you think NFTs will be used for eventually? Some see them as a pass to an event. You're having a VeeFriends conference where you have to own a VeeFriends NFT. Others think it's going to be your login for some places, your proof of pass that you went to something. Is the sky the limit here? I mean, what do you think NFTs will be used for beyond just buying and sharing them and flipping them?

GARY VAYNERCHUK: Every contract, all of them. Buying a car, buying a home. It's a smart contract that is confirmed, and accepted, and transparent. It is the Holy Grail for humans. It's just that we're the fortunate humans that are here when it's being invented. It will be the mundane in 80 years. I think it's going to be used for everything. I would be flabbergasted. I don't like to make these kind of predictions because I could be wrong and I don't want to clip it and make fun of myself. But I would be stunned if not the majority of sporting event and concerts are NFTs, not just QR codes and paper tickets in 15 years. I would be flabbergasted.

And if you happen to go in 15 years to an NBA game and your ticket is an NFT and the Zion, LeBron, whoever of the day does something spectacular, you're literally in a place where that is an asset and you're selling it as you walk out of the arena. People are going to start actually going to do things just for the NFT with the chance that something will happen. We're collateralizing so much of our society. It's going to be incredibly fascinating once people start interacting with NFTs in the scenario that I just painted.

Similar to what's happening with QR codes right now. QR codes have become incredibly important in marketing because of COVID. Most restaurants are now forcing us, now the average 60-year-old knows how to use a QR code with their iPhone, which will now translate into other behaviors of the QR code. Once that happens with NFTs--

DAN ROBERTS: Well, so that's a perfect segue to what I want to make sure to ask, which is, when will that happen? We've been talking about convincing skeptics. What about onboarding people to something that still admittedly has a lot of friction. I mean, well you've got to go to an exchange, you've got to buy some Eth. Then you've got to use your MetaMask, or your Chrome browser wallet, or Rainbow. And you've got to pay with Eth on a different marketplace. Then you've got to know where it sits.

GARY VAYNERCHUK: Yeah, I mean, it's nerd shit.

DAN ROBERTS: A lot of people, it's just they say, this is too much.

GARY VAYNERCHUK: It's all going to happen in the background soon. Look, I'm just not passionate about it, meaning I don't-- back to the convincing thing, I'm not in a rush to get everybody to do this. I will continue to talk about what I believe will happen.

DAN ROBERTS: But will the tech get easier to use?

GARY VAYNERCHUK: Of course.

DAN ROBERTS: I mean, it has to.

GARY VAYNERCHUK: Yeah, I mean, I'm sure that's a leading question. Of course, that's what happens. Before Andreessen created Netscape Navigator, it was virtually impossible for any normal human being to get on the internet. People are very bad at history. They're like, this is too complicated. I'm like, today. I'm like, what about in 36 months? People are impatient, people stink at history, people don't understand pattern recognition, people don't understand the actual human behavior graph. People, people, people, people. This is why there are consistent people that win in these times. It's because they're curious, and they're humble enough to put in the work with the off chance that it's not worth their time.

For every time that I went deep on social, or deep on Web1, or now deep on this, there's been many times that I've gone down a path, internet of things, AR the first time that they were too early, that the 50 hours didn't result in immediate opportunities. And that's what you have to do. And most people are just inherently insecure to waste their valuable time that's not quite valuable. And they're more comfortable saying no to things like this. And that's just the way it is.

DAN ROBERTS: Gary, let's end on this one. We only have time for one more. We've been so focused on NFTs. You've really gone all in on them. But what else in crypto or in the crypto investing space interests you right now? Are you into DeFi protocols? Or are you thinking about different uses of other blockchains? What are you excited about beyond just the NFT boom?

GARY VAYNERCHUK: Nothing. I'm not. I'm very aware it's happening. My brother is. My friends are. I only like communication, and commerce, and-- I have a very specific thing I like, and I'm good at, and I'm comfortable with. I have never had passion around currency, even in the macro. I think so much of my professional success is predicated on my relationship with actual money. And so I'm aware of those things. But when you ask me the question to what I'm interested in or excited about, the answer is nothing.

DAN ROBERTS: So does that mean, to follow up on that, you're not advising people to buy crypto?

GARY VAYNERCHUK: I'm not. I'm not--

DAN ROBERTS: People are asking you.

GARY VAYNERCHUK: Ready for this?

DAN ROBERTS: You hold some crypto--

GARY VAYNERCHUK: Ready for this?

DAN ROBERTS: --but you're not out there selling it.

GARY VAYNERCHUK: I'm not advising anybody to buy an NFT. I could give a shit. I'm talking about my observations from a very selfless and selfish point of view, selfless that I believe people will benefit if they do their 50 hours of homework off the spark of this excitement. Selfish because I'm going to clip all these clips in nine years and be like, told you.

DAN ROBERTS: Right. Yeah. And I like saying, do your homework. I tell people the same thing. Do your homework please.

GARY VAYNERCHUK: Here's what I'm scared about. If this was 1995, I would be sitting here and saying, the internet's going to win. And guess what? I would have been right. What I'm petrified about is if this was 1997 and I said the internet's going to win and somebody bought $100,000 worth of pets.com stock. They would have lost their face. So that's what I'm saying here. NFTs are going to be here for the rest of everybody's life. And it's going to get more meaningful, not less. The buying an $18,000 llama with a taco in its mouth from an anonymous founder is high risk.

DAN ROBERTS: Good. Keep that in mind, everyone. Gary, thank you so much. Gary Vaynerchuk, always fun to talk to you.

GARY VAYNERCHUK: Thank you.

DAN ROBERTS: Appreciate it.

GARY VAYNERCHUK: Cheers.