The Weekend Edition is pulled from the daily Stansberry Digest.

Today, I want to talk about our undying love for beautiful things once again...

In our March 6 Weekend Edition, I discussed humans' inherent love for unproductive objects like gold, art, and other "baubles." I contrasted my own view on this topic with thoughts from legendary investor Warren Buffett...

In his 2011 letter to Berkshire Hathaway (BRK-B) shareholders, Buffett declared that gold is no better than tulips. The only reason to own either of them, in Buffett's mind, is to hope you can sell them to somebody else at a higher price.

That's the "greater fool theory"... Fools buy solely in hopes of offloading to a greater fool at a profit at some point in the future.

I explained why I think Buffett misunderstands both gold and human nature. Gold's unproductive nature coupled with its immutable esthetic beauty is precisely why it has been an excellent store of value for 5,000 years.

To make my point, I quoted longshoreman philosopher Eric Hoffer...

Man is a luxury-loving animal. Take away play, fancies, and luxuries, and you will turn man into a dull, sluggish creature, barely energetic enough to obtain a bare subsistence. A society becomes stagnant when its people are too rational or too serious to be tempted by baubles.

In other words, gold is a long-recognized store of value not merely because it's chemically inert and divisible... It's an ideal store of value because it's irresistibly beautiful and desirable to humans.

Let's take a different cue from Hoffer's quote this weekend...

It's one that will lead us to the most unprecedented moment in modern auction history... the three best ways to preserve wealth for centuries... and other unexpected places.

In the quote above, note how Hoffer mentions "play" in the same breath with "fancies and luxuries" and later "baubles."

Like our desire for those tangible items, we also have an innate desire for "play" that's as old as humanity itself.

I bet prehistoric humans played with and admired gold they found (perhaps in riverbeds) before they ever started digging it up and making things with it or using it as currency or a store of value.

Regardless of whether it predates culture or not, play is fundamental to our lives...

Without it, we wouldn't have progressed throughout history. As author Diane Ackerman wrote in her 1999 book, Deep Play...

Every element of the human saga requires play. We evolved through play. Our culture thrives on play.

Play continues to touch the financial element of the human saga in other forms right up to the present moment...

You see, today, we're at play with a brand-new financial medium...

It could potentially become an enduring store of value – and possibly a new form of money. And its original designer purposely imbued it with the divisibility and scarcity of gold.

Of course, I'm talking about bitcoin. It's the most well-known, valuable, and widely held cryptocurrency in the world.

About 18.6 million bitcoin exist in the world today. There will never be more than 21 million... And it will take until 2140 for us to reach that number (unlike the trillions of new U.S. dollars printed over the past year).

Buffett considers bitcoin an unproductive asset. And similar to what he said about gold (and tulips), here's what Buffett said in February 2020 about bitcoin and cryptocurrencies...

You can't do anything with it except sell it to somebody else.

But maybe bitcoin isn't the financial mistake Buffett makes it out to be...

The crypto world is one giant financial playground today – and that's a good thing. New cryptos come and go all the time. We're exploring and pushing out the boundaries and seeing where it'll take us for its own sake.

It's the old hacker mentality of sitting down in front of a computer for the pure joy of finding out what you can do with it... Play is how we get to know everything from gold to computers, but it's also how we get to know ourselves.

The cryptocurrency revolution has taken an even more playful turn recently...

I'm talking about the surge in interest for non-fungible tokens ("NFTs").

NFTs are cryptographic tokens with unique identification codes that distinguish them from other digital objects. They're often used to make digital tokens from tangible items like artwork or even real estate.

Creating unique digital tokens to represent tangible assets allows those assets to be bought and sold efficiently... with the transaction recorded on an anonymous public blockchain ledger. Like with cryptocurrencies, this process establishes ownership and transactional security without the need for a trusted third party.

Before I go any further, I need to be clear... I'm not sure I know enough about NFTs to have any kind of opinion about them. I'd never even heard of them until this month.

But I know enough to say one thing today...

I may not know exactly what they are, how they work, or how their future will look, but I'm still confident that we are in the midst of a full-blown NFT mania.

The latest and most insane sign of this happened about two weeks ago...

A digital artist known as "Beeple" (whose real name is Mike Winkelmann) sold one of his works – which again, exists only in digital form – for roughly $69 million in an online Christie's auction. Bidding started at $100 and lasted for two weeks.

The artwork – titled "Everydays – The First 5,000 Days" – is a digital collage of all the images that Beeple has posted online every day since 2007.

Twenty bidders took the price of the NFT all the way from $100 to $1 million in the first eight minutes. But not to be outdone, the final bidders were even crazier...

Bloomberg called it "unprecedented in modern auction history." In the last 10 minutes, the price jumped from $14 million to $35 million. And then, in the final seconds, it went to $50 million... $60 million... and finally, $60.25 million (plus an additional $9 million in commission for Christie's).

But Beeple isn't the only one scoring big in the NFT mania...

On February 19, artist Chris Torres sold a digital artwork called "Nyan Cat" for nearly $600,000.

The work is an NFT version of a somewhat crude digital drawing of a cat with a Pop-Tart body, flying with a rainbow behind it. This image has circulated around the Internet as a "meme" on social media for 10 years.

This NFT craze is about more than just digital art...

The band Kings of Leon released its latest album on March 3 as an NFT. It's offering three types of tokens that come with perks – like front-row concert seats for life and a limited-edition vinyl.

And Michael Levy, a 31-year-old financial analyst, has bought $175,000 worth of digital sports trading cards over the past six months. Today, these digital cards are reportedly now worth... sit down before you read this... $20 million.

None of the technology or digital trading of sports cards or artworks sounds crazy at all.

The part that makes it a true mania is the crazy prices being paid...

The $69 million sale of Beeple's latest piece makes it the third-most-expensive work by a still-living artist ever sold.

The most expensive is a metal rabbit made in 1986 by Jeff Koons... It sold for $91.1 million in May 2019. And in second place is a 1972 acrylic on canvas painting by David Hockney, which sold for $90.3 million in November 2018.

But Koons' and Hockney's works were sold by collectors... So the artists were paid nothing for these transactions. Beeple put his own piece up for sale at Christie's... So he just got a check for $60.25 million.

Meanwhile, a Van Gogh piece sold at Sotheby's for $16 million in October. And a Picasso painting sold at a Christie's London auction in June 2019 for $15.6 million.

If only they were NFTs and not merely masterworks by great artists of the past.

Plus, if anything, NFTs could make these pieces of art more attractive...

I've never spent big money on art, but I've bought and sold real estate and physical precious metals. The process is way too clunky for both...

In particular, the need for trusted third parties in real estate transactions – banks and title companies – is a major pain in the neck. And what's with taking a month or more to close a single transaction, like homebuying or selling?

Digital tokens recorded on cryptographically secure and immutable blockchains seems like a decent way to eliminate at least some of that friction. It could make these old-money stores of value more attractive to modern investors.

Learning what little I know about NFTs has piqued my curiosity about them, but it has also reminded me that fine art has served many wealthy people as a store of value for hundreds of years.

Unfortunately, most people who try to cash in on NFTs with nonsensical applications will fail...

That's how these things go. We humans aren't that efficient as a species. We make things up that fail all the time.

It's fine, though... because efficiency isn't everything, contrary to what many modern-minded folks would have you believe. And remember, we play with stuff like NFTs as much for its own sake – for fun – as to discover anything useful.

But overall, I have little doubt that NFTs have changed the art and real estate worlds permanently... And beyond that, I believe efforts to digitize gold are already changing the way it's traded and held.

(I've written a little bit about this gold angle in a new special report for Extreme Value subscribers. Find out how you can claim instant access here.)

So, as newfangled as they seem, maybe NFTs aren't really doing much more than putting old wine in new bottles. By that, I mean making it possible to trade, via digital token, the three old-money assets – land, gold, and art.

I'm still confident we're in a massive financial bubble, and I remain bearish overall on both stocks and bonds...

So I still like traditional stores of value for a portion of your capital today. That's why I continue to believe that you should own some gold, silver, and at least a little bit of bitcoin.

And it's highly unlikely that you'll catch me making any specific predictions about what technologies will be widely used to do anything whether it's one or 100 years from now...

Technology changes too fast and human nature changes too slow – if at all – for me to believe that we have any understanding of their impact today. That's true of the Internet (even though it's decades old), social media, cryptocurrencies, blockchain, and NFTs.

But being who and what we are as humans, I don't think that it matters...

We'll keep playing with them, having fun with them, and speculating financially with them. And maybe one day, they'll have more value to us than a $600,000 digital Pop-Tart-bodied cat... $20 million for slam-dunk highlights... or $69 million for 5,000 pictures over 14 years.

If we play long enough, we're bound to find some good use for these NFTs one day.

Good investing,

Dan Ferris

Editor's note: Big-name investors and institutions are flocking to bitcoin, taking it mainstream. At Stansberry Research, we believe the next phase of this cryptocurrency revolution will create even bigger opportunities to profit... And on Wednesday, March 31, we're revealing our resident crypto expert's biggest prediction of the year for the sector. Save your spot right here.