There is an ebb and flow when it comes to crypto hype.
Just like the value of bitcoin and etherium swing up and down, so does the hype, but that doesn’t mean that the crypto-world isn’t maturing or should be ignored.
It’s hard to get your head around what is going with all this crypto blockchain stuff because it’s so deeply rooted in technology, and many of the early adopters are from the fringe.
From a very high level, what is going on is that technology exists that allows you to create permanent, redundant encrypted records to the internet.
The latest is the use of Crypto to show ownership of digital and, yes, physical goods. I’ll break down what I’ve learned and what I see as the future of this technology and its impact on publishing.
The news has been full of some recent big sales on the primary and secondary market for digital goods associated with NFTs. Here are a few of the latest stories that have broken.
I got sucked into this world through some work I’m doing with a client to design an Instagram filter. On the call with the designer, he suggested I learn about Non-Fungible Tokens.
After over 20 hours of sitting in Clubhouse rooms, connecting with thought leaders and artists, this is what I’ve pulled together.
- This is the future
- Set aside your FOMO its early days, and there is a lot of pioneering
- Publishing, copyright, and intellectual property will be revolutionized
- There will be endless possibilities to monetize IP and create perpetual revenue streams
Let’s begin with what an NFT is and how it works. A Non-fungible Token is a digital identification with associated metadata that is saved to the blockchain. To simplify this further, think of this as a digital contract, and proof of ownership is preserved across the internet. It can’t be lost or destroyed because it is redundantly saved in parts across thousands of computers.
These contracts have existed for some time, but recently artists have been using digital tokens to create limited edition digital art and show ownership.
The CryptoPunks were an early NFT. A fixed set of 10,000 was launched in mid-2017 and became an inspiration for the ERC-721 standard. These retro graphics have sold for thousands of dollars.
Another example is Gods Unchained a free-to-play, turn-based competitive trading card game in which cards can be bought and sold on the OpenSea marketplace.
Players use their collection to build decks of cards and select a God to play with at each match’s start. On OpenSea, cards can be sold for a fixed price, auctioned, or sold in bundles.
The main area where this has been taking off is a fine art. There has been more digital art sold in the last two weeks than the previous five years.
Some believe this is a seminal moment that these works will be historically significant for digital art. Christie’s is facilitating the sale of digital works means there is interest from the mainstream art world.
How does this impact the independent creator?
The NFT provides an open standard for contracting and ownership that is agnostic to platforms and is established at creation. This will be a brave new world. Here are a few topics to keep an eye on.
Royalties and smart contracting
One exciting feature of an NFT smart contract is embedding a perpetual royalty. Imagine as a content creator you create a limited-edition ebook with illustrations that you sell for $100 and sell 100 copies. Cool, you just made $10,000, but NFTs allow you to embed an ongoing royalty, let’s say 10% for easy math.
If one buyer sells their copy in the secondary market for $500, you get another $50. Every time there is a transaction, you’ll get paid your percentage. This creates a situation where rare collectibles that sell in a secondary market benefit the original creator.
Markets are opening up and marry the NFT with community and gamification. A prominent example is NBA Top-shot, where you can buy, sell and trade NBA player cards.
A LeBron James Top-Shot has sold for over six figures. They will introduce augmented reality and fantasy sports elements to create an experience.
VeVe.me is a collectibles marketplace where you can buy pop culture collectibles and display them in an augmented reality showroom. There is also a resale market.
Niftygateway.com is an NFT marketplace for art and music with a resale market
Rarible.com is another platform for minting and selling NFTs.
Opensea.io is another marketplace where people resell NFTs. You can see details of transactions and market movements.
Imagine a near-future where, through augmented reality, digital collectibles can be seen in the actual world. Where people are showing off their one-of-a-kind or limited-edition digital art or playing songs, they have sole ownership of.
In publishing, how ownership and authenticity are tracked will change. Will, there still be piracy, of course, but there will also be piracy bots that will identify abusers.
Imagine that you produce a limited-edition anthology where all the contributors continue to get a royalty every time the editions change hands.
You may be concerned about the big tech and what types of information and control they have. The next generation of the web will be fundamentally different with data encryption in a decentralized data structure using machine learning and augmented reality.
Just like the internet moved from lifeless billboards to cloud computing and social networks, the evolution is to the tools that those on the bleeding edge are using. Right now, the market isn’t easily accessible. To play freely in this market, you need to be using cryptocurrency.
Is this a Hot Potato?
Could this be a bubble that leaves you holding an overpriced jpg?
Of course, that’s how collectible markets work. This is all speculative if you’re looking to profit from reselling and don’t see value in just owning the collectible.
Yes, some of these items will become culturally significant and will retain value. Others won’t.
What should a content creator be doing?
Think about how you can translate your intellectual property into a collectible that will have value in your community.
You’ll hear folks looking to take advantage of the hype. They will burn out and fade away. If you are looking to build an experience and lasting value around your creativity, then focus on building a community and how that community can tie their identity to your work.