The Implications of NFTs for Creators
04 Apr 2021
3 min read
For those that have not heard of NFTs before: It stands for Non Fungible Tokens and they have gotten some attention recently, when a jpeg image got sold for USD70M.
In essence, an NFT is a token or a "digital document" that is created on the blockchain and verifies securely the owner of even a digital asset. Now, the first ever Twitter post by Jack Dorsey, the video showing Michael Jordan's last game can actually be sold as an NFT and there will only be one digital Original.
It matters, because NFTs open up a huge secondary market for people to trade things that weren't tradeable before.
This is also the reason why a jpeg can sell for such a huge amount, because all of a sudden, it is not replicable anymore and only one person holds custody over the original.
If you want to learn more about NFTs - this is a really good podcast about NFTs from the folks of a16z.
I get quite excited about NFTs and here is why :
A possible viable business model for artists
With turning creations into NFTs, artists, musicians and performers get the power to track their creations and earn a royalty when their creation changes ownership. This takes out the middlemen (brokers, art curators etc.) who typically gain most from transactions, and it gives back power and the majority of royalties to the artist.
If NFTs turn out to be a viable business model for the creative world, this would be groundbreaking. We would see the Renaissance Era flourish again, where people actively pursued careers in the Arts and earn a salary enough to live on.
A new category of value and ownership
With NFTs, a secondary trading market similar to the contemporary art market emerges. Digital items are now unique and distinct, hence increasing the value of the item as it changes its owners. Why would someone pay USD70M for a jpeg? Well, you essentially earn bragging rights and increase your social status. It seems to attract the superrich as it allows them to differentiate themselves from their neighbors. But even for us peasants, we think we would never be willing to pay for an NFT? Well, I am sure we would be willing to pay for ownership of things that have meaning to us like the first ever played concert of our favorite band or the photo of a place where we spent a romantic vacation.
NFTs allows us to seek ownership on virtually anything really, not only physical or digital goods, but also moments and other intangibles and it becomes a market so long as there are at least two people desiring to own the same asset.
Community-based Ownership
Speaking about two people wanting to own the same asset, NFTs give rise to fragmented ownership. Similar to stocks in a company, NFTs can also be dvided and people can just own a fraction of a certain asset. I would totally pay for a fraction of an NFT on a Banksy art piece.
This is pretty cool, because it allows for diversified and community-based ownership and artists can create a much deeper relationship with their fandom or in this case even shareholders.
What really excites me about NFTs is the way of how it makes a transaction more fluid, canceling out the middlemen and at the same time giving creators more control and power over their art and I cannot wait to see how the trend of NFTs evolve.
Having dabbled a bit in it, I am also really happy to have turned one of the images of my Faces of The World collection into an NFT If you are interested in buying, you can head here. Hehe.
It matters, because NFTs open up a huge secondary market for people to trade things that weren't tradeable before.
This is also the reason why a jpeg can sell for such a huge amount, because all of a sudden, it is not replicable anymore and only one person holds custody over the original.
If you want to learn more about NFTs - this is a really good podcast about NFTs from the folks of a16z.
I get quite excited about NFTs and here is why :
A possible viable business model for artists
With turning creations into NFTs, artists, musicians and performers get the power to track their creations and earn a royalty when their creation changes ownership. This takes out the middlemen (brokers, art curators etc.) who typically gain most from transactions, and it gives back power and the majority of royalties to the artist.
If NFTs turn out to be a viable business model for the creative world, this would be groundbreaking. We would see the Renaissance Era flourish again, where people actively pursued careers in the Arts and earn a salary enough to live on.
A new category of value and ownership
With NFTs, a secondary trading market similar to the contemporary art market emerges. Digital items are now unique and distinct, hence increasing the value of the item as it changes its owners. Why would someone pay USD70M for a jpeg? Well, you essentially earn bragging rights and increase your social status. It seems to attract the superrich as it allows them to differentiate themselves from their neighbors. But even for us peasants, we think we would never be willing to pay for an NFT? Well, I am sure we would be willing to pay for ownership of things that have meaning to us like the first ever played concert of our favorite band or the photo of a place where we spent a romantic vacation.
NFTs allows us to seek ownership on virtually anything really, not only physical or digital goods, but also moments and other intangibles and it becomes a market so long as there are at least two people desiring to own the same asset.
Community-based Ownership
Speaking about two people wanting to own the same asset, NFTs give rise to fragmented ownership. Similar to stocks in a company, NFTs can also be dvided and people can just own a fraction of a certain asset. I would totally pay for a fraction of an NFT on a Banksy art piece.
This is pretty cool, because it allows for diversified and community-based ownership and artists can create a much deeper relationship with their fandom or in this case even shareholders.
What really excites me about NFTs is the way of how it makes a transaction more fluid, canceling out the middlemen and at the same time giving creators more control and power over their art and I cannot wait to see how the trend of NFTs evolve.
Having dabbled a bit in it, I am also really happy to have turned one of the images of my Faces of The World collection into an NFT If you are interested in buying, you can head here. Hehe.