“It’s a bubble.” “It’s a money laundering scheme.” “It’s a fad.” I’ve heard it all. I’m here to tell you why that’s not the case. NFTs are here to stay.
Why NFTs Going Mainstream is Inevitable
Physical vs Virtual Reality
Ever heard of the simulation theory? It’s basically the concept that humans will progress to the point where virtual reality will be indistinguishable from physical reality, and our current reality is a virtual simulation of the past. But we can’t tell the difference because our programming is so well advanced beyond our understanding.
That theory exists because people are starting to realize the power of augmented reality. The future of tech lives through immersive experiences, and NFTs open the gateway for unique markets within those immersive experiences.
Take a look at Waze or Maps, for an easy example. You are physically driving down the road, observing your surrounding sights and sounds. You are experiencing the physical realm, but your digital GPS is what guides your journey.
More activities will start to look like an unfamiliar drive in the car, like digital tools immersed in human experiences. Just like NFTs.
Teaching an old dog new tricks
Why are we acting like this is something humans don’t already do? NFTs are just the digital manifestation of existing markets. It’s taking an old idea and building new infrastructure around it, or providing new tools to succeed.
NFTs allow artists to build a ninth slice of pizza. The pizza was already there, but there are now new ways to make pizza. How else could society fund an artist every time their work was bought and sold? Why shouldn’t collectors get new opportunities to make profitable transactions?
Now, that may sound like another niche exclusive market bubble that will boom and make a few people rich, then bust. Here’s why I think NFTs going mainstream is inevitable.
Content is king, NFTs help content
Digital content (though way too top-heavy imo) is one the most important industries in the world right now. It is the backbone of Facebook, Google (Youtube), Twitter, Apple, etc. The largest companies in the world are centered around content and data.
When you look at NFTs, they are more than an opportunity to trade high art to rich heads in Manhattan and LA. NFTs are a way to monetize all forms of content. Just this week, famous Youtuber Ethan Klein of H3 Podcast dropped a collection of NFTs linked to his most popular videos and memes on OpenSea.
Why is this significant? The future of the internet lies in scarcity. Think of the invite-only Clubhouse, or now David Dobrik’s invite-only Dispo app. Content is trending toward exclusion and decentralization more than ever before.
So when you see Kings of Leon dropping an album as an NFT, Twomad dropping an NFT of his man boob, and thousands of creators retroactively monetizing content through NFTs, you can start to picture a world where tokenized assets will complement any creator’s monetization strategy.
And why not? Artists have been short-handed for centuries. Historically, when an artist sells their work, it is no longer theirs. If that art piece spikes 10x over its original value in their lifetime, that artist doesn’t see an extra penny. The old-world art business model was like a founding developer selling their Uber stocks the day after building the code. Not a great move.
Musicians, on the other hand, have been cut out of their fair share since digital recordings first became available in the early 1900s. Back in those days, artists needed sound engineers to capture the sound, studios to fund the equipment, managers to connect them to the right studios, marketing teams to connect them to big radio stations, tour managers to book gigs with venues.
Now, musicians can build small internal teams and drop a platinum album. Emerging tech like AI is already disrupting music and art. Why should we act like these industries haven’t changed?
As digital content goes ↑ NFTs go ↑
If someone asked you about the market outlook for digital content, what would you say? If you think NFTs are a fad, then you don’t understand their value-add for content creators.
We’re already seeing a push for direct fan to creator relationships. Substack is an easy example. But what about Youtube super chats and paid member options, Patreon pages, or Twitter’s roll-out of superfans? It’s not a coincidence.
The ad market for content creation needs to reinvent itself, badly. Spotify is failing to dent podcasting because no one wants hand-placed ads based on personal data anymore. We want to hear from our favorite creators. Side prediction: Rogan will go independent within two years.
Folks would rather pay $5/month to creators than deal with advertisements. The other hidden downside to ads? They limit the creator’s creativity. If company x doesn’t want you bad-mouthing industry y, you don’t bad-mouth industry y. Over time, that hinders the creative process.
NFTs offer content creators yet another way to monetize beyond ad revenue and subscription models. And the best part? NFTs go beyond content as a value-add for fans, they offer investment opportunities, bragging rights, exclusive collectibles, etc.
And I haven’t even touched on gaming.
NFTs are already mainstream
Diplo, Dillon Francis, Paris Hilton, Mark Cuban, Grimes, Lindsay Lohan, Jack Dorsey, Shawn Mendes, Steve Aoki, Rob Gronkowski, Kings of Leon, Nyan Cat.
These are a few celebrities already pushing NFTs. If I said those people had one thing in common for any other topic, would you consider it mainstream?
The question becomes whether NFTs will stick, or end up falling out of fashion like Bitcoin. Oh sorry, I thought Peter Schiff was here. Nope, NFTs will do just fine.