So. NFTs. What is all the fuss about? Glad you asked. There is A LOT of buzz about NFTs (non-fungible tokens) floating around the tech world these days. Even the world at large is freaking out about NFTs. Which means there is now almost as much misinformation as there is real, useful knowledge.
If you’re looking to break through all the hype and get a level-headed perspective, you’re in the right place. Obviously, we are very excited about every aspect of NFTs, but we know this is a brave new world for so, so many creators. We want to help you understand what’s going on, so you can wade into the waters of the new Creator Economy, confident and ready to swim.
What makes an NFT different than another digital item?
At its core, an NFT is a digital collectible encrypted with blockchain technology. Like the Mona Lisa, there may be copies, but there is only one original, and it only has one owner. But there is so much, MUCH more to this fascinating (relatively) new product. The key piece of information we want to share is that NFTs are not simply trendy digital images. They don’t even need to be images at all. WHAT? Yes, really.
To understand how an NFT is more than a piece of digital art, we’ll focus on the last word in the acronym, Token. The current explosion of NFT offerings are mostly animations and photomanipulations, but it’s important to remember that an encrypted token can be attached to almost any digital item, from a piece of sports memorabilia to a song or even a novel. An NFT could be a ticket to an event, a backstage pass, or a password to a Zoom call. Many creative works stored as digital files are candidates for NFT minting.
Going forward, creators can use the NFT movement to cut out intermediaries like stock art and photo catalogs, huge content and literature publishers, record labels, film studios, and the list goes on. Like never before, creators can cultivate and maintain an audience, offer work, receive compensation, growing concurrently as an artist and as a business. All using NFTs. All with no central gatekeepers.
A marketplace like Orderinbox is a social space that unites creators and collectors. It’s a place to meet, sell, collect, and showcase. It’s the foundation of tomorrow’s decentralized Creator Economy where every creator can thrive.
What can you do with digital collectibles?
The first thing we suggest doing with an NFT is showing it off! What would you do with a bold new piece of physical art as soon as you had it hung or installed? Invite your friends to check it out, of course. You want friends and peers to see, hear, watch, or read whatever your latest obsession is. And you can do the same thing in digital spaces, whether it’s right here on Orderinbox or embedded in your own personal website.
As the NFT world grows, so will uses for their owners. You won’t just hang it on your digital wall. (Or watch it get copied to a chorus of giggles.) You’ll wear it, read it, or be immersed in a private experience. And in the Metaverse, you’ll share it as you see fit. Particularly if we’re talking about an exclusive digital home or something as expansive as a private tour of Middle Earth.
In a world increasingly vulnerable to a loss of interpersonal connectivity, we think online spaces – the Metaverse – and their contents will become a higher priority. If you can’t connect in person, the virtual space where you DO meet can and should be special. NFTs can be a part of that.
Why ‘own’ digital items?
The appeal of owning something you love is undeniable. Driven by anything from the surge of nostalgia upon discovering a childhood toy to the thrill of finding a rare designer handbag. Perhaps it’s the rush that comes with winning an auction for a one-of-a-kind movie prop from an iconic blockbuster. And as our lives evolve digitally, the need to get that physical object into the palm of your hand is diminishing.
Have you ever purchased a piece of art or a handmade product from someone you follow on social media? Were you motivated by both wanting to have the item AND to financially support the artisan? Apply this logic to NFTs and the reason for ownership evolves from investment frenzy to the foundations of the Creator Economy.
Yes, NFTs are currently popular with investors. But we see the long-term future as one of relationship-building between creators and collectors. This evolving Creator Economy relies more on a larger volume of accessibly-priced NFTs and everyday collectors.
Continuing the fine art example, the average collector can’t afford to buy a Monet. But an original landscape from an up-and-coming artist? That’s much more doable. And in the end, probably more meaningful for both the artist and the collector. Extend the example to a Fortnite player buying an exclusive skin from a creator they follow on Instagram. It might not be a tangible item, but the purchase has both meaning and value.
Apart from the showing off feature mentioned above, one of the main reasons to own an NFT is to support the creator behind the work. Would ever consider purchasing a Patreon subscription from an artist you want to support financially? Or would you simply add a few dollars by choosing a tip-the-artist option in an online shopping cart? If so, purchasing an NFT offers the same benefit.
Are NFTs the solution to content piracy?
Creatives struggling to earn a living off low royalties also have to contend with content being outright stolen from the beginning. We won’t debate whether someone is a true fan of a musician, animator, actor, or writer when they collect that person’s work via peer-to-peer torrent networks. But we can tell you that copying an encrypted piece of content is going to get harder and harder as the technology progresses. As it stands, a digital art NFT can be copied, but you can’t claim ownership. We don’t think the capacity to simply copy an NFT is going to be the case forever. And for other forms of NFTs, copying takes more than just a right click regardless. So, the viewer’s willingness to watch a movie with a giant watermark in the way won’t even be the issue.
And while NFTs offer the security of blockchain encryption (which will only get better over time) they also provide residual income from every subsequent sale. You can bet Stephen King doesn’t see any royalties when his novels are resold at used bookstores. Nor does Stevie Nicks see income when a Fleetwood Mac album is sold at a used record shop. One-time sales royalties are all fine and good for big name artists. But for the other 99% of creators, having residual income could make the difference between a living wage and a hobby.
How long have NFTs been around?
If you’re tempted to think of NFTs as something brand new, a fad that just appeared and will be gone tomorrow, we’ve got a few hard facts to keep in mind.
NFTs can be traced back to 2014. That first-ever NFT, Quantum, made it from the New Museum in New York to Sotheby’s auction house seven years later. So, if you thought NFTs were a just a fad, it’s time to think again.
It was CryptoKitties’ monetization through tradable cats in 2017 that garnered significant public attention for NFTs. But it wasn’t until 2020 when NFT popularity truly exploded that we saw its value balloon to $250 million. And in 2021 $41 billion worth of cryptocurrency was spent on NFTs.
And while no one knows what the future holds, we can see NFTs evolving beyond their investment potential, being adapted to serve their creators and collectors in lasting relationships. NFT flippers may be around for many years. But we think the Creator Economy will endure as long as creators create.
Is the Creator Economy the future of creative careers?
If you peer into the not-so-hazy future of the creator/collector relationships we’ve outlined above, you can see the potential for meaningful and sustainable income for creators. Creators who want to be truly available to their core fan base could see a very real and viable livelihood unfold, all with NFTs at the center of it.
When digital giants like YouTube and Spotify removed gatekeeping barriers to sharing videos and music, artists didn’t have to wait for a “yes” from someone in power in order to get their work out into the world. But their share of the profits hadn’t caught up to living wage levels. And if you’re serious about being a professional creator, you need more than pennies worth of royalties on your photography or fiction.
We know the artist community has been crying for years, “Pay the artists!” And at Orderinbox, we’re listening. Creating is work. A lot of work. From creating an animated video to recording a song, we want that work to be rewarded. We believe that just because you’re passionate about your work, doesn’t mean that you should have to work for free.
Will creators side-step intermediaries and engage in the Creator Economy exclusively? It’s hard to say. We think, at a bare minimum, NFTs will change the way creators work, as well as how the public at large views that work. And the change will be lasting.
At Orderinbox, our creators have a voice. And once we are operating as a DAO, that voice becomes ownership. We will be whitelisting creators and collectors on our platform soon.