NFT signals emergence of new media ownership model
When Twitter boss Jack Dorsey announced that he was selling his first tweet “just setting up my twttr” for $2.5 million, everyone was baffled. He was followed by Elon Musk who was selling a tweet and a song. These two tech leaders were not joking, they were talking about Non Fungible Tokens (NFTs).
They are tradeable as well as digital ownership certificates representing the ownership of a unique asset. The concept of an NFT began as a special kind of token that works on the Ethereum blockchain. It was first popularized in 2017 by Axiom Zen, the startup behind CryptoKitties, a relatively popular Ethereum game that lets users collect and breed one-of-a-kind digital cats.
Some have dismissed them as just another internet craze that will evaporate. Internet history tells us that we should not ignore such developments. NFTs matter for a couple of reasons and businesses should take them seriously. We increasingly live in digital worlds. Our level of existence in the digital world differs and that determines the extent to which we will benefit and the degree to which we should care. To date, most NFTs are attached to collectible items like digital art and virtual goods in video games, but they could expand to include more digital assets.
One exciting area so far about NFTs is digital media.
They could upend the way digital media is distributed and monetized. Currently, most digital content is being monetized via platforms, be it ad-supported ones like Facebook or podcasts or subscription-based ones like Netflix or OnlyFans. These platforms act as the middleman between content creators and consumers and make a cut by the virtue of being the distributor. Although creators still own the copyright to their work, they relinquish part of their ownership and control over the said work to the platform owners and, in today’s meme culture, its consumers as soon as they upload it for distribution.
Real estate, event ticketing, brand licensing, and even tokens of real-world assets are also all possible use cases being explored. Nike, for example, has patented shoes as NFTs called CryptoKicks in December, which allows users to ‘breed’ different shoes to create custom sneakers that may then be manufactured in the real world. This implementation of NFTs smartly blurs the line between physical and virtual, yet capitalizing on monetization opportunities in both.
NFTs are more than just fun. Businesses should watch this space and explore how they can create value in the digital world.