The erupting hysteria around non-fungible tokens (NFT) is another once-in-a-lifetime chapter of this bizarre pandemic era.
I cannot profess to be an NFT expert. However, it is a topic that I am daily researching, studying, and absorbing. Since I am old, I will explain NFT”s in this manner. When I was a kid, I collected trading cards. Who didn’t? The basic concept of trading cards is the rarer the card, the more valuable it. NFT’s take this to an extreme. The value of an NFT is that there is only one of them in its more pure sense.
Now the BFT community will argue that there are collections and sets in the NFT world, which is true. But even they are unique in their own right. So let me try again. Let’s pretend you had an autograph from a famous singer. If that singer added your name and a message and dated it to the second, that asset would exist only once. If the singer signed another similar autograph, replete with the same note, and time-stamped it, that would be a completely different asset, despite its similarity.
Another way to think of it would be this. Imagine you own the original of Banksy’s Napalm. There is only one. Now other people could copy it, take pictures of it, or share prints of it. But there is only one original. NFT’s are the equivalent of that original masterpiece. Only digitally.
There have been some fantastic NFT stories told over the past few weeks. Start with Beeple, the formerly anonymous Mike Winkelmann. Before selling Everydays: the First 50000 Days for $ 69 Million (USD!), he had never earned more than $ 100 for a single print. NBA Top Shots have gone from zero to $ 500 million in sales with almost 1 million accounts in less than a year. Then there is CryptoKitties. Like NBA Top Shots, they are produced by the Candian Company Dapper Labs. In simple terms, people are buying digital kitties. They have actually been around for a few years. Still, the current frenzied orgy of speculation fueled by the blockchain/NFT/ Clubhouse has made them even more famous.
All this to say, there is a gold rush of hysteria happening around NFT’s. Their value to the consumer is built on scarcity, bragging rights, and the cool factor. The value of NFT’s to artists is an incredible opportunity to disrupt existing distribution channels, monetization models, and marketing platforms. The NFT puts the power even further in the hand of the artists. Whether that be musicians, visual artists, and authors. The ability to track the material’s ownership, ensure that royalties are always paid, and generate income from every transaction of their work is unbelievable.
But I do have a cautionary word—investors, amateur and otherwise. Artists, famous and wanting to become famous; brands, traditional or DTC; athletes, amateur or professional – should all heed this warning.
Do not treat NFT’s like a gold rush. They are not. Speculative purchases or investing could end up ruining people if they are not careful. It is hard to ignore that the stories of Beeple or Kevin Abosch, who made $ 2 million from an NFT art show after COVID cancelled his in-gallery events. It is hard not to want to. It is hard not to ignore that people pay $ 200,000 for LeBron James highlights that could be sourced for free on YouTube.
But here is what you have to remember. The actual value in an NFT is the democratization of creativity. The NFT allows artists and creators to share in ways never before accessible. To secure global attention, ensure the protection of their work, and get paid fairly for their work.
So if you’re interested in NFT’s for your brand, your fundraiser, your team. Start with the creators in mind. Most creators are also highly driven by their work over profit. They have a message to deliver, and they want to be heard. That is a highly customer-centric approach.
By beginning with the creator, you will also ensure the customer is the center of your story. As a responsible brand owner, remember we all own our brands. You need to think of trust as critical to your future. So do not attempt to create a get-rich approach to your deployment of NFT’s.
History has demonstrated to us from the gold rush to the dot com rush, to the blockchain rush, to the day trading rush that what goes up must come down. You are far better to take the NFT journey one foot after the other. There is no question that learning this brave new world is essential. But there is a difference between priority and urgency. One will ensure you follow your north star. The latter can have you chasing shooting stars.