Disclaimer: Any views expressed in the below text are the personal views of the author/s and do not constitute investment advice or recommendations for investments. The author/s views should not form the basis for making investment decisions - invest in markets at your own risk after performing thorough due diligence.
$36 Billion. As of May 2022, this is the cumulative yearly value of NFT sales across 18 blockchain networks. This is no small sum, and many people have been puzzled as to the actual value of this technology or the myriad assets it has magically spawned. From the outside looking in, spending the GDP of Bahrain on JPEGs of apes, mutants, cats, or strange pixelated punks doesn’t seem like a brilliant idea.
Coming to prominence amidst a maelstrom of hype, cheap money, and monkey pictures, why Non-Fungible Tokens (NFTs) matter isn’t entirely clear. Spending millions on a JPEG when you can right-click and hit “Save As” on the same image seems asinine, vulgar, and as though that money would be far better spent on something else with actual value.
However, NFTs are arguably the most misunderstood innovation to come out of the blockchain space. If you take a step back and sift through the hype, snake oil, and rugs to appraise the underlying technology and what it enables - the true nature of this strange reality will emerge. If implemented correctly, NFTs carry a plethora of utility and far larger total addressable market (TAM) than many today realise.
In this part one of our NFT series, we’ll be helping you navigate and understand this new asset class. We’ll assist you in stripping away the hysteria from all sides and opening your eyes to the immense potential of this exciting technology. Let’s dig in.
The Basics
An NFT is a certificate of digital ownership cryptographically secured on the blockchain at its foundational level. This certificate conveys ownership rights to an underlying digital asset. The closest analogue to this in the physical world would be a hybrid Toyota Prius-Esque cross between a property deed and a bearer bond.
Property deeds are registered to your legal name, stating that you are the homeowner in the eyes of the law. These certificates convey property rights to you as the legal owner, meaning you are free to do what you will with the asset they represent.
Bearer bonds are physical certificates with coupons redeemable for interest payments at financial institutions. It doesn’t matter who the owner of the bearer bond is, as it is the holder who can redeem the coupons for payment.
Figure 1 - US Bearer Bond. Source: Wikipedia
NFTs convey the same rights as the above two examples, except everything is digitised. Instead of the certificate being registered to your legal name, it is held in a wallet that you control access to, and merely holding the NFT means you own the underlying digital asset. This asset can vary, meaning NFTs can be art, a photo, proof of ownership/purchase, a meme, a video tutorial, a skit, a tweet, an Mp3, music video, or even patents, intellectual property, and software.
Fungible vs. non-fungible assets
Any non-fungible asset that can be stored digitally or represented by a digital equivalent can be an NFT, so what does fungibility mean?
The fungibility of a given asset is its ability to be interchanged with other assets of the same type. If a pair of assets are fungible, the implication is that they are identical in their specification and properties, and each item could be substituted for the other on a mutual basis.
Gold, money, and Bitcoin are all fungible assets. If a person were to lend someone $50 of gold, money, or Bitcoin, the borrower would be able to pay the lender back with a different piece of gold, note, or Bitcoin, respectively. This is because these items are all mutually substitutable, and as long as the nominal value of the debt is repaid, it does not matter if the gold, money, or Bitcoin is the same.
Figure 2 - Gold and Bitcoin are fungible assets. Source: Unsplash
If an asset is non-fungible, it cannot be interchanged with another one on a mutual basis, as the properties of this asset are unique. A car or a painting is a good analogue here. If someone were to borrow a friend's car for the day or wanted to exhibit a piece of their artwork, they could do this as long as they returned the exact vehicle or painting afterward. Receiving a different car or painting back isn’t something the majority of people would tolerate, as they would want their car or painting back. Its properties are unique, and these unique properties are what make it non-fungible.
Why do NFTs matter?
With all of the noise and hype surrounding NFTs in the past 12 months, it’s not entirely clear why this relatively obscure sector of a nascent industry experienced such a crazy run. The apparent rationale is a combination of the abundance of free capital flows and an over-exuberance of new market participants from 2020-2021. To fully understand, we must analyse the types of behaviour that NFTs enable, for whom those behaviours are enabled, and the value that is unlocked in the process.
Social Value
At their core, NFTs enable creators to fully own the payment relationship with their fans or supporters and build a community around their work. This may not sound like much, but if we look at this through the lens of an artist, it will make more sense.
The stereotype is that the overwhelming majority of artists are woefully underpaid for their talents, and most will never make it big. Those who succeed tend to have been in the right place at the right time with the right network, connections, and talent at the right moment in the social zeitgeist. They will have had to navigate a litany of intermediaries, agents, brokers, dealers, and gallery owners. They will have had to build and maintain a relationship with these stakeholders, all of whom will want a piece of the proverbial pie to climb the greasy pole to the top. Only then will they achieve the elusive success that comes to so few. This journey is not the only journey that an artist may take; many succeed in other ways. The point here is that it is notoriously difficult to “make it” in the art world and to build a connection with someone who appreciates your work; there is a crowd of people you have to get through first.
The same applies to all industries and endeavours where go-betweens take a considerable cut of the fruits of one's labour. If you are producing unique work, be that web design, music, games, digital art, or something else, and that work can be digitised, then you too can benefit from using NFTs as a distribution channel.
Figure 3 - NFT Artist Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s for $69m. Prior to this sale, the most Beeple had sold was a print for $100. Were it not for NFTs, this sale would not have been possible. Source: The Verge
NFTs cut this crowd of intermediaries and gatekeepers out of the chain, thus allowing artists to create a direct relationship with their fans and the broader community. This direct relationship has a double effect. It will enable the artist to take complete control of their creative process and payment relationship whilst personally engaging with their community. It also empowers the community to support the artist directly and in unconventional ways, as they are being engaged by the very person, they are looking to support. The community has an opportunity to form a genuine connection with the artist and also connect directly with others who share their love for the creator. This last point may seem a bit of a stretch. However, it will make more sense if you look at the massive proliferation of Profile Picture (PFP) projects.
Profile pictures are how you display yourself to the world. You can tell a lot about a person from their photo. Your choice of image will create a distinct impression of who you are and what you’re about. That impression is essential, and different pictures are leveraged for various purposes. LinkedIn profile photos, for example, tend to be very different from the equivalent on Instagram, even more, different from that carefully selected Tinder pic.
NFT PFPs are precisely the same, except instead of the picture saying something about you directly, the values and vibe of the community and what the project stands for are represented.
Figure 4 - The CryptoPunks NFT collection, one of the first and most famous PFP projects in the NFT space. Source: Geekflare
Owning the Internet
Contrary to what you may think, you don’t own any part of the internet.
Social media is so ubiquitous that not using it makes you the weird one that clearly must have something to hide if you’re not posting about it 24/7. Yet your social media profiles, though managed by you, are only yours so long as you adhere to the terms and conditions of the platform. You neither own the data collected from that social media profile nor the information about your likes, habits, connections, and relationships. The trade-off has always been that you get to use the platform for free in return for this data. This asymmetric relationship has massively benefitted the Web2 giants – entire business models revolve around this continued flow of data from you to their algorithms, servers, and advertising partners. This shift has been a gradual process, but it has now progressed to the point where the idea of owning anything in the digital space doesn’t make sense on a societal level.
Property rights are the bedrock of our entire social and economic system. For them not to exist in a sector of reality that is arguably becoming more important than the physical world is baffling. NFTs have the potential to change this. In the example previously mentioned, we demonstrated the similarities between NFTs and property deeds. This is important because NFTs allow people to own their digital assets and content verifiably. This may not sound like a massive innovation, but it has far-reaching implications for how the internet operates, where and how value is captured, and who shares the rewards. Viral videos and memes are perhaps the best examples of this. When a piece of content goes viral, it tends to do so for several reasons. The content may be something novel, shocking or groundbreaking, and it also taps into the cultural zeitgeist of the particular community for which it was made. This takes advantage of the network effect – a piece of content takes on a degree of cultural significance and, in doing so, becomes memetic.
Until now, this content has been hosted on a centralised platform provider, Instagram, YouTube, Twitter, TikTok, or otherwise. The platform captures much of the value as a result, and the creator will only share in that value if the terms and conditions they agreed to when posting continue to be adhered to, if at all. If they fall foul of those rules, goodbye value sharing and monetization. Suppose the creator was also to mint that piece of content as an NFT and leverage the network effects made possible by conventional social media channels. In that case, they have verifiable proof they created the content – this then opens up the opportunity for people to own a piece of internet history.
This happened with the original Nyan cat meme, a rainbow pop tart cat video flying through space that went viral in 2011. The creator listed the original file as an NFT in December 2021. The original video on YouTube has been viewed 199 million times. It has spawned countless spin-offs, been featured on clothing worldwide, and become a part of the social zeitgeist, having featured several times on TV. This listing allowed collectors to own a piece of internet history verifiably, and the NyanFT subsequently sold for $590,000. This may seem obscene for a .gif you can easily screenshot. However, if one stops perceiving it as nothing more than a piece of digital “artwork” and starts to think of it as the cultural relic it had evolved into, it makes far more sense.
Figure 5 - The original Nyan cat meme. The original file for this video clip sold as an NFT for $590,000.
A new era of collectibles
Collectors, eccentrics, and those with deep pockets spend lifetimes curating eclectic collections of relics, oddities, and trinkets from multitudes of cultures and civilisations. At the time of their creation, many of these items would have been everyday objects that nobody would have paid much mind to, but now they are worth a fortune. Originals from famous creators throughout history routinely sell at auction for eye-watering sums of money, only for that item to be stored away for personal enjoyment or as an investment/tax benefit for the anonymous bidder. That is because collectibles are an integral part of what we term as wealth.
Owing to the impact of the internet, social media, and technology, much of the process of cultural growth, discovery, and expansion has now moved online. Yet, there has been no way of tracking items of cultural significance. Simply put, there was no way for people to verify they were the creator of a piece of content for one and no way for ownership of that content to be tracked for two.
NFTs change this. They have given us a way to implement property rights across the 20+ years of historical content creators have diligently produced for their communities to enjoy.
Figure 6 - The different dimensions of value. NFTs allow for ownership of digital assets that fall into these different categories of value. This brings the concept of cultural heritage to the digital world. Source: SpringerLink
Collectors and community members now have a method to invest in content, creators, and assets that they ultimately believe will have significance in the future. NFTs, then, are a way for individuals to take equity in the future career of the future content creators, empowering those same creators to continue doing what they do best: creating.
Regaining Sovereignty Over Your Creations
This introduction of sovereignty over one's creations can potentially restructure the internet. With this restructuring, the rationale for hosting the content on a third-party platform will no longer exist. Creators can connect and engage directly with their community, and subsequently own all parts of the payment relationship. Instead of waiting for the platform to instruct their bank to pay the creator's bank, their community can pay the creator directly. This means the creator no longer has to submit to the rules and whims of the platform or payment processor, rules which can and do have a tangible impact on the day-to-day lives of many people.
Figure 7 - Tristan Harris’ TED talk on the impact of tech companies policies on individuals worldwide.
From recent events, we have seen that many platform providers have a tremendous influence over the nature of the content hosted on that platform. Twitter, for example, has a supposed “hidden agenda” from a political standpoint, with certain voices being excluded from the platform. YouTube has been shown to de-monetize specific videos arbitrarily, and copyright claims are often misused. To be clear here, we are not commenting on the politics of the decisions made by these platforms regarding the type of content they host. What content is acceptable and what is not is a thorny issue to contend with. Contending with this issue at all contradicts many people's understanding of “free speech”, and there has been significant pushback recently as a result. This is important as one must question private platforms' influence on public discourse with their policies. At a certain number of users and impact, one could argue that these platforms are no longer private in the complete sense. Once this point has been reached, should the same private decision-making frameworks persist, or do those platforms become public?
NFTs fix this problem by making these third parties obsolete, which in turn allows creators and society at large to place limits on the influence these platforms have. If the end is no longer bound to the terms and conditions of that platform, that platform will see its power diminish.
Regulation will be needed to ensure that high standards of safety in this brave new world are maintained. Vulnerable users must still be safeguarded from the more unsavoury aspects of the human condition, and as many people as possible must have a positive user experience. The difference will be that the creators and the communities around them will set those standards, not shareholders and executives in a Silicon Valley boardroom or Wall Street bank. This will empower those same creators throughout the entire process of value creation and delivery to their community. This, in turn, will enable communities to support their chosen creators, coming together in a positive feedback loop of growth and engagement.
Figure 8 - Video from Deloitte US exploring the potential impact of NFTs beyond the hype and the impact they may have on existing business models.
The Role and Importance Of Community
Many of the innovations we have covered thus far focus on the creator, but a creator is nothing without a community around them in support. The most successful NFT projects understand this, as they are at their core a community-driven endeavour. The initial NFT boom revolved around art and PFPs, as we discussed in the earlier section. From the proliferation of many debatable quality projects from a purely artistic standpoint, it’s clear that the movement is not about the quality of art but the social movement that forms around it. The initial concept from a development team or individual serves as the foundation upon which a community can be built. Once that foundation is laid, those with the vision to start the project generally take a step back, allowing the community to steer the direction the project takes, identifying areas of new value and opportunities. This puts community members firmly in the driving seat, empowering them to help the project grow and flourish in alignment with the ideals and values of those members.
As NFTs allow creators to build and empower such strong communities around their content, the benefits are decentralised in their distribution. This means that value capture is enjoyed by the many, instead of being centralised and enjoyed by the few.
Empowerment and Governance
Community governance is at the core of the NFT space and is a defining characteristic of Web3. As communities around a given content creator grow in size and complexity, the importance of responsible governance rises. The simple act of purchasing an NFT means that you become a part of the community, and with that, you will want to have your ideas and interests heard and represented. Getting involved with creators and their efforts intimately is an empowering experience, but those same communities can and do frequently implode without sound governance frameworks in place. Many of the most successful blockchain games are not governed by a central entity but instead by a DAO.
A DAO, or decentralised autonomous organisation, allows developers to engage the communities that form around their games. This, in turn, allows community members to get involved with the protocol's governance.
Community voting is used to achieve this. Community members that hold tokens can vote on proposals that affect the development of the protocol, ensuring the project stays aligned with the values of the community. Voting is now also possible with NFTs.
Though this particular application of the technology is young, and there are numerous problems to overcome, the kind of direct engagement that token and NFT-based voting enables is of tremendous value to the community and the creator alike.
Figure 9 - NFTs and DAOs go hand in hand, and allow effective governance of the diverse communities that form around NFTs. Source: Antier
Building and Maintaining Relationships
For a project to succeed, there has to be a degree of mutual trust. A place of understanding between a creator and the community around the content must be reached and maintained. The development team needs to trust in the community to support them on the journey, and the community needs to trust in the development team’s ability to deliver and listen to their ideas. This trust takes time to build but is easy to lose. If it’s lost at any point, the project will become what the misconceptions about NFTs say it is: a collection of JPEGs with no inherent value or outright scams.
Launching a project is easy, and many development teams simply do not have the experience to see their ambitious goals through to completion. This, in many cases, leads to the tragedy of overpromising and under-delivery. With projects being launched that contain progressively more ambitious roadmaps and timelines for development, loss of trust is easier than ever.
Product And Content Delivery
NFTs are, at their core, community-driven projects and with the speed at which the NFT space moves, finding new ways to add value to the community is necessary for survival. Simple PFP projects that offer nothing more than the underlying artwork are not innovative enough to succeed in such a fast-moving space.
So, what constitutes innovation and utility for an NFT project?
There is no correct answer, and it is entirely dependent on the vision of the creator and the community. It’s a broad term, so it makes sense that the additional functionality built into NFT projects is just as broad. The breadth of this term is both a blessing and a curse, and even though the utility is a new feature to the NFT world, it’s already seen as an empty buzzword in many circles. The problem is that “utility” is a nebulous term, and it’s not always clear if utility means value-add for the project. It doesn’t matter what the utility is or is professed to be if the community neither desires nor values it.
Conquering the Challenges
Despite the unprecedented opportunity that NFTs deliver, there are still plenty of naysayers who neither see nor understand what this technology can provide. These individuals' concerns tend to revolve around a number of specific topics, which we will explore in this section. This list is not exhaustive, but highlights some of the louder critiques that we have noted.
NFTs and Pushback From The Gaming Community
Microtransactions and pay-to-unlock games have become the prevailing model in today’s gaming industry. Legacy developers are being seen to view NFTs as nothing more than another potential revenue stream, extracting even more value from their already disgruntled player base. It’s understandable why gamers resist implementing NFTs, as the possible implementation strategy will do nothing more than further entrench existing predatory practices.
Ubisoft Quartz is an excellent example of these fears realised. At the launch of Quartz, scalpers were quick to buy up all of the Ghost Recon NFTs available, re-listing them with prices ranging from $634 to $423,000. Critics further stated that the NFTs added nothing of value to the player experience while simultaneously draining precious resources from the true fans of the game.
Since then, the Ubisoft Quartz project has been shut down and was widely considered a complete failure. It is not just Ubisoft that has received significant pushback against its efforts.
Figure 10 - Ubisoft Quartz, an NFT project widely vilified by the Ubisoft community as nothing but a cash grab. Source: GamingBolt
At their core, these discussions around how NFTs can be implemented into games, and pushback from the gaming community, are a microcosm of the wider picture. They represent the coming battle between Web2 value extraction-based business models and Web3 value-sharing-based models.
A big part of the challenge that needs to be overcome is education-related. In the same way that the majority of the population does not fully understand the scale of the impact NFTs can have, the same can be said of the gaming community. Traditional gamers' concerns about the predatory implementation of this technology are real and valid, so it is essential that these diverse communities have the educational resources they need to understand how value could be shared with them with the correct implementation of NFTs.
Scams and Fraudulent Activity
As with any new technology, there will always exploitative bad actors. This is rife in the NFT space at present; there have been numerous verifiable examples of blatant scams, rug pulls, money laundering, and wash/spoof trading. The same thing happened with the ICO boom during the 2017 market cycle. We argue that NFTs are currently at roughly the same stage of development from a maturity standpoint, yet with two key differentiating factors.
Firstly, regulatory bodies are far more aware of the potential impact technology of this nature can have. With landmark crypto legislation being drawn up in Europe and the US, the dynamics of the NFT space will fundamentally change when this regulation is implemented. We wager it will not take as long for more specific rules to be implemented for NFTs. With comments from the UK government commissioning an NFT for the recent Platinum Jubilee of Queen Elizabeth II, it may come far sooner than many expect. Couple this with the fact that criminal charges are already being levied for insider trading of NFTs in numerous instances, and it quickly becomes clear that the NFT space is developing at an astonishing rate.
Figure 11 - The UK Government has commissioned HM Treasury to issue an NFT. Source: New Scientist
Secondly - prominent players are already deeply involved with the NFT space. Numerous luxury brands such as Louis Vuitton, athletics brands such as Nike and Adidas, journalistic behemoths such as TIME magazine, and more high-profile celebrities than can be counted are deeply embedded with the wider NFT community.
This level of borderline “institutional adoption” means that, in many ways, the NFT space is already more mature than the crypto space that preceded it. With this comes more effective ways to detect fraudulent activity, for the simple reason that these already established players already have their reputations on the line by blazing a trail in this manner, and it is in their interests both financially and socially to develop the tools needed to reduce unscrupulous activity. It is simply a matter of effective risk management, and if it is cheaper to build the solutions to the problems you encounter than it is to ensure the cost, then it just makes good business sense.
Project Collapses
The NFT space today, much like the crypto space and broader economy, is going through a period of significant upheaval. Owing to the young age of this sector of the industry, this will be the first bear market cycle creators, developers, communities, and NFT market participants have experienced. Invariably, this will lead to the untimely death of most projects, including those you would never expect to collapse.
This is a good thing.
Periods of consolidation following frothy market activity tend to weed out the weaker projects from the more robust and sustainable. They quickly highlight the teams, creators, and communities in it for the long haul and “the tech”. This results in a net reduction in the amount of fraudulent activity going on, as mentioned above, and will allow the projects that will survive to continue to build in relative peace.
We spoke at length on this topic in the context of DeFi here, and we wager the same sequence of events will transpire within the NFT space.
Figure 12 - Crypto M&A activity peaked in 2021, however signs indicate that 2022 may yet set a new high in number of mergers. Source: Arcane Research
Environmental Concerns
In our view, environmental concerns around NFTs are one of the most prominent examples of misdirection. Many of these concerns revolve around heavy criticism of the underlying Proof-of-Work (PoW) consensus mechanism used to validate transactions.
The majority of NFT activity up until this point has been on the Ethereum blockchain, which is currently a PoW chain. Owing to the energy-intensive nature of PoW, the carbon footprint for minting an NFT is presently much higher than it needs to be.
It won’t be for much longer.
The long-anticipated ‘merge’, which will transition Ethereum from the energy-intensive PoW mechanism to the significantly more energy-efficient Proof-of-Stake (PoS) mechanism, is finally approaching. Ethereum will be largely if not entirely carbon neutral at this stage.
Other Layer-1 blockchains are also gaining significant liquidity and scale - many of these chains are already using PoS. Further NFT transactions also occur on Layer-2 networks such as Polygon, a PoS chain.
As such, the concerns around the environmental impact of NFTs are primarily misplaced and also fit into a much larger overarching narrative that crypto is a net negative for the environment. There are many arguments for why this is the case; however, many of them miss the point entirely. The negative environmental impact of crypto revolves specifically around PoW chains, specifically Bitcoin. The Bitcoin network uses the energy equivalent of a small country in validating transactions, yet the majority of this energy comes from provably renewable sources. It is the most verifiably ‘green’ technology of it’s scale ever created.
The main issue, therefore, is not the energy use, but the social acceptability of energy being used in this way. To put that into perspective, US citizens and their tumble dryers use significantly more energy than the Bitcoin network, despite the fact the rest of the world manages just fine without this household appliance. Data centers also use far more energy, as does air conditioning, alongside the global transport network. These forms of energy use are all socially acceptable. Bitcoin is not.
This topic and the reasons for this narrative still existing deserve an article all of their own, and there will be one coming in the future.
Figure 13 - Energy consumption of Bitcoin mining versus other energy intensive activities. Source: World Economic Forum
Closing Thoughts
Creating a new asset class and something entirely “new” - is no small feat. The genesis of a technology that has the potential to rearrange the most ubiquitous technology on the planet fundamentally, then, is a different beast entirely. As with any creative process, numerous failures traverse along the way, and the development of the NFT space is no different. The coming collapses of most “successful” NFT projects will not be an easy experience to endure. Nor will the final scams and impact of increased regulatory scrutiny, nor the building of solutions that solve any environmental concerns that arise in the future. The skeptics among those of you reading this, and we are sure there are many, will need further convincing of the importance of this technology.
NFTs are not about art, monkeys, punks, or JPEGs at their base level. They are about ownership and the ability to maintain sovereignty over all aspects of your creations. They are a means to make our digital reality fairer and more equitable, returning power to the many by taking it out of the hands of a few. Suppose this sounds like fantasy and meaningless conjecture. In that case, it is not because this process is already happening in numerous areas, which we will be exploring in detail in the coming articles.
We ask that you reserve judgement, consider what we have written here, and ask yourself the question, “what if?”
Specialist Insight
We reached out to an expert in the NFT space, and good friend of ours, for the below insights.
@onlysenna_ is CEO of The SolaVerse - an ambitious NFT/metaverse/play2earn hybrid project. The project has featured in Forbes, Medium and Cointelegraph amongst various other prominent blogs and publications.
As a lifetime gamer, inquisitive geek and entrepreneur, Senna began coding video game scripts when he was just 12 years old. At 14, he designed, developed and managed an extremely successful lead generation business. In 2009 whilst exploring online forums at the age of 15, Senna came across the Bitcoin Whitepaper. This discovery sparked a passion for the blockchain and its future capabilities that has spanned the last decade.
Senna is now channelling his passion with the creation of The SolaVerse project, establishing himself as a prominent force in the metaverse, NFT and blockchain gaming space.
Twitter Handles
https://twitter.com/onlysenna_
https://twitter.com/The_SolaVerse
Webpage
SolaVerse Whitepaper
https://thesolaverse.com/whitepaper.pdf
Q. What is the most important utility that NFT technology enables?
A. The most important thing in my opinion is undeniable, provable ownership of a digital item, asset, ticket and so on. From sending out 100 private party tickets with wallet verification on the door, to a digital receipt for the lambo you just bought. You could even go as far as saying NFTs are a perfect platform for things like elections. In the UK we have the electoral roll system, we could easily distribute 1 NFT token to each person, that token represents your voting rights, that token gives you access to make a vote, and that vote is then published on a public ledger - avoiding any potential fraudulent votes.
Q. What is the most misunderstood aspect of NFT technology?
A. The potential scope of what NFTs can be. You can, and we will, use them for anything and everything. The current issue is cost, gas fees, especially on Ethereum, are too high to be usable on a global scale.
Q. What is the role of community in the NFT space from your point of view?
A. Community is everything in web3 and the NFT space, and crypto in general. We see many traditional companies try to enter the NFT space with no prior knowledge and completely fail. It’s because, in my opinion, the core reason that Bitcoin, crypto and NFTs are so popular is because they have (currently) removed the constraints of the real world. The community are the ones who decide if somethings succeeds or fails, you can’t just force your way in. It’s the start of the metaverse - you have to earn your place and work your way up the ladder.
Q. What is holding the NFT space back from its next phase of evolution and adoption?
A. The same thing that was holding cryptocurrencies back a few years ago - lack of education and onboarding support. There are so many incredible use cases for NFTs, but most people don’t know about them. They listen to the first influencer they see and buy a JPEG because apparently the value of it is just going to go up. Like with cryptocurrencies, there are bad players in the NFT market, and when an industry is in its infancy, it needs to learn and go through waves of development and education to finally become an established and stable industry. I think this next wave will be focused on the education of NFTs and we’ll then see a huge explosion of adoption.
Q. Has there been anything about the NFT space so far that has surprised you?
A. How friendly everyone is! When we launched The SolaVerse back in October, we couldn’t believe the amount of support that we received from everyone. We had over 50,000 followers in a week, and these people were ready to come to war with us. As we attempt to build a platform that connects all existing and future metaverses together as one, community and collaboration is going to be key, and to have the support that we already do, that has honestly been such a welcome surprise for the whole team. We can’t wait to build and grow with everyone together.
Q. How do you see conventional businesses and business models being challenged by NFTs?
A. I’m one of those people who believe NFTs can and will enhance conventional businesses. There are an unlimited amount of potential use cases for NFTs, and although I do believe some businesses will fall behind and decide not to adopt the new technology, this happens with every new advancement in technology. Things like Play2Earn industries will become trillion dollar markets in the future, but that doesn’t mean that current gaming companies can’t succeed without implementing NFTs, I just believe that games/companies will have such a huge advantage by doing so. As years have gone on, and even through history, people have been willing and wanting to spend more if they receive more value for their money. I think that’s what NFTs do for conventional businesses, artists, games companies and everything in between, it gives them an additional tool. A bit like what a website was for a business back in the early 2000s - and now a business can’t survive without one.