Recently, publishers have been trying to get in on the action and a growing number are toying with NFTs in a variety of ways. TIME’s ‘Space Exploration’ cover art NFT sold for over $249,000 and the company is also building a 50-person team exclusively focused on NFTs and crypto. Bleacher Report auctioned NFT basketballs for around $810,000 in collaborations with 2 Chainz, Quavo, Lil Baby, and Jack Harlow. Meanwhile, The New York Times auctioned off a column about NFTs as an NFT and it’s now worth over $720,000.
But NFTs could also prove to be game-changing for writers. Mario Gabriele, who runs the business analysis outlet The Generalist, recently led a project that—to his knowledge—culminated in the first tokenised, crowdfunded equity research report. In simpler terms, The Generalist turned a written report about Coinbase’s IPO (which was accompanied by visualisations from digital artist Jack Butcher of Visualize Value) into a set of NFTs that benefited everyone involved.
Writers and artists got paid through crowdfunded support, supporters were rewarded through returns from a subsequent NFT sale of the work for 28.6 ETH (over $59,000 at the time), and collectors gained ownership over one-of-a-kind NFTs. All in all, it was a win-win situation.
In a conversation with The Hustle, Gabriele said he thinks NFTs “could offer newsletter writers an alternative to subscriptions and sponsorships.” But let’s back up a bit. Does that mean that soon enough, even your Screen Shot Pro subscription will be sold as an NFT?
“What gives an asset its value? The founder points to the product, the venture capitalist gestures at a sloping graph, the banker underlines figures on a balance sheet,” writes Gabriele, adding “What about the artist or the writer?”
Throughout history, creative works have been priced according to scarcity—we tend to give value to objects based on their rarity. That’s why, for example, Da Vinci’s ‘Mona Lisa’ was valued at $850 million in 2019, while a good replica might be worth a few thousand, and a high-quality online version is free or costs a tenner at most.
The original painting is worth so much because of its provable authorship, as well as scarcity—there can only be one in the world. On top of that, it is the product of one of the greatest minds of all time.
That concept is not so different from the dynamics that exist with the written word. “You can buy a copy of a Harry Potter book for $9.99 via Amazon (or $0.00 for Prime Members) or pay $6,500 for a first edition copy. The words are the same, the story is the same; in short, the art has not changed. The difference is the degree of scarcity,” explains Gabriele.
Although the variable of scarcity has played a big part in the career of many traditional artists, it has no use to those who create and share their pieces online. As Kevin Kelley explained, the internet is fundamentally a “copy machine.” It is effectively free and easy to create multiple versions of the same product. Death to scarcity; the internet made abundance the norm. As tech and culture further co-mingle, we’re entering an age of abundance, but even then, our love of ownership might take over.
And that’s precisely what NFTs can solve: the problem of abundance. In The Generalist, Gabriele explains that by introducing scarcity, NFTs alter the relationship between audience and art in two fundamental ways. First, by shifting from access to ownership.
As of now, our relationship to art objects on the internet is one of access. Even if paywalled, we do not own anything; we merely have a ticket to look around for a bit. And that was fine for a while. But now, NFTs are opening up the path for actual ownership. Questions of provenance, authenticity, and scarcity are solved by using the blockchain, which is transparent and verifiable. By making the construction of scarcity simple and safe, unlike before, NFTs have unleashed a new generation of appreciators and investors in art.
Secondly, NFTs also blur the boundaries between artist and audience by allowing audience members to partake in the creation of the work. This might involve supporting a project upfront in exchange for ownership and voting power over the direction of an artistic endeavour.
So what’s stopping us from doing the exact same thing with writers as well as other industries—many of which have already started playing around with NFTs? Of course, it’s not that simple but I’ll let Gabriele light the way for other publications and journalists to follow.
What is the link between Fortnite, Drest and the NBA? All make revenue from zero-touch cultural products that rewrite the rules of how we store value through the use of non-fungible tokens (NFT). Let me explain what these are and why you should care about all this now:
Zero-touch cultural products are not new; Kayne West has been at it for years. People buy clothes for their Instagram pic and then return them. Alejandro Jodorowsky’s movie Dune never came out but has a stan following. But what is culture these days if it isn’t content?
A zero-touch cultural product is intended never to be consumed in the traditional sense. They are meant to float around as pixels. But what can be the value in ‘owning’ a basketball moment or digital art? What if people start to collect emerging music, digital fashion, unseen parts of films or TV shows? People have always paid to own a moment; a piece of history and culture, a Babe Ruth baseball card, Prince’s guitar or vintage Dior. Many people invest in things they think will be valuable in the future. Just remember half of the world’s art is in vaults in Switzerland underground in the dark.
A non-fungible token (NFT) is a type of cryptographic token which represents something unique. The ‘fungible’ in non-fungible token describes something identical to something else—a Hermes bag or a Tesla share. When you buy an NFT, you are purchasing a token and the ‘thing’ linked to it, the transaction is registered on the blockchain, and each token is unique, which provides a permanent record of that purchase and provides proof of ownership. NFTs can be anything—domain names, virtual gaming items, and even tweets—but the most popular NFT category is digital art like images, audio, and video clips—basically, zero-touch cultural products.
Artists experimenting with cryptocurrency isn’t new; decentralised collectable marketplaces have existed since CryptoKitties launched in 2017. But with a growing awareness of NFTs among artists and creators, we should note that blockchain-powered signatures ensure that the original creator can simply verify a piece of digital content. Making them a viable path for brands, makers, musicians, designers and artists to sell their work, build community, and redefine how we define scarcity and assign value. Though we predict the people who will make the most money from this are brands (making a profit without making anything) and celebrities (who sell their old things to super fans or collectors).
NFTs are selling for real big money. At the end of February 2021, someone paid $100,000 for an NBA Top Shot. Fortnite Skins generated the majority of the $2.4 billion Epic pulled in from the game last year (Skins have always been the bulk of Fortnite’s revenue: free game, with paid-for or earned outfits). The artist Beeple sold 20 of his digital artworks for $3.5 million through a series of sales on Nifty Gateway.
NBA Top Shot is a platform created to sell and trade videos of memorable moments in NBA history—simply put, it sells trading cards, except the trading cards here are digital videos. Vancouver-based Dapper Labs developed it, which is also the company behind the CryptoKitties mentioned above. The NBA has sold $11 million worth of ‘packs’, and the cards in those packs traded for $70 million more on the secondary marketplace. The Top Shot site is created on Flow BlockChain and offers the ability to see every Maxi card being offered, its serial number, price and more.
At first, it is hard to get your head around; yes, you can get the same video on the internet anywhere, any time and watch it. You can also get the same picture of a Picasso on the internet and print it out, and that doesn’t change the value of the painting.
New ‘moments’ (trading cards) sell out faster than sneaker drops. Even the $9 entry-level packs, which contain three ‘moments’ and are intended as a low-cost way to get new users in the door, aren’t regularly available, and allotments of 25,000 packs are gone instantly when they drop. The $999 “Holo Icon” packs were in such high demand that the site crashed when they were released early February.
Though you might not be a basketball fan, it is important to see what this could unlock for other spaces such as fashion, music, art, films, and more.
In December 2020, digital artist Mike Winkelman, better known as Beeple or @beeple_crap, broke crypto art records. This February 2021, Beeple became the first artist to auction a purely digital, NFT-backed artwork at a major auction house, Christie’s.
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Although these ‘things’ or artworks tend to be digital files, they can also be physical objects. Beeple’s first sale “open editions” was essentially physical; each would have the NFT present by way of a “signed, numbered titanium backplate with hidden authentication markers” along with an “authentic Beeple hair sample.”
What is essential to understand when it comes to the art world’s new relationship with NFTs is how ‘smart contracts’ can change the game for artists and disrupt the institution, becoming a significant force.
NFTs are backed by ‘smart contracts’, which are written into the token from the outset. The terms of these contracts will execute automatically from then on. Notably, artists can write themselves into these contracts for a secondary market, allowing them to earn whatever percentage they establish upon every subsequent sale in perpetuity. Thus, if the artist’s career skyrockets and work balloons in value, they’ll see benefit financially in perpetuity.
All of this feels like similar energy to $GME and is in the same conditions that originally fueled it—economic instability, rage against the system, and bored young people. It is fucking with the assignment of value.
Those over a certain age will understandably find this all mind-blowing. But Gen Internet knows that a digital good or a crypto asset is a better investment than old school see, touch or feel things in this world. No one has power over them; there is no central authority; their efforts can’t be easily fucked over by some government agency or institution. Gen Internet has finally found one of its powers—financial unity. For the most part, they aren’t looking to break laws; they are simply looking to break the system.
People are looking for alternative ways to play with their money. If you aren’t graced with a trust fund and want to invest some money, you could learn the stock market, but it’s gamed against you. Just look at the $GME drama and Robinhood’s legal battle. But if you are a stan or a fan and love the NBA or art, why not use your knowledge to make some money and connect with a community?
Sarah is the founder of The Akin, a global insight and strategy studio, and a contributor to Screen Shot Pro.