NFT Meaning & Token Gating
NFT: Non-Fungible Token
Like that 1st edition, holographic Charizard card you had in grade school, a NFT is unique, often one of a kind. But unlike that Charizard you kept safe in its card sleeve, a NFT is digital (no accessories needed!)
NFTs are a fundamentally new paradigm for digital content. I can copy and paste the image above anywhere I want, but I can’t sell that image because I don’t own it.
NFTs are tokens on the Ethereum blockchain that represent art, music, videos, articles, and any other digital content. When you mint art as a NFT, you can easily verify if that image has been created by an authentic source because all information on the blockchain is available to anyone and cannot be censored.
Being able to verify source of a creative digital piece is a pretty nfty superpower, but we can go further.
What gives NFT meaning and value is digital scarcity. For the first time, things on the internet can be rare, one of a kind items. For the first time, you can own something on the internet and without it being stored on Evil Corp’s database.
But what if owning these NFTs came with additional benefits?
Token Gating: Granting access to holders of a specific token or NFT
Token gating is a way of super-charging a NFT, giving ownership of it more meaning. In addition to owning the video or song in a video NFT or music NFT, you can also guarantee only these holders can access that content.
Typically, when you create a NFT only one or a few people can own it and sell it, but anyone can view the art or content it references.
But why would you want to limit access and create scarce, digital content?
The same reason you upload exclusive content to Patreon. The difference with using Patreon and using a NFT is that your content goes from being a consumable to a commodity that you have full control of.
Instead of getting paid a subscription, you get paid in sales of your content like you would on Amazon for selling a good. This may seem subtle, but it changes a lot.
Instead of earning a fixed amount based on the size of your subscriber base, you can focus on the quality of your content to increase the value it’s being sold for.
This does two things:
- Quality is valued higher than quantity
- Creating for a smaller, loyal community that appreciates your interests becomes more lucrative than ever before
Expanding on the second point, turning your content into a commodity means it becomes something that can be resold by the owner. I can’t resell my subscription, but I can resell a video NFT I bought last week for more than I bought it.
This has a lot of implications and before I get into them I should mention another super power some NFTs have.
NFT royalties
NFTs can have royalties applied to them so the original creator receives a percentage of all future sale. If you sell a music NFT for $10 tomorrow and someone else sells it for $100 next week, you still earn 10%, 20%, or 30% of that sale.
It might seem a little messed up that someone could earn more reselling your content than you earned on the original sale. But this ultimately works in your favor. If I buy a song you mint as a NFT, I’m incentivized to promote your work if I want to sell it for more meaning that buyers are motivated to spread your brand.
This model also allows people to speculate on creators and influencers for the first time.
Buying a music or video NFT by a small creator or influencer means a) you’re a fan of their content and early adopter, or b) you’re speculating that this person is going to get big and their NFT will be worth much more as a result.
What’s great about this model that’s also different about speculating on stocks is that you can do something to make this happen as a supporter. You can share their content, write about it, or create your own content about their work. You don’t have to passively hold a NFT and hope they get big, you can make an impact and share in their success.
Even early fans who bought your NFT just for the content itself benefit because if the value of your music or videos grow, they end up with a NFT that they may have bought for $10 that could be worth $1,000 in a few months. And thanks to NFT royalties, you still see a percentage of every sale, forever.
Your Content, Your Platform
Today’s major content platforms profit when your video, song, or post goes viral because more eyes means more opportunity for ad revenue. You get whatever cut they decide because they effectively own your content and you need their platform for more discovery and views.
YouTube: You retain all of your ownership rights to and videos you upload, but when you use the site you grant a limited license to YouTube and other users.
NFTs allow you to take back ownership of your content and profit from all the revenue it generates. Token gating your content with a NFT allows you to host your content on a decentralized network instead of a company’s database and sell directly to your audience instead of through a middleman.
Start Doing All This Today
You knew I was teeing up for the part about where you can do this today. And as par for the course, it’s also a thing I had a hand in building.
So how you ask!? At MintGate.io! My team and I have been working hard over the last year to make all the above a reality. And with the recent launch of Rarible Protocol, all the above is possible today!
The protocol allows us to bootstrap all the marketplace features so we can build the best custom token gating service for NFTs.
Create NFTs for exclusive videos, music, websites, & blogs. All with zero gas fees and with royalties for the creator on every sale.
Why lock your content on a centralized platform for a fixed rate when you can gate it, mint it, and let your community trade it in a truly free market on an open blockchain?
On MintGate, you can upload videos, music, or other content and mint an NFT that gates access to it with zero gas costs. Once made, it’s immediately listed for sale on MintGate and Rarible where anyone can buy it to access your exclusive content. When they’re done, they can resell so someone else can access your content. And with NFT royalties, you still earn a percentage of these sales.
- Earn royalties on every sale
- Financially reward your community for sharing & reselling your content
- Share your success with your community
- Grow together with truly aligned interests in your brand’s success
Summary
NFTs are the means for a grassroots movement to become your own platform.
If someone buys your NFT to access your content, they get to view your most exclusive and highest quality work. When they’re done, they can sell it to someone else who wants to view it. If you continue producing great content, demand for your work increases but only a limited supply exists. More demand and low supply equals higher prices for what you produce, with early access buyers benefitting from your continued efforts by selling at a higher price than they originally bought.
And to top it all off, you also benefit from all these people reselling your content thanks to NFT royalties! Whenever someone sells your NFT to someone else for access to your content, you earn a percentage of royalties. On every sale. If you sold your NFT for $5 and that buyer sells it for $500, you still earn 10%, 20%, 30%, or even 50% of that sale.
If you only made 50 token gated NFTs sold at that price at any point in time, that’s $12,500 for one piece of content you might have made 5 years ago. All the while, you’ve been producing even more, higher quality work that’s selling because of your track record as a creator.
