I Made Over $600 in 3 Hours with Non-Fungible Tokens on the Blockchain
Non-fungible tokens (NFTs) are a new, additional funding model for digital creators. As someone who likes to make things and put them on the internet, I decided to give it a shot. I’m not a developer, and yet it went surprisingly well.
Art On The Blockchain
On April 20, 2018 I uploaded the following animation to my YouTube channel and used superrare.co to turn an image of the lead character, “Peatar,” into a non-fungible token on the Ethereum Blockchain. After installing MetaMask and getting some ETH, turning Peatar into a token was as easy as a few clicks, and then, almost magically, the Peatar token sold… in just over 3 hours for 1 ETH (over $600 dollars at the time).
First, the cartoon for context. (Warning: It’s weird and NSFW.)
What Are Non-Fungible Tokens?
Non-fungible tokens are “a special type of cryptographic token which represent something unique. Non-fungible tokens are thus not interchangeable.” (Source)
A fungible token example would be Bitcoin or Ether. You don’t care which one you have.
Non-fungible tokens, however, are unique, so it does matter which one you have.
Take this concept of non-fungible tokens outside the art world and it becomes quite powerful. ‘Land Deed A’ does not equal ‘Land Deed B.’ I’d also argue that storing land rights on an immutable digital ledger is far more safe and efficient than the current process.
Anyway, back to art and, more specifically, Peatar. I used superrare.co to create a token that uniquely represents Peatar on the Ethereum blockchain, meaning Peatar was turned into a crypto collectible. You can use Etherscan to see when Peatar was created, and verify that he was indeed sold in just over 3 hours for 1 ETH. The real question though…why would anyone want to buy him?
“Proof of Taste” — Digital collectibles enable new relationships between creators and patrons
In buying a non-fungible token, aka an original piece of digital art, patrons not only support an artist, but now, just like in the physical art world, actually own something — a unique, time-stamped token that proves ‘they liked it before it was cool.’
Like with a physical art piece, ownership causes patrons to be economically incentivized to support and spread the gospel of the creator, because the more famous the creation/creator, the more valuable the patron’s collection.
With Peatar, perhaps the original patron thought that Peatar, or his creator, would help increase the adoption and awareness of NFTs. For my sake, I hope they’re right ;) Also, for the sake of societal structures, I hope they’re right. Non-fungible tokens allow us to think beyond just ‘cryptocurrency’ and utilize verifiable digital ownership in a number of ways.
Here are a few more ways I could see Non-fungible Tokens fitting into our blockchain future:
1 — Ticketing
Today, every event ticket is basically already a non-fungible token. We rely on companies to issue and track what are essentially a ‘currency’ for each event. And the type of ticket matters — which seat, which row, which floor. Currently, we must trade those tickets on specific platforms or within walled gardens. Most concerningly, we have to worry about buying counterfeit tickets as there is no public ledger to check a ticket’s legitimacy.
As blockchain technology and mobile wallets become more universal, it will not only be more secure, but also cheaper and more efficient for event organizers to create and distribute tickets as non-fungible tokens on Ethereum as opposed to relying upon a centralized 3rd party susceptible to scalping.
2 — Music “Digital Record Collectors”
Imagine a world where musicians can sell a “digital original version” of their album in addition to the normal release of their album.
This is an added source of revenue for the artist and for the ‘digital record collector,’ if the album becomes #1, they stand to earn a profit by owning that unique representation of a hit album.
“Sure anyone can download Abbey Road for free — but I’d still drop 100gs on the original vinyl.” — Peatar
3 — Gaming
All those in-game items players work so hard to earn — those should be non-fungible tokens! Players can then trade them amongst each other, or port them from game to game. A lot of NFT work is already being done in the gaming space. Check out this deep dive on blockchain based games: Hackernoon — Crypto’s Next Catalyst — Gaming
4 — Disaster Insurance [Land Rights]
In 2010, an earthquake devastated Haiti and destroyed the municipal buildings containing the documents that confirmed which citizens owned which land. After the destruction, citizens not only had to rebuild, but also had to reclaim their land. With no proof of who ownership, rebuilding became complicated and contentious.
By storing information on an immutable, distributed ledger, public records like land ownership become resilient to the weaknesses of data centralization — such as natural disasters and human tampering.
Other Distinctions:
Blockchain digital collectibles are better than other digital collectibles:
You’ve maybe seen those $5 limited edition stickers on Facebook. Well, those only work because they are controlled and ‘limited’ by Facebook, within the Facebook ecosystem. They must remain within the walled garden of Facebook. Under Facebook’s rules. If Facebook disappeared — so would your stickers.
Blockchain collectibles live on a publicly owned, everlasting blockchain that can create digital scarcity and track ownership of digital items. You aren’t reliant on a single company. If SuperRare goes down, Peatar lives on! #ImmortalPeatar
SuperRare is just a service provider (creating the NFT) and a secondary market place to give the NFT exposure. I could port Peatar anywhere #PortablePeatar
Why SuperRare:
I chose superrare.co for a number of reasons, but one thing I liked was that SuperRare codes their smart contract so that creators (in this case, me) receive 10% of all secondary market sales. It’s a pay-it-backwards model, meaning if Peatar is traded for 100 ETH in 5 years — I’ll automatically receive 10 ETH as the creator.
As a creator, this is even better than the physical artworld, because secondary buyers and sellers don’t have to know me, and I don’t have to trust that they will be truthful about the sale amount and send the ETH my way. Thanks to smart contracts on the Ethereum blockchain, it all just happens automatically the moment the sale takes place.
This means blockchain-based digital collectibles offer not only an additional source of revenue, but also a perpetual source of revenue for online creators.
That’s pretty cool.
Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.
