Web3 Wayfinding Manifesto
NFTs (Part 1 of 3)
TL;DR
The future of digital content is on the blockchain, so ownership can be proven on the internet. What does this mean? It means as we go forward, NFT innovation will continue to coalesce with Web2 market verticals and incumbents ā creating entirely new ways to experience/receive value from what already exists and what has yet to be created.
(If youāre still interested keep reading.)
Welcome to the Web3 Wayfinding Manifesto (Part 1 of 3).
This piece is all about NFTs (non-fungible tokens) and the purposeful utility they can bring to creators/businesses/brands in ways that previously were not technologically, economically, or commercially viable.
So what are NFTs? Simply put, they are intellectual property rights of digital content. NFTs are not just meme pictures that people trade on blockchains. Since 2017, digital art, collectibles, and in-game assets have been the most visible use cases for non-fungibles.
While the entire world was entirely fixated on the speculative aspect of NFTs (because art and NFTs were almost synonymous), those Web3 pioneers working closest to the sun knew the market held an inconspicuous secretā¦
ā¦there is an endless array of viable business models and plethora of pre-existing online digital content that could, can and will be placed on a blockchain using non-fungible and semi-fungible tokens.
Major Market Sectors Impacted by NFTs
The list below barely scratches the surface on the broad spectrum of digital content within major market sectors.
- Amazon, Netflix, and Hulu host over 23,000 pieces of on-demand video content. Disney+ and HBO Max have added nearly 10,000 more.
- AR and VR creators are busy populating the Metaverse with 3D models. Marketplaces like TurboSquid are offering 60,000 3D models today and are poised for growth.
- In music, the world releases about 100,000 albums every year, each with multiple tracks that can generate millions of plays. Recording artists are moving toward self-publication models on services like SoundCloud and Audius and toward self-distribution models like Spotify.
- Shutterstock is home to over 330 million stock photographs which can be licensed and collect royalties.
- Over a billion domain names are registered each year, with 400m registered in the first quarter of 2017.
- We upload nearly 1.8 billion images per day to the Internet, or a stunning 657 billion images per year.
- In social media, we generate around 200 billion tweets per year, some of which accrue tens of millions of views and become iconic pieces of history or popular culture. There are over 600 million blogs on the internet today.
Even with this strong evidence, we still shouldnāt think of NFTs as tokenized digital content itself. A core value insight is that NFTs are much better understood as encapsulating intellectual property rights to the assets they describe.
Simply put ā if we cannot truly own digital content, or easily license it, we will almost surely never resell it. Blockchains and NFTs are changing this state of affairs dramatically thanks to Web3 innovators and early adopters.
NFT Utilityā¦Yeah Not So Much
The promise of future value, purchased today, deliveredā¦maybe?!?š¤
NFTs that offer utilities are a type of token that can be used to buy, sell, or trade digital assets for the purpose of receiving some expanded form of value (post-purchase) such as access, event tickets, or the ability to unlock additional goods and services on a blockchain-based platform.
That challenge with selling the roadmap to your community ā thereās still a lot within Web3 that is outside your control. The evidence behind this would turn this post into a ~20 min read, so Iāll provide 5 short setences to the primary reasons why utility tokens havenāt had much utility at all.
1ļøā£Lack of awareness: Most people are unaware of the existence of NFTs with utility, let alone their potential benefits. Explain utility to someone who doesnāt own an NFT and youāll get my point.
2ļøā£Lack of understanding: Those who are aware of NFTs with utility often donāt understand how they work or what they can be used for. This, or the dates, terms or conditions of availability promised to the community has changed. Which leads us to trustā¦
3ļøā£Lack of trust: The fact that NFTs with utility are often associated with scams and frauds doesnāt help to build trust among potential users. The āgotchasā of blockchain sometimes are unavoidable, but when most community members donāt live in Web3 everyday, these gotchas feel more like a lack of transparency which typically results in a massive dilution of trust throughout the community and mass exodus of the NFT on secondary marketplaces.
4ļøā£Lack of adoption: Even if people are aware of a collection with a reputable brand or community and trust them, they might not have any incentive to actually use them later.
5ļøā£Lack of REAL utility: In many cases, NFTs with utility simply donāt offer any compelling advantages that can be actualized, understood or provide owners value tangibility.
While this represents the journey thus far, Web3 pioneers are starting really find their way. Projects are focused on true community building. Community members are stepping into help users bogged down by blockchain friction. Roadmaps are simplifying which in turn makes them easier to deliver.
Conclusion and Web3 Wayfinding Part 2
Digital ownership is changing the world by allowing individuals to own their digital data and content. In the very near future, much of the early-stage friction will be mitigated thanks to pioneer Web3 wayfinders who are seeking ways to reduce fraudulent activity and increase trust in web3 transactions and communities.
Blockchain as a digital public good will, in time, create a more efficient and secure internet by reducing the need for intermediaries. This enablement of new business models will create new economic opportunities for the empowerment of humans globally.
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