Cryptocollectibles Are XLNT, But Nobody Knows What’s Next
rare.af was hosted this weekend; the RARE protocol team put together a great event, hosting the best minds in digital art, verifiable ownership, and cryptocollectibles.
We had panels, talks, and #networking with thoughts from the minds behind CryptoPunks, CryptoKitties, Decentraland, dada.nyc, and many more. Jessica Angel from Truebit was there to talk about the Doge-Ethereum art project (which, side note, is going to be the coolest thing in the world, and you should get involved).
There’s a lot of potential in the room. Excitement in the air. This is a new paradigm of ownership. Art, collectibles, verifiable ownership, atomic transfers, you name it.
And there’re a lot of opportunistic people looking to take advantage of that potential. And there are a lot of greedy speculators with money to throw at this concept.
And nobody really knows:
- Is this idea that’s been around for a while actually suddenly valuable? and
- What’s next??
No idea. ¯\_(ツ)_/¯
What are Cryptocollectibles?
Cryptocollectibles are anything that uses the blockchain as the source of truth for ownership. As a side effect of using this technology, we can
- cryptographically verify ownership
- atomically transfer assets
- track ownership history and usage rights
- prove scarcity; the code can say “only create 100 of these things”
- disintermediate traditional publishers of digital content
What are people making of this concept?
- digital art of various “scarcity” and mediums—CryptoPunks, Rare Pepe, digitally-signed works
- trading card games—Spells of Genesis, Rare Pepe
- in-game items— CryptoKitties
- rights and ip history/tracking
Why are collectibles and digital art valuable?
- Emotional Value—The personal, irrational, and intrinsic value I get by owning something and showing it off. Of note, no cryptocollectibles are worth anything without emotional value.
- Speculative Value—Hey, someone might want this more than me later. Verifiable scarcity contributes to this, as well as novelty. If this is the only property your item has, it’s no better than a tulip (but tulips have some emotional value, at least, cause they’re pretty).
- Utility Value—Some things have utility like trading cards, CryptoKitties, in-game items, and more.
The vast majority of art, collectibles, and similar won’t have any utility value.
A Societal Understanding of “Ownership”
The history of art ownership started as “physical, rare things” like paintings, and added “digital, easily copied things” like music and photos. Now we have “digital, rare things” but it’s hard to grasp the rare thing concept without the physical part*. I consider myself pretty forward thinking in this space (as someone with strong emotional attachments to my first CryptoKitties), but it’s still weird.
*outside of video games like Runescape or WoW
This cultural shift will take time. Years. Like, 5–10 of them to really solidify.
But there’s a concept that can help bridge this gap: OpenDime. OpenDime is a “hardware wallet” of sorts that generates a private key that is only revealed when the device is physically (and visibly) broken.
Joe Looney of the Rare Pepe Directory printed a Pepe picture out, slapped it on a bag, transferred the Rare Pepe to the OpenDime, and put it inside the bag. Now, if you want to transfer the Pepe away from the OpenDime, you need to physically break it to release the private key.
What’s interesting about this is that, now, the physical object is the collectible, backed by all of the tech that secures the digital version. This whole concept has come full-circle. And it’s really, really interesting. The first jump in imagination is trading cards backed by OpenDime. Or, hell, physical dollar bills that have 1000 Doge on them. Or a photo frame that contains the private keys to the art contained within. Very, very interesting.
Ownership as Access
You all remember the Wu Tang album, right? Only one produced. $2,000,000. Ownership of the album is the access key required to listen to it; if you don’t own it, you don’t hear it.
The same concept can pretty easily apply to cryptocollectibles; any content provider can ask that a user sign a message with their private key, recover the key from that signature, and check ownership against the backing blockchain. Now you can release music attached to cryptocollectibles—short stories, poems, movies, entire video games—or any sort of exclusive media you can think of.
A Note on Open Networks and Curation
In general, validation is a tough problem for open platforms. How do you confirm that things on your platform are high quality? That the submitter owns the right to artwork? That the collectible you’re selling is the original, and not a copy of the contract? That every song in this playlist is actually R&B?
In a traditional, centralized, “open” network, the company that runs the network generally takes on this task—it’s more efficient, cost effective, and they retain control over content at the end of the day. Think about how YouTube screens and audits video uploaded to the platform and can respond to flags.
In an uncontrolled open network where user-generated content is the key value prop, curation is the default solution. “We’ll let the market decide” and “the users will have to do diligence on submissions; it’s an uncontrolled, open platform after all”. Think about how reddit engages its audience to curate content by subreddit and value.
Two points to take away from this:
- We’re assuming that the network can sustain itself in this way and that curators are properly incentivized, and
- Token-Curated Registries and other curation protocol (like Proof of Steak) will be increasingly invaluable in the future. We need generic TCR infrastructure and a parameterization playground to iterate on these ideas. Looking forward to the progress by Mike Goldin and TwoBitIdiot in this space.
I think cryptocollectibles are excellent. I think artists are excellent. And I think verifiable digital ownership is fucking excellent.
So excellent, we’re making XLNT. XLNT is:
- A cryptocollectible wallet and showcase,
- A cryptocollectible auction marketplace,
- A community for cryptocollectibles,
- A social, p2p trading layer for cryptocollectibles,
- All built on the open standards you know and love, and
- A series of partnerships and experiments to answer that question of “what’s next”.
And it’ll have the best damn blockchain UX you’ve ever seen.
✉ If you’re the kind of person that has strong opinions about this and is interested in working with us to build XLNT, drop me an email at matt [at] XLNT.