This article was originally published on Medium by Alan Smithson, with editing by Alex Colgan and Chris Muise, on May 6 2021
Now that everyone has a supercomputer in their pocket, memes are inescapable. In the currency of ideas, a random, unassuming stock photo of a guy on the street ogling an attractive woman while his girlfriend looks on, shocked, can become a cultural touchstone. (As can a silly, pixelated fusion of cat and pop tart.) The worlds of art, music, technology, finance, entertainment and of course, shoes, are blending together in ways previously unimaginable, but now, commonplace.
In a world where “information wants to be free” and content is endlessly shared and remixed, how can creatives earn from their work? Chris Torres, the creator of Nyan Cat, managed to turn a tidy profit recently, auctioning off a high-res update of the original .gif file, which sold for $590,000 as an NFT.
What’s an NFT?
An NFT is a “Non-Fungible Token,” a blockchain-based proof of authenticity and provenance for digital (and potentially physical) items. In short, it’s a way of treating a digital asset as a one-of-a-kind original piece of art.
Think of the Mona Lisa. Sure, you can find images of it in books, on posters, and it’s easily searched for online. But that doesn’t take away from the fact that the real, original version that Leonardo da Vinci toiled on with his own two hands is sitting behind glass in the Louvre, earning revenue from visitors paying to see it in person. Originality is a non-fungible (irreplaceable) quality.
The Nyan Cat NFT is the same idea, only digital. And it stands to give the creatives behind these modern cultural touchstones more bargaining power to earn from their creations.
One major part of digital NFT’s is that original artists can benefit from a percentage of all future sales of the art, no matter how many times it is resold. This alone makes NFT’s a delicious looking option for creators of incredible works.
Are NFTs just a fad?
On the heels of Nyan Cat’s auction, creators are coming out of the woodwork, revealing they too will be selling future projects as NTFs. Kings of Leon will be the first musicians to release an album as an NFT. Kevin Smith plans to release a future film in the same fashion and NBA Top Shots are selling highlight videos for thousands of dollars to adoring fans.
But as with any new paradigm shift — especially in the live fast and loose era of the Internet — NFTs are already the subject of major scrutiny, and even scorn. There are already memes aplenty, perhaps ironically, about the obvious pitfall of a one-of-a-kind digital asset; just copy it!
This joke works, if we assume we will only consider something “real” as a society if it’s made out of physical components — atoms and molecules — and that digital items will always be seen as somehow “fake” or inauthentic. But as the world around us integrates more and more into the Metaverse of XR, will that way of thinking stay true?
And will the NFT memes ever stop?
What is XR?
XR is short for “eXtended Reality,” an umbrella term that encompasses everything from interactive 3D, virtual, augmented and mixed reality, and many other technological frontiers. Little by little, these technologies are becoming part of our everyday lives.
Iconic brands like Instagram, Facebook, Snapchat, L’Oreal, Microsoft and Apple have all invested billions of dollars to bring this new technology to the world. They are also building the VR infrastructure we may one day inhabit in a way similar to (but hopefully less dystopian than) Ready Player One. In that film, digital items like Anorak’s Almanac and the Gregarious 120 are as valuable as anything in the real world, if not more so.
No one is suggesting that NFTs will turn anyone into Gundams or MechaGodzillas, but they potentially have the power to reshape the digital and financial landscape in ways we don’t yet fathom, both socially and economically. Sure, it seems silly now to sell a meme that’s already lived rent-free on the Internet for a decade. But Kevin Smith’s film could, in theory, be kept private by whoever buys it — a movie for their eyes only. And its use isn’t limited just to making a profit; an NFT is also an excellent way to track the passage of a digital asset from one user to the next, and to follow how it’s altered along the journey. As new digital things are made with the option of NFTs on the table from the start, like it or lump it, you’re going to have to start thinking with them in mind if you want to be a digital entrepreneur.
It has even been proposed that physical collectable items could be enhanced with bonus digital content as they track the authenticity of the item through its life.
NFTs and the future of the Metaverse
NFTs are important to the future of an open Metaverse, because they give a standard value to digital objects, art, music and experiences that typically would contain little to no provenance or traceability. NFTs give creators a new way to share their creations with as many — or as few — people as they want, while also making a percentage of every future sale of the asset.
This could be a huge game-changer for the creative community, which has been marginalized and underpaid for many years. Organizations like record labels and auction houses have been profiting handsomely from selling artists’ work multiple times, while the artist gets a fraction of a cent through streams, or nothing, in terms of the resale of art. NFT’s are the promise of a more fair distribution of profits made from a digital art creation.
Of course, like anything, the NFT realm isn’t flawless, and it’s important to understand the downsides in order to decide if it’s the right format for you. For one, it costs real money — FIAT currency — to set them up, and in most cases, you’ll get paid in cryptocurrency, which is another hurdle; transferring your earnings to a currency you can actually use for things like food and rent. (Nyan Cat technically sold for 300 ETH, which translates to $590,000 USD.) Crypto is still more an easily transferable investment than a proper medium of exchange.
Recently 3D company RTFKT raised $8m from rockstar VC firm, a16z. They sold over $3m worth of digital shoes in their first drop and even made a commemorative pair of a16z branded shoes with the phrase from the VC’s ethos ‘It’s time to build’
But that’s just the NFT landscape as it is right now, a “fringe” market. As more and more institutions buy into the idea, the NFT marketplace will more easily blend into everyday life and business. Some financial institutions are already signalling their readiness, such as Mastercard offering payments through crypto-account-linked credit cards, and Paypal supporting cryptos through their digital money transferring platform.
NFT + XR = Endless Possibilities
What excites me the most about the potential of NFTs is in their usefulness to businesses wishing to create a digital catalogue. Fungable (interchangeable) and Non-Fungable (unique and unchangeable) tokens can be assigned to experiences for marketers to track the effectiveness of a campaign or a trainer to track the performance of new hires or retailers to prove provenance. The possibilities are limitless and as both XR and NFT’s mature, I am certain we will see a new realm of use cases popping up all over the world.
From digital shoes to 3D art to music concerts, the demand for collectable, limited quantity digital goods is increasing exponentially. The next few years will show us an incredible path towards living and working in the Metaverse using crypto currencies and attending virtual performances. At least we will have nice shoes!
MetaVRse is a code-optional platform that makes it easy to create & share interactive 3D experiences instantly on the web to billions of devices across desktop, tablet, and mobile.
The power of this web-based, code-optional platform gives creators, businesses and educators the opportunity to create immersive and interactive experiences and share them directly without App Store permissions or commissions. By bringing the MetaVRse Engine and NFTs together, we can unlock the power of XR for everyone, while providing a new way to track, share and monetize their work. MetaVRse.com
Credit: Nyan Cat 3D: https://sketchfab.com/3d-models/nyan-cat-f45a48deab2e4fd2afba383525c9478d