NFTs are a BFD if you Heed the Right KPIs
People. You may be rediscovering them.
For two nights in late-April 2021, my wife and I partied like it was 2019. Two dinner parties. (Worry not, upper 48 – we were all very vaccinated) All of us were from different work-week arenas: finance, law, medicine, real estate, seafood pack and ship, sustainability and speech therapy.
Yet it wasn’t long before the topic swung around naturally to the acronym du jour: NFTs. Non-fungible tokens – a means to apply a certificate of authenticity and place scarcity to a digital asset, and Popularized by Beeple, 3lau, DeadMau5, A$AP Rocky, Gronk, and so on. In essence, minimizing supply to drive up demand.
As the famous and the media have latched on, fascination grows as mega-sale begets mega-sale.
“It’s art - stuff - you can’t touch or feel!” is a common refrain. This is the camp that most of the world is in presently, both fascinated and somewhat dismissive that it’s a fad that can’t last.
The simple fact is NFTs may not last. But, the longer the notion gets oxygen, the more validation there is for the technology that powers it. And it’s this that has blockchain evangelists and technology VCs extremely intrigued as we enter what many are calling the new Internet (coined Web3). And, the big bet is that this next decade will drastically shape our personal and professional lives. As Chris Dixon, General Partner at Andreessen Horowitz, said in a recent episode of Invest Like the Best podcast, “we think of it very much in this tradition of the internet, PCs, mobile phones, as opposed to when you read some of the press, they kind of put it more in the context of finance or something. There are financial aspects to it. But I believe at its core, it's a computing movement.”
NFTs are Just a Use Case
Imagine, for a moment, that you played Angry Birds on an early iPhone and determined that was the extent of innovation on the device. Angry Birds (despite being really unclear on its scoring system) started to create an awareness and behavior change for the time-starved, visual learners among us. It changed our interaction model with technology with swiping and tapping. It created a world with a story, teaching us that for $.99 we could buy more maps, emotes, commerce add-ons in the App Store. And, in a decade, two major motion pictures cemented its spot in culture. For many, Angry Birds was their entry point into an entirely new technology.
NFTs are creating one of many entry points into the underlying blockchain technology. They’re creating a new platform for content creators to share, and all that’s creating a lot of excitement, or curiosity at the very least – and an attention-grabbing use case for the technology that powers it. It’s safe to say use cases will look incredibly different in the coming years.
A True Emerging Technology?
Content, Community and Commerce are three of the pillars that drive adoption for an emerging, disruptive technology. The application layer, or services that are built between these pillars, dictate the size, staying power and longevity of technology graduating from emergent to ubiquity.
NFTs are a use case bringing these pillars to the foreground and we are seeing entrepreneurs and investors starting to build services and attracting the content creators to strengthen their viability. While the jaw-dropping sales of creators is grabbing our intrigue and the headlines (like Beeple’s $69 million NFT sale at Christie’s), what and how the owner of that authentic work can showcase, license or loan out is still in early days. Mark Cuban’s Lazy.com is an early days “locker” to show your NFT collection. Another first: Greg Mike, an Atlanta-based street artist, created the first physical-digital screen gallery showcasing curated NFTs from around the globe with Outfront Media and Nifty Gateway.
“I wrote this blog post, I guess a decade ago, called The Next Big Thing Starts Out Looking Like A Toy,” Dixon said. “I was making the observation that so many technologies through history start off looking kind of silly … But then it gets better and better and grows. The early telephone barely worked and went less than a mile. But these things get better. And you have to project out how they grow.”
(Source: Statista.com) From 2019 to 2020, the NFT market nearly doubled. By the end of March 2021, the NFT Market has already increased 1,785%
NFT Eye Popping Numbers:
- Aku: Name of the first NFT optioned artwork tapped for a scripted series created by former MLB Player Micah Johnson.
- $7.5B: At the time of writing, this is the valuation of Crypto Kitties and NBA TopShot creator Dapper Labs.
- $100: Before a record-smashing $69M NFT digital sale, the artist Beetle had never sold artwork higher than $100. Auctioned through Christie’s, Beeple made enough in his Christie’s backed auction to make one of three of the richest artists in the metaverse.
- Approx. $500,000: Zoe Roth, now 21, was photographed as four-year-old looking at the camera while a neighbors house was aflame. The photo, dubbed the “Disaster Girl” meme recently sold for 180 ETH, or nearly $500,000.
Chris Dixon - The Potential of Blockchain Technology - [Invest Like the Best, EP. 221]
Invest Like the Best with Patrick O'Shaughnessy