This week's assigned reading is a presentation by Johnathon Button and Quinn Button titled NFTs: More Than Digital Art. In their presentation, they explain how they entered the business world, specifically focusing on NFTs. After moving to Nicaragua, they established a business that donated school supplies with each purchase. Their ventures extended to other countries, including Guatemala and Morocco. Upon returning to OSU, they continued to explore new opportunities.
In 2020, they settled in Florida and observed that their most profitable investments were in Bitcoin and Ethereum. This realization led them to study blockchain technology, drawing particular interest in NFTs after a digital artwork sold for $69 million. They define a non-fungible token (NFT) as a unique digital identifier that cannot be copied, substituted, or subdivided. They further explain that "fungible" refers to assets that are mutually interchangeable, such as dollar bills, while "non-fungible" describes unique or non-interchangeable assets, like a house or a piece of art. The term "token" signifies an identifier, which plays a crucial role in establishing ownership and ensuring transparency in transactions. According to them, NFTs facilitate a free market where digital assets can be assigned value. Moreover, digital art in NFT form can be animated or dynamic, opening new creative possibilities. While the technological aspect of NFTs is interesting and offers new ways for creators to monetize their work, it is worth considering whether the push for value through scarcity is contributing to a more exclusive digital environment.
The presentation highlights how NFTs have the potential to disrupt various media industries. For example, they discuss how music can be placed on the blockchain, allowing 100% of royalties to go directly to the NFT owner. This also grants access to intellectual property (IP) rights, enabling owners to use the music freely. Albums can also be released as NFTs, offering buyers a percentage of ownership. This could potentially create a market where music is somewhat an afterthought in order to favor its economic potential.
Beyond music, they explore how the fashion industry is incorporating NFTs. They cite Coach as an example, which includes an NFT with every bag purchase. Additionally, virtual concerts have started distributing NFT-based shoes, allowing customers to interact with products in a new way. This form of advertising creates an immersive experience that motivates customers to purchase physical goods. Furthermore, some brands integrate NFTs with physical products to certify ownership and document the item's history. This enhances transparency in secondary market sales, preventing counterfeit goods from being sold. I think the use of NFTs to ensure appropriate ownership is important but this also raises concern that this is creating another avenue for status and goods consumption.
Another topic covered is the Metaverse, a virtual world where users can interact within a networked environment. They specifically mention Decentraland, a platform where users can purchase virtual land using the cryptocurrency MANA. They also discuss OnCyber.io, a service that provides virtual apartments where users can display their NFT collections. Additionally, they touch on play-to-earn games, which allow players to earn cryptocurrency or in-game items that hold real-world value. The Sandbox is highlighted as another virtual world where players can build and monetize games using Ethereum.
The presenters also discuss NFT-based memberships, such as the Bored Ape Yacht Club, where the lowest-priced NFT at the time of the speech was valued at $186,000. These NFTs serve as status symbols, akin to luxury watches or cars. Another example is the Flyfish Club, an exclusive restaurant in New York that requires an NFT purchase for entry. They emphasize that NFT memberships foster a sense of community while also allowing owners to resell their NFTs at any time.
In the realm of sports, they mention NBA Top Shot, an NFT collection featuring significant moments from basketball games. These digital collectibles can be traded and hold varying values depending on the player and moment captured. The NFL has also utilized NFTs for ticketing, allowing attendees to verify their seat and game details. A more complex use case is fan-controlled football, where NFT ownership enables fans to vote on in-game plays, effectively influencing the game’s strategy.
Finally, they introduce the concept of POAPs, or Proof of Attendance Protocols. Since NFTs can track attendance, they explain how they organized a scavenger hunt where participants collected NFTs daily to earn badges. Adidas also implemented this technology by creating limited NFTs and granting early access to members who participated in POAP events.
Overall, the presentation illustrates how NFTs extend beyond digital art, offering transformative applications across multiple industries, from music and fashion to sports and gaming. While the presentation highlights the transformative potential of NFTs, it also raises concerns about reinforcing materialistic values. The emphasis on NFTs as status symbols, like the Bored Ape Yacht Club, seems to promote consumerism and a focus on acquiring expensive, exclusive digital assets. This exclusivity could overshadow the societal potential of blockchain technology, such as decentralization and democratization of content. As the NFT market grows, it’s important to consider whether it really solves a problem in the world or creates more.
