Opportunities Abound Within The Fast-paced World of Web3 and NFTs

Did you catch the 2022 SuperBowl? I thought the cute FTX SuperBowl advertisement starring Larry David humorously illustrated the current crypto sentiment; “ignore the haters, the naysayers… don’t be a Larry!”.

Larry – yes, that was me back in 2017 at the EthWaterloo hackathon. I was in denial when something called CryptoKitties won first place. CryptoKitties, a series of playful Non-Fungible Tokens (NFTs) soon took the tech and art worlds by storm. These crafty critters made global headlines when their popularity almost broke the Ethereum blockchain. It was a moment in time where art and technology combined to create something new and intensely interesting.

And their win at the ERC721 hackathon should have been my “Ah-Ha” moment, but at the time I just couldn’t get my head around how programming “uniqueness” into code would fundamentally disrupt the world of art. Fast-forward to 2021 and Bloomberg reports the NFT art marketplace tops $41 billion in sales. By contrast, “conventional” art sales were $50 billion the previous year.

Why would someone pay almost $3 million for an NFT of Jack Dorsey's first tweet ,"just setting up my twttr"  when the tweet is freely shared online?

Why would anyone pay $69 million for an NFT created by a new artist and sold at the Christie Auction House when you can right-click and download the same one?

Great questions. Well for starters someone did pay those amounts in both cases. You see, NFTs are a nascent market with almost unlimited room for iteration and innovation. Today is all about NFT “experimentation” and amidst the rapid change that is underway, there lies opportunities for those curious and adventurous enough to try something new. 

Next, many people think NFTs are nonsense because they are intangible - you can't actually touch them. Yet intangible assets make up 90% of the S&P 500 market value. In the last quarter-century, intellectual capital, another intangible asset has emerged as the leading asset class. Finance experts believe that intangible assets are better tools for making money. 

Knowing this, isn’t it plausible that NFTs will become an entirely new asset class?  

Pamela Norton, CEO of Borsetta Labs, is literally banking on it. Her company targets the $31 trillion dollar intangible asset market to digitize and title assets for the Web3 marketplace. Norton is creating a new asset class, the NFTt or Non-Fungible Title token and the TitleChain NFT IP platform is gearing up to secure the ownership of patents, trademarks, and copyrights with the NFT digital title. Norton began R&D on Titlechain in 2018 and is commercializing their patent-pending technology to bring intangible asset ownership on the blockchain with NFTs. 

What is an NFT? 

NFT stands for a non-fungible token and represents a unique asset or proof of ownership on a blockchain network.  

"NFT is often not the art itself, but rather, as one expert put it, like "directions to the museum" where the art is being held." Ycombinator comments

"Ultimately, you're buying a collection of metadata defining what you own. NFTs use links to direct you to somewhere else where the art and any details about it are being stored. But what happens with NFT links break. Expensive 404 error." This blog won't get into the storage and maintenance of links." Ycombinator comments

Putting the “Fun” in Fungibility

Core to the concepts of NFT is fungibility. If I lend you $10 and you pay me back $10, I don't need to receive the exact $10 I gave you - I will take any $10 bill (or even two fivers). Money is fungible; it is interchangeable.

Now if I ask you to ARTsit my priceless Mona Lisa while I'm away. When I return, I want the exact Mona Lisa you ARTsat. The Mona Lisa is non-fungible – it is not interchangeable.

Cryptocurrencies like Bitcoin and Ethereum are fungible. For example, on the Ethereum network you can create a fungible token (ERC20 standard). You can also "Mint" non-fungible token (ERC721 standard). Minting a token with this latter standard is known as minting an NFT.

Minting is a term used when you communicate with the blockchain to secure information about your NFT. Minting transforms your digital art file into a digital asset on a blockchain.

The actual digital artwork itself is NOT stored inside the NFT. The NFT is a hyperlink or a pointer to where the digital media is hosted. Most blockchains can create non-fungible tokens, yet they can only store limited data. Think of an NFT as your digital "Certificate of Authenticity" that lives on your phone or computer, and there is no physical or hard copy. One-of-a-kind attributes like proof of ownership can be programmed into this digital certificate of authenticity. An NFT can take the form of a JPG, PNG, GIF, WEBP, MP4, CLB, OGG, GLTF, WAV or MP3 file.

The bottom line - NFTs are disrupting art, media and the intellectual property marketplace. As technology evolves, issues will be solved and new opportunities created. Those who create and innovate early have a first-mover advantage, for a while anyway. If you are a creator, I love this piece by Kevin Kelly. 

"To be a successful creator, you don't need millions. You don't need millions of dollars or millions of customers, millions of clients or millions of fans. To make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor you need only thousands of true fans" – Kevin Kelly (2008), 1000 True Fans