It’s been a tumultuous few years for NFTs. From humble beginnings to its explosive $20B year in 2021, NFTs proved that digital scarcity was a concept people understood and valued. Not everyone took to the idea so easily, which is why I wrote The NFT Handbook to bring non-technical people up to speed on the technology.
Of course, the NFT market has “come back to Earth” since the hype in 2021. Daily million-dollar NFT transactions aren’t topping the headlines anymore. The shock and awe factor has worn off.
But even though the fanfare has calmed, the technology remains. Smart contracts are still poised to change how we transact goods and services both online and offline. NFTs are still positioned to disrupt physical and digital asset markets.
I’ve seen this market go through many iterations. When I started the world’s first digital art marketplace on the Bitcoin blockchain in 2015, the “NFT” moniker hadn’t been created yet, and the primary value we foresaw of this technology was helping digital artists sell their files. You can see how I addressed this imminent industry back in early 2016 in the video below.
By 2017, projects like CryptoKitties and CryptoPunks were pioneering new ground for digital art on the blockchain, showcasing what was possible with digital-native collectibles. Eventually, Axie Infinity would prove another use case for NFTs, using the technology to power asset scarcity in video games. And, of course, today, NFTs have been used in everything from live event ticketing to powering real estate transactions to facilitating the sale of a barrel of wine.
Watching the growth of this technology over the years has been very gratifying. And there’s still so much room for NFTs to grow into. The U.S. Patent and Trademark Office is just starting to study NFTs and determine how they’ll recognize them.
NFTs may be in a down market, but taking a long-term view is important with this tech. Digital scarcity is such a powerful concept with wide-reaching implications for the future of the Internet and consumer behavior.
Granted, it can be hard to know what to pay attention to in the NFT space. Having done so much research when writing The NFT Handbook and continuing to stay engaged in this community, I have a good BS detector for separating the important developments from the frauds. If you want to stay up to date on the things I find fascinating, you can find my notes on NFTs below:
If you need more convincing, these are the 7 reasons I’m still bullish on NFTs.
NFTs for the Masses
When NFTs reached their peak trading volume in 2021, less than 2 million unique wallets were trading NFTs. The vast majority of that figure was the million-plus Axie Infinity users. Furthermore, that figure doesn’t account for individuals having multiple wallets.
The point is that, at most, only one in every four thousand people globally has bought or sold an NFT. That’s nothing. Look at the noise NFTs made with this small of a user base. Imagine the impact of this technology at scale.
Frankly, corporate involvement is necessary for finding a critical mass for NFTs. That’s why developments like Instagram’s NFT marketplace, Nike’s custom NFT wearable platform, Reddit’s free avatar NFTs, and Starbucks' NFT loyalty program have so much potential to change the perception and use of NFTs. At the minimum, it’s helping millions of people acquire and learn how to use a blockchain wallet.
My rationale is that the next phase for NFTs is simplicity. For NFTs to reach the masses and, thus, the non-technical people, we must remove all of the complexities of transacting crypto, managing wallet keys, and signing transactions. When you do this, you have an NFT success story like LaRussell’s.
LaRussell is an independent artist without any ties to major record labels. And what’s interesting is that he’s monetizing in the most independent way – through NFTs. He sold 1,200 NFT albums in 24 hours without mentioning the word NFT. – Everydays 46
Similarly, Tim Draper, has a theory on what could cause a breakout year for Bitcoin, which I think can also be said of NFTs:
Draper's rationale for bitcoin's breakout next year is that there remains a massive untapped demographic for bitcoin: women. "My assumption is that, since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break," Draper said. – CNBC
The Next Side Hustles
I can’t mention a list of reasons I’m bullish on NFTs without commenting on their impact on digital creators. NFTs provide a new stream of revenue for digital-native creators because they can finally create scarcity for their digital files.
I just talked about LaRussell (above), a rapper that used NFTs to sell his art directly to his fans without any middlemen taking a cut. I love mentioning how CK Bubbles has paved a new path for nail technicians in the metaverse, designing and selling wearable nail art NFTs. Go to any NFT marketplace and sort by recent sales, and you’ll find thousands of artists that are earning a living by selling digital files.
This is the future of side hustles. Selling scarce digital files. Art, metaverse wearables, in-game assets, consulting sessions, historical documents, you name it. If it’s a digital file, then it can be an NFT. If it’s an NFT, then you can create a market for something natively digital.
Own Your eBooks
If there were ever the perfect use case to showcase the value that NFTs provide, then it would be eBooks. And yet, it’s rarely discussed alongside the popular use cases like digital art, fractionalizing digital assets, selling real estate, and issuing event tickets.
As an avid reader with nearly 1,200 eBooks in my library, I’m eager for mass adoption of this new NFT standard in books. I’ve never been able to sell or send a single one of my eBooks once I finished it. So that alone is an advancement I welcome.
eBooks are the best use case for NFTs because it’s a form of digital ownership that people are already familiar with and would recognize the instant benefit of an NFT standard for them.
There are a few platforms working on eBook NFTs. It’s going to take a lot to compete with Kindle. Still, it’s one of the areas that excites me for the future of NFTs.
Seeing NFTs impact real-world industries show the depth to which NFTs will change the world.
Back in September 2022, the University of Nicosia became the first institution to put a college course on the blockchain, showcasing how college degrees could one day be NFTs. Currently, credentialing is a free-for-all on the Internet – like how of the 7,000 employees who say they work for Binance on LinkedIn, only 50 actually work there. NFTs will solve this problem in the future.
Transacting physical real estate has changed completely with the blockchain.
Last year, I purchased a plot of land in Arizona with an NFT. I never visited the land. I didn’t have to contact the landowner to negotiate a deal. There were no agents or brokers involved. It was the simplest major physical asset transaction in my lifetime. And there are entire services dedicated to using NFTs in real estate transactions as a means of removing the laborious process of underwriting, appraisals, title searches, and preparing deeds. NFTs are the future of Zillow.
NFTs are not just for digital experiences. They have real-world utility. And we’ve seen so many interesting experiments in this realm, like Gary Vee issuing all of his VeeCon tickets as NFTs, Starbucks transitioning its loyalty program to the blockchain, or SoFi Stadium gifting all Super Bowl LVI attendees NFT memorabilia. NFTs allow for an interesting convergence between online and offline in ways an app or website cannot.
There are so many useful facets of NFT smart contracts for artists and the art world. Automatic perpetual royalties. An impenetrable means of preventing forgeries. Showcasing the provenance and ownership history of art pieces. And the ability to create editions. All are great benefits to artists.
But one of the most fascinating features is the programmatic NFT. This is dynamic artwork programmed during the smart contract phase, which allows for an original piece of art to change and evolve over time.
For example, OG:Crystals is a programmatic NFT project where the NFT artwork changes every time the NFT is transacted. Furthermore, the change is coded to react to the wallet history of the parties involved. In other words, it’s a piece of art that changes based on who owns it. That’s the power of programmatic NFTs.
A more simple program is the CAN YOU HODL project, which will only reveal the NFT artwork once Ethereum crosses $5,000 per Ether.
Async is an entire NFT platform dedicated to programmatic NFTs, which allows artists to sell divided pieces of artwork and set up multiple ways for owners to change what’s pictured in their section of the artwork. The result is a canvas controlled by the owners of an artwork.
Why do programmatic NFTs make me bullish on NFTs as a whole?
It’s because it’s unique to NFT art. No other medium can facilitate this type of dynamic change to the artwork without the artist actually changing the work themselves. And I feel there’s still so much to be explored with programmatic NFTs.
Fair Video Game Models
Gamers are projected to spend over $140 billion on in-game purchases in 2022. They’re buying character skins, weapons, extra lives, new maps, and all sorts of additional content that alters the experience of the game. But it’s a one-sided marketplace since gamers can never resell their in-game assets.
NFTs have changed this paradigm for gaming, creating a model where all game parts can be scarce and tradeable assets.
After Axie Infinity pioneered the Play-to-Earn NFT gaming model, where gameplay is rewarded with NFTs that users can resell, a wave of developers and investors flocked to this NFT use case. It’s easily the most built-out category of NFTs because the gaming market is so lucrative.
The result is a huge variety of new video game models and mechanics.
A company called Limit Break raised $200 million to build a game called DigiDaigaku that will reinvent video game economics and gameplay as we know it. Their new model is called Free-to-Own, which centers around the premise of distributing all in-game assets to people for free, and the game earns a royalty on all player transactions. Thus, it’s a free market gaming system where the developer's and user's interests are aligned. – Everydays 12
NFTs are changing video games as we know them. And it’s a super high ceiling for possibilities.
NFTs have been lauded for their ability to form online communities. PFP (profile-picture) projects like Bored Apes, CryptoPunks, Nouns, Moonbirds, and Doodles all have dedicated owners who wear their ownership in the NFT brand with a badge of pride.
Furthermore, using tech like Unlock Protocol, these NFTs can act as access tokens into exclusive chat groups and experiences. Thus, the NFT literally gates access to participating and engaging with the community.
But taking this one step further is using the NFT as a means for organizing an organization.
Take CityDAO, for example, which is building the first decentralized city in Wyoming. In order to be a citizen and be able to make decisions on the road to building this city, you must own one of their NFTs. The NFT sales also fund this mission. They’ve effectively created an organization NFTs are central to membership, decision-making, and ownership.
Fan-Controlled Football also comes to mind, where they issued NFTs that correlated to ownership of a football team. Owners could help decide on coaches, players, team mascots, and other “front-office” types of decisions.
And then there’s the first fan-owned TV network, Mad Realities, which produces a variety of shows, except with a twist. Fans that own their NFTs can vote on and control things that happen in their dating show, such as what outfits the contestants wear.
Overall, NFTs are integral to the idea of decentralized autonomous organizations where the community of owners controls an entire business or entity.
And that concludes the 7 reasons I’m still bullish on NFTs. I keep a close eye on new developments in this space and periodically include them in my Everydays Notes. If you want more of my notes on NFTs, you’ll find them here: