NFT is more than a bubble: It’s changing the Internet
Author: Jieping Zhang, Annie
NFTs are exploding in popularity in the cryptocurrency market, with sales of more than 2.5 billion U.S. dollars as of July 2021, up from 13.7 million U.S. dollars in the first half of 2020.
Much talk has been going on about an “NFT bubble” and there is speculation that the tens of billions of sales and investments may plummet to a shocking zero. But this doesn’t change the fact that NFTs have the potential to stimulate the growth of a new economy, and profoundly define and change the norms of the Internet.
But how will NFT define and change Internet norms? Among the numerous new mathematical specifications and technologies, why does the 4-year-old NFT have the most expandable commercial potential?
As a veteran journalist and serial entrepreneur who founded Matters Lab, the new decentralised web3 content platform based on blockchain technology, I am passionate about the self-governance of creators for true independence from any platform. Recently, Matters Lab also launched Traveloggers, the first NFT social media avatar to expand private ownership with collective creation, an experiment for mutually beneficial collaboration between content creators and collectors.
In this post, I’d like to present a brand new perspective of NFT as more than a bubble: instead, it is a new era that redefines the relationship among content owners, creators, and digital content for a fairer and freer Internet.
NFT: ownership or collection?
When it comes to NFTs, I try not to use the word “buy” but “collect” instead.
When someone purchases NFT of a certain digital content, it doesn’t mean that others can’t see the content anymore, but rather that its ownership is simply announced to everyone through the Blockchain record. The purchaser paid real money and “collected” the digital asset.
Essentially, with NFTs, you can mark the ownership of a digital asset but not monopolize the circulation. The asset continues to circulate and you reap the benefits in return. This kind of business model wasn’t easy to implement on the Internet in the past.
How traditional Internet business models fail content creators
The basic design of the Internet determines that content is published in a homogeneous data structure without a unique ID. Therefore, the entire Internet of Value is unified, like a big river. Content producers can either:
- let it flow for free
- rely on the attention that flows through their own works in exchange for advertising revenue, or
- use various disproportionate preventive tools to do some limited interception such as signing in, typing codes, prohibiting copy and paste, or setting up a paywall.
But the traditional Internet mechanism can be clumsy at times because a very simple technology can crack the interception in batches.
How NFTs revolutionize traditional online business models
In a world designed on blockchain, marked by NFT, and operated by digital currency, it is as if the homogeneous river and sea are split into countless water bottles. These bottles can be infinitely divided into ever smaller bottles that you can’t see with the naked eye. But every water bottle has a description label, and you know where it comes from, where it goes, and who owns it. Any basic change, such as a new business model based on collection, creates a cascade of fundamental changes.
Collecting NFTs can be compared to shopping on an e-commerce platform. But it really is more akin to naming an asteroid that you discovered through a telescope. Certain attributes of the asteroid belong to you from the time you discovered it, but the asteroid itself will always remain in the sky.
In the traditional Internet or offline world, it is almost impossible to claim ownership, and collections are almost meaningless. Original assets, digital or not, have lost their uniqueness, and there are no costs or penalties for replicating them.
In the world of blockchain and NFT, the uniqueness of each version of the digital original bio-item is restored, but at the same time the reproducibility is retained. You can also claim exclusive ownership of digital objects. The word “ownership” itself has a new definition in the NFT world and collecting digital assets becomes more like an “identification” rather than “owning”.
Because of the emergence of a new ownership relationship between humans and digital content, there’s more room to envision new business models.
When collection (claiming ownership) and circulation (open sharing) are not contradictory, the problems that cannot be solved on the traditional Internet can be solved theoretically in the new web3 Internet. NFT revolutionizes traditional online business models by delivering diversified value returns to public goods that are difficult to sell in an exclusive manner.
A new era of ownership and collection
Let’s consider these examples in different industries that illustrate the new ways of owning and collecting assets:
Entertainment. The indie band “Kings of Leon” released an NFT album containing three token types, one of which provides the owner with a “lifetime front row seat” for the band’s future performances.
News media. CNN, which has a history of 41 years, announced that it will select a series of archived news events and issue NFTs through Blockchain, called “Moments that Changed Us” for sale. However, these collections won’t include the records of these important news events disappearing from the eyes of the public.
Technology. Tim Berners-Lee, the father of the Internet who invented the World Wide Web (www), auctioned 9,555 lines of www original codes written by him between 1990 and 1991 through Sotheby’s Auction House on June 23rd, In 7 days, it sold for more than 5.4 million U.S. dollars. Interestingly, he has always refused to apply for a patent for the invention of www so that everyone can use the World Wide Web freely, without being restricted by the rights stipulated in the patent. But in this case, he auctioned and promoted the collection of original codes.
Putting the puzzle together
We say that many problems that cannot be solved on the traditional Internet can be solved after redefining and identifying ownership. This is a theory, of course. In reality, it’s quite distant from our daily habits, concepts, and inertia. Changes will shake the huge vested interests of the traditional world, and they cannot be accomplished overnight.
However, changes in the underlying architecture, reflected in one application and one economic bubble, are all pieces of a bigger puzzle. As long as this is revolutionary enough to change the current world, there is no other choice but to continue to put the puzzle together.
As Marc Andreessen, a pioneer of the Internet and co-founder of Netscape and a16z, said in an interview: “It can sometimes feel that all the exciting things have already happened, that the frontier is closed, that we’re at the end of technological history and there’s nothing left to do but maintain what already exists. This is just a failure of imagination. In fact, the opposite is true. We’re surrounded by rotting incumbents that will all need to be replaced by new technologies. Let’s get on it.”
What we call “a world that is designed on the basis of blockchain, marked by NFT, and operated by digital currency” is famously known as web3. You can see the shift from web1 to web3 in Figure 5. What kind of potential do you think web3 will bring to creators, content, and social networking? Share your thoughts in the comments!
Interested in NFTs? Our inaugural NFT collection, Traveloggers, can be found at OpenSea here.
Follow us on Medium and @MattersLab on Twitter for the latest news and insights on NFT and web3, or start creating on our platform, www.Matters.News.
