Technology has a way of keeping us on our toes. It throws curveballs at us just as we start settling on the proverbial pitch of innovations.
NFTs or non-fungible tokens are one such disruptive technology that has become the talk of the town.
What is an NFT?
An NFT is a digital artifact that cannot be replicated. Unlike other cryptocurrencies, which can be exchanged one for one, an NFT cannot be traded for another as each holds a unique identity and value.
NFTs are crypto items that can store information. Each NFT has a unique code that serves as a digital letter of authenticity. Additionally, as NFTs operate on the blockchain, they also hold information about its transaction history.
So, it becomes virtually impossible to counterfeit an NFT item. Buyers can track whether a trader is an original owner or a re-seller.
Technically, any digital asset like videos, photos, GIFs, audio files can be sold in the NFT marketplace. But, it’s essential that the owner ‘mints’ an NFT for it and uploads it on any of the scores of NFT sites available.
Here’s a list of some:
Why are NFTs becoming popular?
When people hear someone make millions of dollars for a simple digital file they naturally want to know how it happened and how they can do the same.
However, the root of the popularity of the NFTs lies in flex culture. People want to stand out, be unique to the point of being eccentric. They’re willing to pay an outrageous amount of money to ‘flex’ that they own something one of a kind.
If you’re a Harry Potter fan, imagine owning the NFT to your very own Patronus! I’m tempted to put a heart eye emoji here.
The concept is not new. People have been buying valuable art pieces, collecting coins, and stamps, just for the sake of having them, for ages.
GaryVee observes that NFTs are and will keep becoming popular due to the continued digitization of our society.
He comments that we communicate our personalities through our purchases and our buying behavior. And that’s what makes NFTs so irresistible to the modern consumer; purchasing them creates their unique brand.
According to him, NFTs are of value to the modern consumer just as the ‘blue check’ is worthy in the social media world. It’s about increased authenticity.
Read more: How to Use the GaryVee Content Model for Video Distribution
NFT videos from an artist’s perspective
NFTs are most popular among the members of the creative industries.
Whether it’s videographers, musicians, designers, animators, or game developers, anyone can create a piece of digital art and put it up for sale. The do-it-yourself model of NFT marketplaces eliminates the need for an art gallery or an art dealer.
As an artist or a seller, it can be tricky to choose from the plethora of NFT marketplaces available. Some platforms have strict approval measures, some are curate and invite-only, and some charge hefty commission and registration fees.
It can take months to get approved for an NFT marketplace as they check for quality, authenticity, and ensure that your work is not available for digital purchase elsewhere.
Moreover, the cost of getting the NFT videos out there can leave small profit margins for the artists. Here’s a breakdown of what it costs to sell your NFT on Foundation.
Technically, you don’t have to be an influencer or a digital hotshot with a certain amount of views and subscribers to monetize your content.
However, most of the time the art is only as valuable as its creator. People are more likely to invest in NFTs from established artists.
For instance, Mike Winkelmann aka Beeple who sold a 10-second video for 6.6 million dollars is already regarded as a cultural icon in the digital space.
CROSSROAD
By @beepleThe #1/1 from beeple's first NG drop has just resold on the secondary market for $6.6 million.
History has just been made.
Congrats to beeple and of course to @pablorfraile for the sale. pic.twitter.com/mTYG4VABSw
— Nifty Gateway (@niftygateway) February 25, 2021
On the plus side, NFTs afford increased authenticity to videographers, animators, or any artist for that matter.
Ownership and copyright violations are major concerns for creatives in the digital world.
Take memes and GIFs for example. The original creators of some of the most popular memes and GIFs are unknown.
Creating an NFT for a meme or GIF ensures that while people can share it, they can’t claim credits or for your work. Moreover, if it blows up the artist can claim authorship/ownership and monetize it depending on the level of its popularity.
Remember Disaster Girl? Zoe Roth who’s the subject of the popular meme just sold her original photo for $500,000!
Read more: 10 Copyright Laws Every Video Producer Should Know About
NFTs make room for art scarcity and kick piracy to the curb as each token has a unique code attached to it.
Knowing that there are a few (or sometimes only one) original versions of a particular art piece that exist, creatives can demand insanely high prices for their stuff.
Check out this cool NFT video created and sold by Pablo Rochat for $57,036.59
Moreover, since NFTs can store information, they can be programmed in a way that pays artists royalty fees every time it is resold.
This ensures that if their work blows up and becomes a prized commodity later on they still get their share of the effort. Hallelujah for the passive income!
NFT videos from buyers’ perspective.
While the world of NFTs presents exciting opportunities for the creators, buyers can end up in a few pickles.
First, verification and authenticity concerns can arise as anyone can upload an NFT for a digital art piece and claim to be the original owner. You might want to do a little research before making an NFT purchase if that’s the case.
The second is the concern of multiple original versions. You might buy an NFT video thinking that you’re the sole owner of the original version, but the artist can later release more versions of the same art.
Technically, these will also be the original versions and of the same value as they came from the same artist. The existence of multiple original pieces can bring the value of your NFT down.
For that, you can only rely on your intuition and dig a little about the artist’s character. But there isn’t anything legal stopping artists from creating multiple original NFT videos and other art.
The ‘collector culture’ has also taken over the NFT space. Buyers might want to collect all the original versions of an art piece. Creators may also produce a series of NFT art pieces like Pokemon cards that the buyers would want to get their hands on.
An example of this is NFT collectible items within video games like weapons, character outfits, vehicle number plates etc. Some of these NFTs can also be used across different games. How cool is that!
Check out more about crypto games:
What can the NFT future look like?
Some speculate that the latest craze of investing in NFTs is akin to the dot com bubble of the ’90s. It is assumed that since the rise of NFTs is based on flex culture and they involve insane amounts of money, this trend is bound to crash and burn.
Others expect that despite the predicted NFT bubble burst, some giants in the game will survive and NFTs will become a part of our daily lives. Just like Amazon and Google weathered the tech bubble burst.
What can be some future uses of NFTs in our daily lives?
ColdFusion predicts some sustainable real-life uses of NFTs can be:
- Purchasing domain names
- Collateral in decentralized crypto loans
- Registration of a car
- Deed to a home
- Unique digital membership tokens to influencer channels that allow special perks to followers.
Another cool real-life future use revolves around the augmented reality technology. If Google and other services succeed in creating sophisticated Oculus glasses, users could use NFTs to view and place digital art in real-life settings.
What’s the downside?
The NFT world has the potential to put a huge dent in the environment. All NFT related activities have a significant carbon footprint.
How, you ask?
Hundreds and thousands of computers around the world work simultaneously to process virtual NFT transactions as well as creating and verifying an NFT.
This process requires a LOT of electricity to manifest. This in turn means every time someone takes an NFT related action, they’re burning fossil fuel.
Cue in hazardous greenhouse emissions and snowballing the already terrible global warming crisis!
Just to give you an idea, an average NFT transaction on the Ethereum blockchain, takes up 48-kilowatt hours of electricity. According to FutureNow, that is more than what an average US household consumes in a whole day!
If it’s between owning an NFT video flex and a politically correct clear conscience, a lot of green millennials and Gen Z would opt for the latter.
This also leads to the concern of hidden fees in the name of ‘gas fee’ charged by different sites for each NFT transaction.
Additional costs can also incur via price fluctuations and conversion fees. All in all, it’s wise to thoroughly read up on the fine print before minting and auctioning an NFT video.
It will ensure that the costs don’t outweigh your profits.
What’s the verdict?
If the use of NFT videos and other NFT items becomes a part of our daily lives, it will become harder to resist.
For artists that are not already big names in the market, the minuscule profit margins leave much to be desired.
As a buyer, whether or not the investment is worth it depends on what you value as a person.
The climate or your brand? The eternal question rises again!