NFTs – or Non Fungible Tokens – took the online business world by storm earlier in the year.
People were making huge amounts of money from them – we’re talking fees that range from 4-figure sales to high 8-figure sales for a single asset.
Here’s the thing though.
While we think NFTs are gonna be huge over the next ~6 months, we also think they’re going to quickly wane in popularity. At least in the short term.
Right now there’s a tonne of interest in them because they’re new, novel, and profitable.
You’re going to see a huge number of people jump on the bandwagon in an attempt to harness the next “get-rich-quick” scheme.
When the next quick profit concept comes along, these business tourists will move on.
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However, the groundwork that’s being laid right now is still applicable in the long run and could help your business secure new revenue streams in the future.
Here’s everything you need to know about NFTs to future-proof your company’s revenue growth.
If you’d have asked me even 3 months ago what an NFT was, I’d have responded with a blank stare.
NFTs aren’t exactly brand new (they’ve been around for a few years), but they’re new to most people.
In the last few months we’ve seen the interest and excitement around NFTs grow exponentially.
The Google Trends data is pretty illuminating on this.
So the question is, what are they and how can they help your business?
What are NFTs?
The short answer to this is they’re unique digital assets.
The clue here is in the (not so obvious) name.
NFT stands for Non-Fungible Token.
Fungible means that it can be replaced like for like. Or, not unique.
For example, the $5 bill in my pocket might have a unique serial number, but it has the same value as the $5 bill in your pocket.
We could exchange them and neither of us would gain or lose anything in that transaction.
So, a $5 bill is fungible.
However, the Mona Lisa is non-fungible.
There’s only one of them in the world.
You might be able to go out and buy a print or photograph of the Mona Lisa, but it doesn’t have anything close to the original’s value.
Trading a print of the Mona Lisa for the real thing would leave one person making a fortune while the other person loses that fortune.
How do NFTs work?
So the asset itself is unique and unable to be duplicated.
How is that possible with digital assets?
We all know that replicating a digital asset is pretty easy online. Even secure networks and hosting platforms like Teachable can’t prevent digital courses from being cloned and sold at a fraction of the price.
So what is it about NFTs that changes this?
Well, NFTs make use of Blockchain. Here’s a very quick explanation of what that means.
A primer on blockchain
Blockchain is, at its core, a database.
Most databases have data stores in a central location. All people who have access to that data have to access that central location to see, edit, or duplicate the info.
And, generally, the database only shows current information.
However, a Blockchain is a little different.
It’s a string (or chain) of blocks of data. Each block is uniform in size and there is no central node to pull data from.
As a new block is added to the Blockchain, the hashed information of its prior block in the chain is passed along to provide better security.
Each block has the historical and current information. It’s also connected to every other node in that Blockchain.
Security implications of Blockchain
Centralised databases are at risk by their design.
If needed, someone could hack into one of the connected access points (or the central database itself) and make amendments to the data.
Other connected people wouldn’t know that the changes had been made.
Think of a Google Drive document that has tracking changes turned off. You create something, log in at a later date, and find all of your information has been removed, edited, or copied.
Not a lot you can do in most cases.
Blockchains connectivity across the network prevents this.
In order for me to add or change information the majority of nodes must form a consensus that the change is relevant and correct.
If that majority consensus isn’t reached, the change cannot happen.
And because each block has both current and historical data, it’s easy to trace that amendment request back to the source.
In short, Blockchain is more secure as there are more complete, traceable records that are almost impossible to change without the correct permissions.
Back to NFTs
So NFTs make use of Blockchain, generally Ethereum.
Every NFT is given a unique token that lives on that Blockchain. This means someone, somewhere will own that unique token and be the unquestionable sole owner of that piece.
And because of the Blockchain’s security implication, ownership of the original is going to be easily traced back to the current owner.
You’ll also be able to see the “ledger” of past owners so that authenticity back to the creator can be proven.
That’s what has so many people excited over this.
It’s bringing much-needed security, tracking, and genuine scarcity back to digital assets that have – to this point – been stripped of that originality.
What can be turned into an NFT?
Pretty much anything digital.
Here are a few of my favourite NFT creations up to this point.
To get access to the full list of interesting NFTs and our thoughts on them, click this link → https://airtable.com/shrySa8slKz2jVqMV.
The list could go on a lot longer. And as long as these folk are pulling in big numbers, it will continue to get longer.
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NFT financial and growth details
It’s a little difficult to pin exact numbers on everything here. Unlike our other breakdowns, this isn’t a specific brand.
Whilst difficult to get exact numbers, we can get a general sense of how the NFT market is growing by examining some of the larger marketplaces.
When were NFTs first created?
The first emergence of NFTs can be found in 2017.
And one of the first products to use NFTs was the collectible site Cryptokitties.co.
How have NFTs grown?
Generally speaking, NFTs were a relative unknown until the start of 2021.
Yes, they were created in 2017. But for the last 5 years very few people spoke about them, fewer still were interested to see where they might lead.
It’s only in the last ~3 months that interest has peaked (as demonstrated in the above Google Trends graph), largely due to the huge sums creators are making through NFT assets.
To give an idea of the growth, let’s take a look at OpenSea.io, one of the largest NFT marketplaces.
OpenSea was founded in December 2017 by Devin Finzer and Alex Atallah.
Over the years, they’ve raised $4.2MM.
In terms of revenue, it’s hard to get a beat on this.
However, multiple sources report OpenSea pulling in around $3MM per month.
What’s interesting is that there are now other marketplaces (Rarible being my main point of focus) that were created at a later date and are making more money than OpenSea.
Rarible itself is reported to make $8MM+ per month despite only being founded in 2020.
Then you’ve got niche-specific marketplaces like NBA Top Shot that clears 7-figures daily.
Why NFTs are needed
There are 2 huge problems facing creators at the minute – discoverability and monetisation.
Both are related to a profitable relationship with their audience.
The stop-gap solution has been to rely on third-party platforms that either help the creator…
- Reach a wider audience for a cut of their revenue
- Allow easier monetisation but don’t help with discoverability
Here’s a more detailed breakdown of the problem of relying on third-party platforms.
A creator’s problems with third-party platforms
A creator wants to spend their time creating. That’s what they’re best at and what they enjoy doing most.
In an ideal world, that would see…
- Musicians focusing on their music
- Writers penning their next incredible novel or article
- Artists painting their next masterpiece
And so on.
However, there’s also the stereotype of the “starving artist”. The person who’s so engrossed and obsessed with their art that they never figure out how to make money from it.
The thing that really rankles here is how much enjoyment people receive from the works created by these creators.
- Museums full of art are often packed with admirers
- Blockbuster movies bring entertainment to millions of people across the globe
- Music helps elicit emotions from sadness to ecstasy
- Novels bring entertainment, enjoyment, and education to countless people
You basically end up with people creating things others love, but who fail to make money from them.
The solution seemed to come along with the rise of various platforms that enabled greater reach.
- Musical artists have Spotify
- Video creators have YouTube
- Authors can leverage Amazon KDP
These platforms and services attract millions of people and enable a creator to get their work in front of millions of potential fans and customers.
It sounds great, but it’s heavily weighted in favour of that intermediary.
Generally speaking, you have the user or advertisers paying the intermediary, who then forward a small percentage of that payment onto creators.
The trade-off for creators has been giving up revenue in return for reach.
And because the money lies with the intermediary, they hold control.
It’s evident when you break down the payment numbers from platforms that rely on, and monetise, external creator’s content.
What’s immediately noticeable is how the musical artists of the world are getting royally (royalty?) screwed.
Spotify apparently pays 52% of all money made to the labels. So more than half goes to someone whose job is increasingly becoming less important as new marketing channels open up.
What I also think is notable is how the payout percentages change based on “discoverability”.
The easier it is to get “discovered” on a platform, the lower your cut.
Spotify, YouTube, and Twitch have algorithms that will help new subscribers find your content.
We’re talking things like…
- “People who watched this also liked…” suggestions
- “Curated for you” playlists
And similar options.
Sure, these aren’t enough to ensure a great income. But, they help get your brand in front of new people at no financial or time investment from yourself.
Substack, Patreon, and OnlyFans on the other hand require you to also learn how to market yourself.
It’s not just about churning out great content. To succeed on these platforms you have to learn…
- About SEO to drive organic traffic
- Paid acquisition
- How to foster relationships for cross-promotions and partnerships
You basically have to become a marketer as well as a creator.
Which isn ‘t exactly bad, but it’s an extra job you probably didn’t think you had to learn.
I know Substack is trying to help improve discoverability. It’ll be interesting to see if they take a larger cut to facilitate the new service and development costs associated with it.
You could summarise by saying that the easier a platform makes it for new fans to find you, the less profitable each of those fans then is.
And regardless of that discoverability, you have to end up paying a good deal of the money that’s supposed to support you for the privilege.
Which brings us back to NFTs.
The only reason these platforms are able to do this is because they have a centralised database containing the creator’s creation.
They then lease that creation to their audience for some form of payment (financial or attention of advertisers).
And because of that centralised database, they can do it at scale.
It has been, until recently, the best way for creators to become exposed to huge audiences they can monetise.
NFTs are changing that and giving full control back to artists.
The ability to create genuine originals that cannot be duplicated is key to reclaiming that control.
The arguments against NFTs
Not everyone is on board with NFTs. Many people are – understandably – stuck on what the term means, how they work, and why people are spending so much money on them.
That’s all surface-level, though. If you dig a little deeper, you’ll still find people who understand what NFTs are and still don’t believe they’re useful or important.
Their arguments tend to fall into two basic categories:
Argument #1: You can still copy the work
One of the most common arguments against NFTs is how you can easily copy the work.
I could go to any one of the links above, right-click the actual asset, and hit download.
Or I could hit CMD+SHIFT+4 to take a screenshot of the artwork.
But, as I mentioned above, that’s the difference between owning the Mona Lisa and having a print.
The argument takes on a new angle though due to digital’s nature.
The screenshot image will be the same quality as the original.
The print will be nothing like the Mona Lisa’s physical quality because it’s been replicated with a completely different technique.
Argument #2: NFTs are bad for the environment
There’s an ongoing debate about the extent to which cryptocurrencies are affecting the global environment.
Since mining crypto is an energy-intensive activity, it leaves behind an environmental cost. Right now Bitcoin alone would rank as the 40th highest energy-consuming country in the world (on par with Denmark).
NFTs are based on Ethereum, not Bitcoin, but still require massive amounts of energy to produce and then trade.
If you’d like an idea of how much energy this actually looks like, Cryptoart.wtf estimates and tracks the carbon cost of various NFTs, like:
This piece took the equivalent of 2 months of electricity consumption to create.
This is more of a general argument against crypto, not so much that NFTs are specifically bad.
The question you might be asking now is…
Why should you care?
It’s a good question.
The obvious answer is because there’s a huge surge in interest right now. And there are people out there literally making retirement money from one or two digital assets.
With every passing week there’s another interesting use for NFTs discovered. And there are people out there using those new ideas to generate respectable income streams.
These experiments are laying the groundwork for various revenue streams that creators and brands of all types could leverage in the short and long term.
Here’s how we’ve broken them down and what we’ve noticed as the key differentiators for success vs failure in NFT marketing.
How NFTs could change marketing and digital business
At the minute, the majority of NFT focus is on collectibles and artwork.
Everyone from huge creators to those with modest audiences are looking at how they can create something “unique” and sell it as a collectible.
We believe this craze will die off in the not-too distant future.
NFTs are seeing a huge increase in interest right now because they’re new, novel, and people are making a ton of money trading them.
However, that interest will die down. And then we’ll see a resurgence with more important and practical applications.
Here’s how we think NFTs will continue to change the online marketing and business worlds over the long term. And more specifically, what it is you should be doing to adapt to the changes.
Potential changes from a high-level perspective
As I mentioned, NFTs have been around for a few years.
And if you think about it, purely “virtual” products have been around for even longer.
- Online courses, ebooks, and other info products.
- Premium versions of apps and mobile games.
- Character upgrades in video games like Fortnite, Call of Duty, etc.
All these are virtual goods. They’re built and sold entirely online.
More importantly, they’re mainstream. Most of us already spend money on many of these products every year.
So, while NFT’s might sound a little new and different, they’re really just a development in the digital economy that we already use all the time.
With that out of the way, let’s look at several practical ways that NFTs could change the digital landscape for businesses.
Change #1) You can create real scarcity
Digital products are, in theory, limitless.
- They don’t expire.
- They don’t run out of stock.
- They’re easily duplicated (legally or not)
Once you publish one ebook, for example, you can sell an endless quantity pretty much forever.
These qualities make digital products really attractive for sellers. An endless supply of something that doesn’t cost anything extra to make? Great, right?
But, this lack of scarcity can also make digital products feel cheap and make buyers lazy. If something is always there, easy to access, and not going anywhere…then there’s no reason to take action now.
The way online marketers get around this problem, often, is to create urgency by manufacturing artificial scarcity.
This is done by:
- Opening and closing access to products.
- Offering discounts that are only available for X people or for X days.
- Adding sales pressure with things like countdown timers and “doors closing!” emails.
Whatever the tactic, it’s not exactly “true” scarcity.
Once a product “disappears”…it’ll likely reappear in a few months, when the brand will repeat the same sales campaign and manufacture extra pressure on the buyers.
Even though this is a process that many businesses apply to their online sales, it really doesn’t feel very good to the buyer. Most of us know what’s going on – and it can feel a little manipulative.
Now imagine if brands could avoid all those “fake scarcity” strategies and just sell products that were truly scarce.
- Artists could produce unique, limited edition pieces.
- Info product businesses could run cohort-based classes with limited seats and limited repetitions.
- Gamers could create unique, original avatars.
- Virtual worlds could build unique pieces of real estate.
- Authors could produce original works or add personalised “signature” pages to the first “print run” of new releases
…basically, it’s like having a watermark that proves ownership over an original copy of a product.
It’s a little bit like the antiques world – except modern and less dusty.
Change #2) Creators can have better security over their work.
One of the biggest advantages of NFTs is their potential to combat digital piracy.
Digital creators have spent the last 25 years being incredibly vulnerable to copycats and digital pirates.
Case in point, an old course I put together can be bought for ~10% of the actual original price (it’s $500, not $297) through a site I have zero affiliation with.
It took weeks to create that course.
It took minutes to find a rip-off version through Google.
If you’ve got any digital product that’s had even a bit of moderate success, you’re likely to find your hard work republished on another site.
You can threaten the pirates with legal action – but the truth is, there’s not much in the way of consequences. If the person is running their site from another country, it’s virtually impossible to do anything about it.
That’s been the situation pretty much since money started changing hands online.
If you have an ebook, a PDF, an audio file, an image, or a video, all that a pirate has to do is download your original….and then upload it somewhere else.
Until now, there’s been no way to truly prevent this.
- You can add password protection to a PDF or a Doc.
- You can list a video privately.
- You can stick a watermark onto an image.
…but none of these options actually stops someone from getting access one time, taking your product, and then totally ripping it off and republishing it.
With NFTs, a digital creator can bypass the attempts to protect content by simply releasing a finite set of trackable, authentic products.
People can still take a screenshot, record a GIF, or entirely rip off the product – but their creators can prove which version is real vs fake. And if watermarked with identifying info, trace piracy back to the source.
It probably won’t eradicate piracy, but it’ll dissuade a lot of the opportunists.
Change #3) Creators will have more publishing options.
NFTs will also change how creators make and publish their work.
Up until now, creators have had to build something, publish it on a platform with an audience (like Udemy, Teachable, Gumroad, or others), and then try to drive as many people as possible to those outlets.
There’s a price ceiling on these platforms (and sellers have to pay commissions or fees to the platform itself).
Now, NFTs free up creators by also enabling them to create and sell limited editions of a product in new ways – like at an auction.
If you’ve got something good, it has the potential to go viral, like Jack Dorsey’s first tweet:
And you don’t need to be the founder of a billion-dollar company to cash in here.
Li Jin, who works at Atelier Ventures, minted a simple NFT Gif in collaboration with a digital artist. She launched to her audience on Twitter and sold the piece for ~$23,000.
How creators and brands are using NFTs
So NFTs are giving a tonne of control and monetisation options back to creators and brands.
But let’s get specific and look at a couple of real-life potentials we’ve seen working for brands and creators.
Before we do, a quick reminder of the key benefits of NFTs. They…
- Offer genuine scarcity
- Have traceable origins
These are what we’re building these predictions around. Here’s how we think they could be used in online businesses over the coming years.
Direct monetisation of relationships
This is the big one in my opinion.
By giving creators access to genuine digital scarcity they’re going to be able to control the monetisation of the relationship with their audience.
They’ll control how many of a genuine asset are created. And they’ll control when and how it’s launched to their audience.
They’ll be no need for middlemen or intermediaries to enable this.
But what will that actually look like?
Well, this is one of the areas we’re more confident in predicting because we’re already seeing these forms of NFTs being sold.
Collectibles fall into one of two categories.
- Limited editions
Here’s how they could break down for creators.
One-offs are the most simple thing to create as an NFT.
A creator would create a single, unique asset that they then sell to their audience at a premium price.
This is the exact same concept as traditional artwork.
There’s only one…
- Mona Lisa
- The Starry Night
- Girl with the Pearl Earring
And so on.
All a creator would need to do is create a one-off creation.
Of course, anyone could do this. I could write a specific eBook or article now and mint it as an NFT.
However, I’ll be lucky to make triple-figures on it.
Looking through the current rise in NFT creations, we’re noticing that the most lucrative one-off creations share some commonalities.
- They’re from creators with established, highly engaged audiences
- They’re from creators known for creating a specific type of deliverable
- They’re from creators who get huge numbers of impressions, shares, and copy-cats
Here are a few examples of what we’re talking about.
One-off Example #1: Jack Butcher of Visualize Value
Jack Butcher (and his brand Visualize Value – VV) is known for taking complex ideas and simplifying them into easy to understand images.
He has a very definite style (simple white lines on black background) and has amassed quite a following.
On Twitter alone Jack has 107,000 followers while the VV account has 159,000.
In addition, Jack cracked $1MM in sales for his Visualize Value course across 2020.
In short, Jack has…
- The audience
- The recognisable style
- The reach
He created an NFT design and sold it at auction. The final price reached was a little under $60,000.
One-off example #2: Beeple
Jack’s done insanely well. But Beeple – otherwise known as Mike Winkelmann – took this to another level.
Beeple has been creating a daily image for over 5000 days (and still going strong).
As you’d imagine, he’s grown a huge audience and an almost cult-like following.
On Instagram he has almost 2M followers and is constantly showing up in various other forms of media. He’s worked with brands like Nike and artists like Katy Perry.
Beeple is a “super-creator” of sorts.
He also broke records with NFTs. He created an original piece which pulled together the first 5000 days of his artwork into a single mosaic.
Record #1 was partnering with Christies, making them the first major auction house to run an NFT auction.
Record #2 was selling a piece of art for $69,346,250.
That’s generational wealth money simply by collating his work up to this point.
Of course, he once again had the audience, the reach, and the distinctive style.
How brands can use one-offs:
The first thing to note here is that you might not be at the point where you could leverage a one-off.
If you haven’t got the recognisable style, audience, or reach yet, work on that. If you have, then there are a few simple things you could create as an NFT.
- A genuine one-off creation
- A unique collection/collation of your most popular works
- Certifications for courses and products
- Add-ons and upgrades for specific games, characters, and virtual worlds
- (plus, pretty much anything digital)
While anyone can create something that’s unique. I do think the one-off approach is best suited for visual artists.
Those who create images and videos over words.
Limited editions are nothing new.
You simply take something that is either already proven to be popular or has the potential to blow up, and you make a special series of that thing.
These limited editions are viewed as more valuable by fans and thus have a higher price point attached.
A few examples of successful limited editions with physical products include:
- The first print run of a book that later becomes extremely popular
- Simply producing a set number (e.g 100) of an item and no more
- “Shiny” or special collector cards
What I really like about these ideas is that they, pretty much, can be directly moved over to the NFT model.
You can create a limited number of something and, thanks to the tracking of ownership, prove who has the “original”.
For this to work, you’d need either…
- An asset that is already selling well of which your audience would love to have a “limited edition” version
- A new asset that you know will do well based on past performance
Here’s an example.
Limited edition example #1: Rob Gronkowkski collector cards
Card collections have always been a moneymaker.
From old-style baseball cards to modern Pokemon cards, people love to trade and own these things.
Of course, if there’s a limited edition of a particular set – perhaps something with a shiny background or which was only produced in very small numbers – the price drastically increases.
The Honus Wagner card being the most expensive, being sold for almost $4MM, as there were only 50-200 ever created.
The love for trading cards has already carried over into the NFT world with Rob Gronkowski releasing 5 cards, each with 87 editions each.
At the time of writing the auctions aren’t over, but it looks like the cards are each going for multiple thousands of dollars.
Limited edition example #2 – Atari x RTFKT fashion sneakers
Atari partnered with the digital designers at RTFKT to create a limited edition line of digital sneakers..
They’ve created 8 unique sneaker designs. Only 50 of each design will ever be minted.
6 of the 8 designs in the Atari X RTFKT line
The interesting thing about this line is that the sneakers will be usable across several digital worlds, like Decentraland, The Sandbox, and the Atari Metaverse. You can even “try them on” using Snapchat. As modeled below by Me.
How brands can use limited edition NFTs
Unlike the one-offs where it’s kind of limited to visual artists, there are plenty of potential applications for limited editions.
Here I’m going to run through a few ideas we’ve had on this.
Create wearable swag for digital avatars.
Like the Atari sneakers in the example above, brands can release “fashion” items that can be used for online characters.
People are clearly willing to spend real money on digital add-ons for the various characters they build in their favorite games. Creating limited editions with NFTs would significantly up the value of an asset.
A couple of real use cases we can think of include…
- Swag for private community members to denote level of engagement, length of membership, cohort “graduating class”, or simple aesthetic personalisation.
- Unique methods for community members to support creators and have something to show for it (digital badges, seals etc)
A “first print” of a new eBook / course / digital asset.
The creator could add a personalised “signature” page to the opening of the ebook/course that’s specific to the purchaser.
Much like a real signature at a book signing.
If someone like Russell Brunson was to release a limited run of 50 copies of DotCom Secrets, each with a title page that thanks the person who bought it, I’m sure his audience would jump on that chance.
Certification and authorisation
This is where I think we’ll see the biggest use of NFTs in the future.
At the minute, a lot of the respectable training institutions offer some form of certificate to people who have completed a specific training course.
That certificate is both proof of completion and competency.
You’ll see people share these on social media, add them to their portfolio, and use them as part of job/gig applications to showcase their ability.
Here’s an example pulled from Linkedin.
Here’s the problem with this.
I could easily copy Sandra’s certificate, photoshop my name onto it, and then add it to my portfolio without having completed any of the actual training.
Sure, some of the more discerning hiring parties out there will do their due diligence and double-check. For CXL, it’s easy to check as the original is hosted on the CXL site.
Not every brand that offers certificates offers this level of security though. And many small brands don’t have the resources/time to double-check every claim made by applicants.
Minting certificates as an NFT could stop people from forging fakes.
The originality of the document could be traced back to the source. Of course, there’d have to be some service (here’s an idea for a new SaaS company) that allows brands to easily check the validity of certification NFTs.
We’ve seen things like this in the past. You have the Google Partner badges that appear on PPC Agency sites (below from KlientBoost).
If you click on that Google badge, it’ll take you to Google to double-chec the validity of the badge’s usage.
Thing is, this is really only available to those huge ad networks with the money and resources to create a certification system that’s easily validated.
For smaller creators out there, the certifications they might be able to create are easily forged.
NFTs could be an easy way for everyone to have more easily validated certifications.
Turning physical products to digital
You can create a digital version of almost any physical asset.
For example, these NFTs started out as a single physical painting that the artist digitized. He then created a few different versions and sold them on Nifty Gateway.
Which one is the original?
It’s really up to the creator. They can:
- Keep the original painting and create an original NFT.
- Destroy the original painting and point everything to the NFT.
The second option may seem extreme, but that’s exactly what happened to “Morons”, an original Banksy print.
It was purchased at auction and then burned on a livestream. The owner claimed it was in order to transition the piece into a purely digital asset in NFT form.
He’s now created multiple NFTs related to the burning of the print – not just the print itself!
Is this really a publicity stunt? Sure. But it’s still a worthwhile example to consider.
Owning the “only” version of something is often the attraction of a collectible.
Imagine owning an original painting – the physical kind – by Kanye West.
What happens to the value of that painting if Kanye creates a digital version of the same piece, mints an NFT, and calls the digital version the “original”/authentic copy? Is your physical version still worth as much?
This is still a fairly new concept, but it’ll be interesting to watch how creators and buyers protect their physical pieces as the digital world continues to develop.
Turning digital products to physical ones
It’s a little less obvious when it comes to turning digital products into physical ones, but it can be done.
For example, Josh Pigford has been selling laser-engraved plaques and coasters that memorialize tweets.
By attaching an NFT to each tweet engraving, he’s ensuring the authenticity and uniqueness of each piece.
Another approach would be to include a physical copy or physical product add-on to a digital purchase.
For example, someone selling an online course could include a physical add-on, like a “real” journal or workbook. This could be customized to fit the buyer’s digital purchase, adding an extra layer of personalization and authenticity to the overall product.
Fractional ownership and ongoing royalty payments
This is, in my opinion, one of the most interesting developments with NFTs.
Creators are always looking for the best ways to monetise their work. NFTs are yet another way for us to add monetary value to what we’re churning out.
With a few new approaches, you’re able to sell fractional ownership to your audience on an almost crowdfunding basis.
Each person who partakes gets a % stake in your future creation.
If they own 1% now, they’ll own 1% of the sale price when it comes down to selling at a later date.
It’s a great way to monetise your work right now with a real investment incentive for those who support you.
The method of doing this is pretty simple.
- Come up with an idea
- Crowdfund the piece through a service like Mirror (Mirror is primarily for writers)
- Sell stakes in your work as a presale
- Create the piece
- Sell it on an NFT auction platform
Let’s run through this with a more detailed hypothetical.
Step 1 – Coming up with a profitable idea
As a copywriter first, I’m going to approach this from a writing perspective.
I could go and write whatever I want, but the likelihood that people would invest then would be small.
Instead, the better option is to ask people what it is they want you to create.
Ask your audience for input and take the most requested idea as your starting point.
Let’s imagine that I did this, and my audience asked me to produce a full breakdown on how to grow a $1MM / year business through YouTube (next month’s edition).
Step 2 – Outline and crowdfund
I’d then take that idea and craft a basic outline of what we’d cover.
This is needed because otherwise you’re asking people to invest in an idea when there’s nothing tangible.
With that basic outline, I’d use a tool like Mirror to crowdfund the piece.
Here’s an example from John Palmer doing exactly that.
Here’s how this works.
First off, let’s address the $ESSAY token.
That’s what you retain if you’re a funder of this project.
And you can see from the top funder that the exchange rate is 1000 $ESSAY tokens are worth 1 Ethereum.
We can also see that the author retains 35% of the $ESSAY token for this piece.
That means that 65% of the article is available for “sale” through the $ESSAY token.
After pre-launching the idea you’d sell stakes of that 65% to your audience for Ethereum tokens.
They could buy as little or as much as they want (you can also cap how much a single person can own).
Before we move on, I’d like you to remember that the #1 person has 1000 $ESSAY shares which is 1 Ethereum.
At the time of writing, 1 Ethereum is worth $1,777 US (this is important for later).
Step 3 – Sell stakes in your work
Now you just need to go through with the process of selling access to that work on Mirror.
You’d do that by driving interest and traffic from your audience
If they don’t have an Ethereum wallet to partake, you could point them to simple Ethereum wallets like Coinbase (there’s a full breakdown of Ethereum wallets here).
You’d run that bidding cycle until you hit your minimum or maximum. Then it’s time to do the work.
Step 4 – Create the piece
Nothing mysterious here.
Time to buckle down and get the job done of selling shares of your creation.
Step 5 – Sell it on an NFT auction platform
Once you’ve created the piece, you need to head to a NFT sales platform like Zora to sell the piece.
Here’s that piece from John Palmer above.
Again, once set up, it’s about driving interest and traffic to this so people c an continue to invest.
Continue to profit
Here’s the really cool bit though.
Above I asked you to remember 2 numbers from the top funder of John’s piece.
They bought 1000 $ESSAY tokens for 1 Ethereum.
And that got them 7% ownership of the $ESSAY tokens.
That person owns that 7%, and they can’t be taken away from them or forged thanks to the blockchain tracking element inherent in NFTs.
Now let’s imagine that, at the time of the funding, that 7% was worth a flat $1000.
And again, for argument’s sake, that would make the shares available through the $ESSAY funding to total ~$14,285.
Now imagine that John sells the piece as an NFT on Zora.
And the fee he sells it for raises the total value of all $ESSAY tokens to $30,000.
That top funder’s 7% is now worth $2100.
At that point they could choose to trade their tokens back to Ethereum to “cash out”, or hold on to them if they believe the value of the piece will increase with time.
It’s basically allowing people to invest in content as if it were more traditional stock.
Be careful with this though
Here’s the thing with this fractional model.
You’ve got to be really careful.
I’m seeing a couple of people set up sales on this model right now for educational material on, in very meta fashion, NFTs and their future.
We are way too early for anything produced now (even this piece) to be 100% factually accurate over the long term.
As time passes and the NFT market develops, articles and explanations of how NFTs work and will work will become less valuable.
The information out there will develop, the permanent record of your article will not (unless you continually update it).
That’s going to drive the value of your piece down.
As an example, can you imagine anyone paying big $$$ for the first article that was published on running Google Adwords campaigns?
Outside of some really weird collectors, I can’t.
That information is now so outdated and the platform has changed so much that I doubt you’d even be able to use it to figure out how development happened.
If, however, you’re writing something like…
- Opinion pieces
- Fictional content
- Personal essays
I believe the value could (and should) hold and increase over time.
The key here really is to create something that’s going to last. And basic explanations of systems need to be continually updated.
More artistic endeavours, on the other hand, should age better and offer more value over the long term.
I could be way off base with this. And I hope I’m proved wrong for my own selfish sake.
However, I can’t see purely educational content appreciating unless it’s from a Stephen Hawking level intellect who’s creating something for others to build on.
Here’s the truth with NFTs.
No one in the world knows how these things are going to develop over the next few years.
Yes, there is an insane amount of hype around them right now. And that’s great for people positioned to benefit from them.
However, if we’re being completely honest the market is incredibly small.
As mentioned, NFTs are primarily built on and around Ethereum.
Which means the potential market for NFTs is pretty small.
You have to target people who…
- Are invested in Ethereum
- Have enough invested to spend thousands on a digital-only asset
- Believe there to be value in a digital-only asset
That is a very small potential user base.
Which, at the current rate of adoption, is going to become quickly exhausted and saturated.
This is why we believe the current NFT craze will die down.
These early adopters will soon move on to the next potential tech based investment or creation opportunity.
But that doesn’t mean NFTs are going to die off.
If anything, I think they need that reduction in interest.
When the early adopters move on to the next thing, there will be the die-hard NFT believers who will build new tools, services, platforms, and marketplaces to allow more people to invest in and mint NFTs.
There will be a temporary downturn in the next few months.
But much like Bitcoin, there will be an incredible resurgence once accessibility is opened up to more people.
That could be …
- Different investment options (other CryptoCurrencies, cash investments etc)
- More widely available tools (mobile apps, platforms, marketplaces etc)
- Easier methods of minting and creating fractional ownership
We don’t know exactly what will happen.
However, it’s almost certain that there is a future need for NFTs, especially in helping creators secure their futures and creations.
And it’s because of that focus I think you’d be stupid to ignore NFTs.
NFTs help creators. Creators will create something that helps them leverage NFTs for their own (and their peers’) future.
Right now the use cases aren’t well developed, explained, or understood.
But that doesn’t take away from the fact that there is a real-world application and need here. It might take a while for them to become mainstream, but NFTs are here to stay. And the earlier you get on that train, the better off you’ll be.
I’ve put a number of downloads together that will help you continue your own research into NFTs and understand where the opportunities for your business lies.
You can access to all materials through the below link.
Bear in mind, these downloads are only available to subscribers. So be certain to sign up to the paid tier of membership.
You can find all of the downloads mentioned throughout this piece in the Google Drive below.
And here you’ll find a link to the filterable tables of NFT successes and sales.