Why Creators Should Care About NFTs
Perhaps you’re a little old-fashioned and you still like your tokens fungible. Well, sorry, because the times they are a-changin, and from now on, the only tokens anyone cares about are the non-fungible kind.
Unless you live under a rock, you’re well aware that minting NFTs has become the go-to move, not just for creators but for every celebrity with any interest in the digital world (and quite a few who until now, didn’t seem to give a damn about online creation). As a creator, you may be wondering, “But wait a minute, do I really need to care about NFTs?” In a word: yes. Fortunately, Pearpop is here to help, with this handy guide to everything you ever wanted to know about NFTs.
LET’S START WITH THE BASICS:
What is an NFT? Well, not to get too technical, but NFTs are actually two things: first there is the actual token and then there is the “associated content.” “Non-fungible” means it is unique and can’t be swapped with something else. Basically, every NFT is a unique token on the blockchain, which records the provenance and ownership of digital goods into a public ledger that can’t be altered. Like cryptocurrencies, NFTs are stored in digital wallets. Most NFTs are part of the Ethereum blockchain.
As a creator, when you mint an NFT and offer it for sale, you can provide access to the content through a download or by streaming. NFTs provide ownership of a piece of digital content. (Keep in mind that when you issue an NFT, you are issuing a license to your buyer, which means that legally, you have to own the rights in the first place.)
NFTs allow you to turn a digital image, video, or song into a limited edition or even a one-of-one piece. There are many different kinds of NFTs. As a creator, you’re most likely to be interested in minting and collecting NFTs of digital art, music, gaming assets, and event tickets, but there are also blockchain domain names, virtual real estate, luxury goods and even insurance policies that have been tokenized. (You may have heard the term “social NFT.” That’s just an NFT made by a creator like you, who has turned a piece of content into a limited edition NFT.)
NFTs are especially good for creators because you can use them to offer special benefits to your fans: an NFT can unlock exclusive rewards, access to a private one-on-one meet and greet, or VIP tickets. There are a range of platforms that cater to different categories of NFTs but as a creator, the big names to explore are SuperRare, Nifty Gateway, Foundation, and OpenSea.
WHY CREATORS SHOULD CARE ABOUT NFTS:
There are two major reasons why creators should care about NFTs. One is the issue of protecting your autonomy, provenance and sovereignty. As a creator, NFTs give you more autonomy when it comes to earnings and content rights. The second is financial: one of the key ways they add value is that unlike, say a painting, you can continue to earn money on an NFT each time it is re-sold.
IS ANYONE ACTUALLY GETTING RICH OFF OF NFTS?
Hell, yes. Valuable collections of NFTs by the OGs of the game include the artist Beeple–who raised quite a few eyebrows last year, when he earned a quick $69 million by selling his NFT “Everydays – The First 5000 Days” at Christie’s. So yeah, there’s gold in them thar hills.
On the other hand, if you don’t already have a decent following, don’t expect to get rich quick. Selling NFTs isn’t easier than selling anything else, and in some ways it’s harder because some of your followers may be hesitant to spend money on a new technology they don’t fully understand.
The bottomline is, the sky’s the limit but it could take some time to market your NFTs and it’s important to have realistic expectations.
WHAT MAKES AN NFT VALUABLE?
This question has a one word answer: rarity.
While the technology behind BFTs is cutting edge, some fundamentals about their market value are timeless: for example, the only thing that makes them valuable is if people want them. This comes down to supply and demand and what makes NFTs special is the fact that as a creator, you can determine the scarcity factor. If you want to mint 10 NFTs or 100 of them, it’s entirely up to you. Each one comes with a unique identifier, so there is a built-in exclusivity that you are able to control.
ARE NFTS A GOOD INVESTMENT?
Unlike say, a loaf of bread, which you could say has intrinsic value in that it can prevent you from starving to death, an NFT’s value depends entirely on what the market will pay for it. For this reason, investing in NFTs is a more tricky gambit than investing in commodities. The value of an NFT depends 100% on what someone is willing to pay for it.
What’s great about collecting NFTs as opposed to, say, collecting baseball cards or vintage clothing? For one thing, NFTs don’t degrade, they can’t be lost in a fire, and unless the Ethereum website crashes, they’re here to stay. (Although there is something called “Bit rot,” which is when file formats can’t be opened anymore, websites go down, or image quality deteriorates.)
SOME RISKS TO BE AWARE OF:
Because NFTs are a relatively new phenomenon, there are some legal complexities and a few gray areas that are still being worked out. There are also open questions about how existing business regulations, securities laws and intellectual property rights considerations apply to NFTs. Until these regulatory issues are settled, it’s a bit of a wild west moment. And while blockchain technology makes it almost impossible for an NFT to be duplicated or manipulated, the age-old issue of counterfeiting is still a problem. Unfortunately, there are still plenty of hackers and scammers out there who may try to claim ownership of your content and put it up for sale. And while in theory the data embedded in an NFT can’t be manipulated, one serious issue of concern is that the current system doesn’t require someone to prove they own work in order to mint an NFT. So fraud is still a real risk.
Finally, there is a major concern that blockchain technology may be harmful to the environment. Ethereum and other cryptocurrencies consume huge amounts of electricity and if you’re worried about global warming and climate change, you won’t be happy to learn that the projected emissions created by mining Ethereum may cause a serious rise in global temperatures over the next 30 years.
HOW CAN YOU GET STARTED?
If you’ve done anything that’s gone viral, that’s the perfect thing to mint as an NFT.
You can take your most popular posts onTikTok or Instagram, or any milestone moment that has special meaning to your fans and followers, and “mint” them as limited edition NFTs. Boom! You’re in the NFT business!
As with any art form, the starting place with minting NFTs has to come from a place of authenticity. You can’t fake your way to success, so first begin with considering what you have to share with the world as a creator. As the world of NFTs explodes in popularity, the competition is becoming more and more intense, but one thing you have going for you is there is only one of you. So start with your own individuality and think about where you fit in, and what you have to offer the world as a creator.
Perhaps the most important thing you need as you wade into the world of NFTs is a community. Fortunately, you’re part of Pearpop. As the world’s best community of creators, you’ve got access to all the relationships and support you need, right here.