The future of the internet is decentralized and NFTs will serve as the building blocks. These building blocks will be transformative for creators and communities, forever shifting the ownership and exchange of value.
The internet is a living thing, and that means constant evolution. If you’re reading this, you’re probably familiar with the current transformation taking place with Web3. The core principle of the internet’s next era is decentralization, which is a layered and complex concept. Technical, economic and legal infrastructure is being built that will disrupt current systems in ways we can’t begin to imagine. As this foundation is being constructed, non-fungible tokens (NFTs) have emerged as the technology that will enable the ownership and exchange of Web3 assets and goods.
The last 15-20 years of the internet is categorized as Web2. The technology developed and deployed during this time has shifted society in a number of ways. Digital content and experiences have become central to most people’s daily lives, as social media and user generated content make it possible to create and share with billions of people around the world in an instant. While the result has been an eruption of content and revenue opportunities for global businesses and creators, Web2 centralization is now a corrupted roadblock for the true ownership of value being created.
The solution has emerged in blockchain technology and web3. Content and experiences are becoming tokenized, empowering the next phase of the creator economy in which true ownership will be accessed. The mainstream awareness of NFTs has centered around digital art, however this technology and its utility goes way beyond just artwork. Smart contracts and NFTs make it possible for the tokenization and exchange of digital assets, and these assets will serve as the building blocks of Web3 ecosystems.
Businesses across all industries should be considering how Web3 platforms and protocols will be adopted and how tools can be developed to maximize growth. At the heart of this consideration are NFTs, and how they can be intelligently deployed and utilized to ensure 100% ownership is retained and value is captured for businesses and their communities.
The first known NFT was minted by digital artists Kevin McCoy and Anil Dash on May 3rd 2014. Titled “Quantum”, this video clip of McCoy’s wife was minted on the Namecoin blockchain and kickstarted the digital art renaissance currently underway. While NFTs started as digital art and continue to be defined by this categorization, they go well beyond this use case and will form the future of the internet.
It’s hard to look past the excitement around NFTs as a medium for art, as this narrative is driving the space from a mainstream perspective. Everyone from Jimmy Fallon to Paris Hilton have dipped their toes into the non-fungible waters, and for most people ape illustrations are all they see of this new phenomenon. Artists like Beeple have unlocked the power of royalties via smart contracts and Snoop Dogg has started exploring the disruptive potential that NFTs represent in the music industry.
Looking beyond these creative forces, NFTs are rewriting the rules of ownership, eliminating the need for middlemen on transactions and exchange of assets. Blockchain transactions are trustless, creating reliability without credentialed intermediaries. Now NFTs enable the tokenization of assets so they can move freely in this new decentralized internet.
The potential of this is transformative for everything from real estate to gaming and beyond, as access to ownership can proliferate through fractionalization of assets. As an example, historically real estate investments have been capital intensive. NFTs make it possible to provide access to these assets without the current barriers to entry. As we move further into Web3-based virtual worlds and the metaverse, all digital assets will be owned, bought and sold as NFTs.
The range of use cases and disruptive potential of NFTs is hopefully becoming more clear. While many in the space have clarity around this subject, a big piece of the puzzle is still missing from most perspectives. Ownership of value through tokens is obvious once the “aha moment” occurs. However, the assets require P2P decentralized applications (dapps) to facilitate transactions. Currently the trend is to utilize platforms that incorporate Web2 centralized processes, and this goes against the Web3 ethos of decentralization.
The missing piece is ownership of these platforms, and moving in this direction will help projects and their communities claim the full value that they create. Centralized platforms only serve to profit off of the creators of NFTs through transaction fees and engagement. To draw a web2 comparison, there are countless resources available via platforms that users can create an account and generate content. While the power to create content is made possible by these platforms, ownership of the resources is still in their control.
NFTs flip this dynamic, becoming the resource that is linked to from the platform instead of living there. The resource (the NFT) lives in the user's wallet, enabling true ownership without the need for the platform’s existence or assistance. As an example, if a creator uploads a video to YouTube, they might retain ownership rights of that content, but what happens if YouTube shuts that user’s account or their servers get wiped? The creator has no control over these actions with centralized platforms, but ownership of NFT marketplaces ensures that this will not occur. Access is in the hands of the community and creators.
As NFTs represent a new medium with which content and assets can be created, bought and sold, they will become the standard for brand experiences in Web3. Users are becoming empowered through ownership of their digital assets, and expectations are beginning to shift toward self sovereign identities. Once this experience is shared there is no going back.
This concept is made more clear through the perspective of social media value exchange and how companies like O-Mee are shifting the experience for users. Traditionally, users post content on social platforms in exchange for likes, shares and comments. This value exchange is unbalanced and control is left in the hands of the platform. O-Mee is building a social media platform and subscription service that is powered by NFTs.
O-Mee’s solution enables a world of opportunity for both creators and users, as ownership of the content is maintained by creators and a fair exchange of value is facilitated. This way, creators can gain followers and subscribers while users can tip or pay-per-view and everyone has the opportunity to earn through multiple streams of revenue. The decentralized platform ensures that balance is re-established and creators can deliver experiences to their users that are fair and open. This is made possible through a decentralized NFT marketplace dedicated to O-Mee and their community.
The future is bright for everyone contributing value in this new internet. Blockchain is enabling value to be created and exchanged in a transparent and immutable manner, delivering ownership to the sources of that value. While Web2 platforms have become exploitative, extracting value from the users, new Web3 ecosystems are rebalancing this to ensure that value remains in the rightful hands of the participants and not the big tech companies that exploit them. NFTs are a critical element of this evolution, and ownership of these assets and the marketplaces on which they are exchanged is necessary for the future of the internet to live up to its potential.
If you’re ready to explore how a dedicated NFT marketplace can help your business and community claim its value and build a sustainable hub for the future of your business, schedule a live demo with Liteflow today.