What are NFTs? Are they jpegs, contracts, nonsense, or something more?
Snagged Two New NFTs: a Bone mfer, and a frame from CALLADITA (the first European feature film funded by NFTs).
One Quick Thought:
The issue we are focusing on today is— What are NFTs? Are they jpegs, contracts, nonsense, or something more?
For some NFTs are gibberish, nonsensical, and zero-value digital objects that can be “right clicked, saved.” That’s all true, however, the inverse is also true. NFTs can be revolutionary, system builders, that are fully transparent through ownership. The issue most have with NFTs is that there is a clear lack of understanding as to what they actually are. The beauty of NFTs is that the value is truly maximized in the eyes of the beholder.
NFTs are known as non-fungible tokens (NFTs) which are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. Thus an NFT is largely a uniquely priced asset derived from the market’s perceived value of its utility, the holder’s perceived value, at the intersection of scarcity.
Wait… what’s utility?
It’s the simplified term for what value a holder can squeeze out from possessing the NFT. For example, the three most common ways to view an NFT’s utility is through a hierarchy of common benefits— art vibes, contractual vibes, and association vibes.
For those that limit their thinking to NFTs as simple jpegs only, they inherently view the utility of the NFT limited to art. Namely, its value is what the market is willing to pay for it if the art is any good. I.e. this week I snagged a free mint of a Bone mfer NFT because it cost nothing but also, I enjoyed the art. The value is zero on the market but to me— worth holding.
Then there are contractual vibes— an NFT can be a metaphor for the benefits exchanged between the creator and holder. Some, not all, NFTs operate this way but the value of this utility is to exchange cash for potential opportunities. I fully believe NFTs will be one of the future systems used for financing feature independent films so when I had the chance to mint into the first-ever European film financed this way I had to join.
On Miguel Faus’ CALLADITA he’s selling single frames from his award-winning short film which his feature is based on. By selling them as a collection, he’s offering those holders of the NFT the chance to see the complete filmmaking process. A front-row ticket— thus providing invaluable resources, namely: access, education, and insight. This is all possible because the blockchain creates a transparent and traceable interaction that provides real-time proof of an asset’s ownership.
The above is frame #1090 from the short, when Anna, the main character slides into a guy’s DM and invites him to her boss’s place for a 1:00 AM rendezvous. I’m excited for the future of this project, as I can’t wait for Miguel to complete his pioneering mission.
This is the largest and hardest leap to make when viewing NFTs. NFTs are largely visual artworks that unify and build a community around said artwork. This means that if enough unity, belief, and mission is thrown behind the project then association begins to develop. Association is the bedrock of any cultural institution— Catholics to the Crucifix, Republicans to the Elephant, Boston baseball fans to a Red Sox. Now, it’s difficult to see communities rallying behind a Bones mfers (see above) NFT for a new political party. But, never say never, we’re in a bold new world.
So What is an NFT?
In conclusion, NFTs can really be anything. Art vibes, contractual, associative, or other. But one thing they are not is useless. The true value and power is at the intersection of the market, utility, scarcity, and personal benefit derived and provided. Hence the more creative the use case the more advance thinking around NFTs will evolve.