- Some creators see NFTs and tokens as an opportunity to be autonomous, financial, and community.
- Many people are tired of supporting platforms like Instagram's reluctance to share its huge dividends.
- One Web3 worker said that creators "put a lot of work into creating for them."
Images of NFTs owned by Jessie Nickson-Lopez
Liam Baker is proud of his NFT. He believes that this is a good investment. And, as a symbol of his belief in a new digital ecosystem far from traditional centers of power, such as banks and social media platforms, it opens the door.
Like millions of other unfortenable tokens, Baker's NFT uses blockchain technology to prove that he is the rightful owner of a unique ape digital painting. The 21-year-old Ohio University student was offered an internship at a California investment firm. He was also invited to join an NFT club where members could race against real Porsche 911s and wrap their cars in NFT images of their choice.
But most importantly, NFTs allowed him to connect with a group of like-minded people.
"People I know here don't like this," Baker said of his Ohio classmates. "I feel like an outcast because I like this. And, it's not just about money, I'm interested in money, it's also a human issue.
"Nobody I know likes it," Baker said of his Ohio peers, "and I feel like an outcast." I'm interested in not just money, but people. ”
NFT images owned by Liam Baker
The NFT, one of the hottest segments of the cryptocurrency and Web3 boom, has swept across Parts of Silicon Valley, Wall Street, Hollywood, and America Street, leading to a prevalence of scams and questioning of technology, with proponents being ridiculed for snapping up digital goods that may be overpriced or even counterfeit.
Beyond the boom and bluff, however, something real is happening. Millions of people were gathered to discuss, debate, joke, entertain and trade with each other in new ways. In the 1990s, when The Beansee Babies switched hands for thousands of dollars on eBay, people scoffed. Prices plummeted, but eBay and its PayPal division are already worth more than $100 billion. When kids keep posting the latest information on MySpace, parents are scratching their heads. Now, parents are obsessed with the $600 billion company Facebook.
Could the same thing happen again, this time outside the confines of a centralized internet dominated by Facebook and its big tech company brethren?
Ohio student Baker thinks so—even after someone stole his ape. An anonymous person provided 29 ethers for the NFT, or about $90,000. The man sent Baker a link that appeared to be a transfer. It's a backdoor into Baker's cryptocurrency wallet. In an instant, the digital ape disappeared. Soon after, it was sold to someone else for the equivalent of about $40,000 in cryptocurrency. Baker contacted the FBI, but there was no way to get his ape back.
Despite the high cost of the experience, Baker is not going to give up his Web3 adventure. It's all part of an early promoter in the field, he said, and there are plenty of real-world benefits. After he posted on Twitter about the theft, he got hundreds of responses, which meant a lot to him and reinforced his sense of being actively part of a caring community.
"It encourages me and I have to move on," he said. If I want to be my own bank, I have to understand the risks inherent in me. ”
People may suffer losses, but rewards outweigh risks.
The people involved in Web3, whether creators, investors, or business owners, are very optimistic about this industry. According to people interviewed by Insider, digital currencies, commodities and commerce are the trends of the future, but they are still in their infancy. There is no denying that there is fraud, scam and peddling, but opportunity and a thriving sense of community keep true supporters enthusiastic in the face of skeptics and criticism.
"It's a gold rush and everyone is here to take risks," said Pascal Gauthier, CEO of Ledger, a secure crypto wallet, "and people can get hurt, but the rewards outweigh the risks." With the passage of time, the development of technology, the maturity of the market, the scam will gradually disappear. ”
Pascal Gauthier, Ledger Ledger的CEO
Of course, one of the core demands of Web3 is money. Even in the creative space, proponents say value can flow more directly between users and artists, with few big tech or financial firms stepping in and taking their share.
Creators, influencers or celebrities can mint their own NFTs or tokens to sell to fans who pay in cryptocurrency. Creators can get a majority of the initial NFT sale price and take a cut from the future transaction fees of the tokens they create. Fans want to get a novel digital commodity, and there will be more to gain in the future. It can even add value, and they can sell it for a profit, or just keep the right to brag about showing off.
"The greatest value of Web3 is to be able to give your community a part of your success and help you grow faster," said Jon Youshay, a creator and consultant who has worked for Instagram and YouTube. "Incentives are more consistent. People who want to buy your NFT are pushing for engagement and viewing time, which is also something that will drive up the price of an NFT. ”
Last year alone, an estimated $41 billion in NFTs were traded. The Boring Ape Yacht Club, launched last year by Yuga Labs, is said to have pulled about $70 million in secondary sales after initial sales of $2.5 million.
"In a way, NFTs represent partial ownership of a company or a creator," said Mike Knittl, a financial adviser to the upcoming NFT fund. "The old way is to sell shares in an IPO. Unless your investment exceeds $100 million, you usually don't enter early. By doing so, it is a democratized financing that we all have a chance of. ”
Stocks are one way to look at creators and Web3. Creators are entities, and the NFTs and tokens they offer are stocks. The value of these stocks depends heavily on the hype or the intrinsic artistic value that collectors see in someone's digital work.
I cried, not because of the money
Quinn Slocum, a photographer and co-founder of the startup metav3rse.io, said he originally came to Web3 because he was frustrated with the traditional method of selling his work. Slocum said: "I had never sold a single print before joining the field. ”
Then he started hearing about his peers casting NFTs and getting up to 20 ETH, or about $60,000 bids, so he tried it. It took months, but after a friend posted his work on the Foundation, his NFTs sold out within 24 hours at a price of 1ETH each.
An NFT image owned by Quinn Slocum
"I was crying so much that it wasn't because of the money," Slomm said, "that's knowing that someone believed in my work." As an artist, you can make statements in the digital world. ”
Foundation, a service that uses the Ethereum blockchain to connect artists and collectors, says it has earned creators the equivalent of $169.2 million in cryptocurrency since its launch in February 2021. And that's just the initial sale. The creators own their "smart contracts," which are sales agreements written in lines of code on the blockchain. These contracts include guaranteed payments for the secondary sale of their digital creations.
Artists who sell through traditional galleries often have to come up with a 50% commission, and they only get paid for the initial sale. The standard for NFTs is usually a 2.5% fee levied by platforms such as OpenSea. In addition, creators can also get a piece of all secondary sales, taking 5% to 10% from these later transactions.
None of that money went to or through existing social media platforms like Instagram, YouTube, TikTok or Snapchat. For example, in order to make money on Instagram, creators actually offer their content to companies for free, usually to gain enough followers, pay advertising for brands and other marketers. On YouTube, if you're one of the lucky few who get a big enough audience to advertise, the company usually takes 30 percent of its revenue.
"We're their builders and their products," said Jessie Nickson-Lopez, a TV writer and producer and most recent Web3 supporter, "and we're borrowing their platform and putting a lot of work into creating for them, but we're not getting anything in return." ”
Cool Cats, Cool Pets, and a Chick-fil-A tour
What existing social media giants still have is the ability to entertain billions of people through constant content and connections. But even so, Web3 is making early progress.
The launch of new NFTs, or mints, can be a fascinating social event in itself. At the end of January, an NFT project called Cool Cats launched Cool Pets, a new version of its digital cartoon animals. The project went live on Twitter and Discord, and that night, when mint started, about 600 enthusiasts rushed into a Twitter space party.
The group, mostly young people, were chattering about the project. A lively debate about the value of Cool Cats and new pets began. Some wonder if smart contracts are already open. Can they afford to buy these things on the secondary market? Are they already too expensive? They chatted like friends, though most likely no one had ever seen or even known what the other person looked like, because everyone's avatar was some sort of NFT.
"I'm going to Chick-fil-A, but bring my phone," one speaker said, "hopefully I won't be Rugged," "Rugged" is a Web3 term that refers to a situation where I've been scammed or generally scammed. This fast food trip sparked a conversation about Chick-fil-A sauce. Is the variety that McDonald's offers better? Before this problem was solved, Cool Pets, began casting, and the NFT counter on the Cool Cats website slowly rose to 10,000.
"The wait is over!" Someone shouted. The man at Chick-fil-A was warmly ridiculed. He hurried back to his computer before getting his food.
The price of Cool Pets NFT is 0.5 ETH each, which equates to about $1250 according to the Ethereum price of the day. At the Twitter space campaign, those who successfully signed a smart contract to have one quickly began helping others who were struggling to get one, step by step, and advising them on how not to be scammed. They sold out that night, and in the initial sale, Cool Cats netted $12.5 million.
Within seconds, though, the pets were resold on OpenSea for around 3ETH, which equates to around $7500. It's hard to tell which ones are real and which are copycats, and it's hard to evaluate whether the fast hype demand for NFTs is someone trying to dig into the wall.
"If you don't know what you're doing, don't do it, I don't want any of you to throw away the money." A speaker named Snipe said so, having replaced his avatar with Cool Pets.