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As the world of Web3 continues to take shape, non-fungible-tokens, or NFTs, are playing a critical role in the mainstream adoption of cryptocurrency and helping shape the future of decentralization, ownership, finance, and more.
Though some believe NFTs to be nothing more than "JPEGs," the reality is that innovation within the NFT ecosystem goes far beyond art or even collectibles. Appealing to our innate desire for social status and longing for community, NFTs are the building blocks of a new way to interact both online and in the physical world.
In this article, we'll explore the many unique ways NFTs have and will continue to shape our world and, more specifically, what it means for building in the Web3 era for developers and technologists.
NFTs live on a variety of blockchains, which are open digital ledgers that are accessible to all. As a result, it's incredibly easy to understand the history of a particular NFT using a blockchain explorer such as Etherscan. When was it minted? Who was involved in the last sale?
While the majority of NFTs currently live on the Ethereum blockchain, other chains such as Flow and Solana have also built popular NFT ecosystems as well.
Ultimately, the transparency of the blockchain can help reduce fraud and theft given that everything can be viewed in the public square.
While the often cited statistic that nearly 10% of art is fake may be exaggerated, misattributed art and collectibles are a natural part of the art ecosystem. Would you be able to tell if a version of the Mona Lisa was fake?
How could you prove you're the legitimate owner of a rare baseball card or Beanie baby for example? With NFTs living on public blockchains, there is an open and transparent process in which to determine who is the owner of what.
As Kyle Chayka wrote in the New Yorker, "Imagine digital Beanie Babies, but with only one existing copy of each. For art works, the N.F.T. format functions a little like a museum label noting the piece’s provenance—a proprietary stamp, attached to digital pieces that can still circulate freely across the Internet."
Just as downloading a song online without paying for it doesn't give you ownership, downloading an image on your desktop doesn't give you ownership rights of an image, video, or any other piece of media. A public viewable history of ownership helps strengthen the value of NFTs.
Beyond just art and profile pictures, NFTs have the ability to provide additional value to holders with many creators pushing the boundaries of what's possible in a short period of time.
From collectibles, to being eligible for future airdrops, to even getting access to real world venues , NFTs allow creators and collectors to engage and interact in ways that weren't necessarily possible before.
In the music industry, artist 3lau recently raised eyebrows when he announced that he would be giving away royalties to his fans based on the performance of his new songs.
As Rolling Stone shared in October: "He’s going to give away 50 percent of its streaming rights to 333 fans. The novel business play, the DJ/producer explains in an exclusive conversation with Rolling Stone, is designed to showcase the capabilities of Royal — a still-incomplete blockchain-powered marketplace he hustled to put together following 2021’s big NFT boom."
Another unique and powerful use case for NFTs? Events and concerts.
The recent Bored Ape Yacht club event, which was considered by most to be a massive success, was accessible through owning a Bored Ape or being one of the select few invited to the event. Owning a Bored Ape not only got you into an amazing event, but also exclusive access to network and connect with others who also owned a Bored Ape.
The event included many surprise guests and A-list celebrities which was a hit among the BAYC holders.
In many cases, NFTs offer access to events and individuals that otherwise would have been inaccessible before.
For example, several lucky NBA Top Shot card holders have received tickets to games and signed worn jerseys. Multiple NBA stars have also engaged directly with NBA Top Shot holders to trade for a particular card as well. For NBA fans specifically, it's clear how this line of direct interaction can be massive for the sport of professional basketball.
Another NFT project "Lost Boy" was designed to raise funds for mental health and provide a safe community for those struggling in these trying times. Owning a "Lost Boy" provides holders with their own unique music track, and access to additional perks as well.
As the adoption of NFTs continues to become more mainstream, there will be further ways in which holding can add value to the lives of those who invest in them.
In addition to providing utility to the holders, NFTs also present a unique opportunity for creators to thrive as well.
Using NFT marketplaces such as Opensea and likes of smart contracts, creators are able to earn royalties on their work based on each time an NFT sells, generating consistent revenue and income for creators in perpetuity. Developers of popular NFT projects also stand to benefit long term as opposed to looking to make a quick buck.
The direct access to fans who feel bought into the success of a project gives creators the ability to receive feedback from supporters. Artists, photographers, and creators who may not have had the opportunity to showcase their work at a global scale have been thrust into the spotlight largely as the results of the NFT community.
18 year old artist, Victor Langlois aka (FEWOCiOUS) is one of the most successful NFT artists.
As Esquire shared back in June, "Since breaking into the NFT market in 2020, Langlois has earned just under $18 million. His digital art work “The Everlasting Beautiful” sold for a staggering $550,000. Now he is the youngest artist ever to be featured by Christie’s and the first to crash its site—two incredible records that he reacted to in perfect, teenage fashion on a recent Zoom call: “It’s like… woah.” Not bad for an 18 year old.
NFTs have also helped Issac "Drift" Wright, a former paratrooper who quickly rose to prominence through his daring photography all over the globe. His following on social media and selling his photos as NFTs completely changed his life and he remains actively engaged in the NFT ecosystem.
"Isaac Wright is an honorably retired Army special operations veteran of six years who began shooting photography to cope with mental illness, specifically PTSD and depression. His work involves capturing the world from never before seen perspectives" says his website.
Photographer Justin Aversano felt the power of the NFT community who helped his Twin Flames project reach audiences around the world and ultimately land in the Christies auction house.
As reported by Decrypt:
"Conceived as a tribute to Aversano’s twin brother, who passed away in utero, Twin Flames is a collection spanning 100 photos, each of a different set of twins.
Taken around the world between 2017 and 2018, the photos showcase a wide array of subjects in the location and apparel of their respective choosing, all united by the shared attribute of being twins."
Originally hoping to sell the project as a whole, after connecting with those involved in cryptocurrency and NFT he reconsidered.
"In 2021, Justin connected with GmoneyNFT and some of the folks involved in the CryptoPunks movement, and they encouraged him to let go of the attachment to the project as one whole. Justin tells me that he realized he could allow the project to “exist centralized in the physical world, decentralized in the digital world.” And thus, the plan to mint the images as separate NFTs was born" says One37pm.
Though still in their infancy, NFTs are allowing creators all around the globe to connect with their supporters at scale and in many cases make a living doing what they love. As the creator economy grows, so too will the many use cases of NFTs.
With innovation within NFTs only just beginning, now is the time to get involved! At Alchemy, one of our primary goals is to help educate blockchain developers on the tooling available in the space, and to provide resources to help you become a better developer.
Here’s a few tutorials that might help you get started minting your own NFTs:
Additionally, we’ve just released an NFT API that will help you fetch this metadata without relying on the limited toolset available to you via web3.js or ethers.js!
And finally, we're always available to help 24/7 on our Alchemy Discord. Stop by and say hi - we'd love to help you on your journey to becoming a full-fledged blockchain developer!