Non-Fungible Tokens - creating scarcity and value in a digital ecosystem?

ahalpert

ahalpert

Major Contributor
Here's an excerpt from Noam Kroll's article entitled "Why NFTs Will Become The Great Next Revenue Stream For Filmmakers"

If you haven’t heard of NFTs before, here’s an explanation from Peter Yang’s blog:

“A non-fungible token is a record that shows who owns a unique piece of content. Creators produce unique content such as images, videos, songs, and essays.”

Buyers can purchase a unique, authentic digital copy of any type of content, as if it were a physical item. In the future, if they want to re-sell it, they can do so for a profit – assuming the value of their item has increased.

NFTs are responsible for the Lebron James video that just sold for almost $100K, and the $67,000 video clip sold by artist Beeple, which was later re-sold for $6.6 million dollars
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https://noamkroll.com/why-nfts-will-become-the-great-next-revenue-stream-for-filmmakers/


What do you guys think? Does the concept have a future?
 
Interesting no doubt. I will watch its progress but I am wondering about the number of people who would actually operate in the NFT world on the consumer side of things. How many people do you know who actually use Bitcoin? It seems it narrows your demographic to the younger, hip set. The article mentions larger art houses using the approach which makes sense since they can kind of set the environment for their sales/actions. For the general population? I think it would need to really catch on.

For me, it is a trust issue. I trust the blockchain technology, but I am not sure I trust the source. Meaning many of us will know "of" this technology but very few will "know" the technology. Things could change in a heartbeat and values change. It is all based upon perception and if in the future Bitcoin is perceived to be a scam, or the formula in changed then you just lost your money or a portion of your money. I just see a lot of ground to cover with these new forms of digital currency. But creating value in the digital world is very important going forward.
 
I see this being relevant in the fine art and collectibles market where authenticity is at a premium. For reference, people talk a lot about the "provenance" of an artwork - meaning where did it come from. Is there a documented chain of ownership from the artist to the current day. Are we sure that it's authentic. Is there a chance that it was stolen by the Nazis from a Jewish family and they'll come calling.

So, in that context, I think it makes a lot of sense to say, "Here is this digital artwork that is indisputably proven to have passed from the artist in a limited edition to this series of owners and is coming to you unadulterated."

Or maybe like a copy of the original star wars as it existed in 1977 before Lucas screwed with it later. How do we know this is the authentic original as it existed then? Because we have the receipts.

So, I think it's interesting to create historical documents from digital files that are otherwise ethereal and sort of sourceless. And in that sense, I could even see something like a tweet being made into a collectible because without the documentation, there is no proof that that's how it was in its original form. And if it's manufactured in a limited quantity or as a single edition, that could be worth something to someone.

But it seems more important to me in a fine art/collectible context, not a feature film or short film context. But I suppose (as Kroll says) that if someone thinks you might become famous, it could be worth it to them to buy a collectible of your work.

Incidentally, I edited some of the marketing videos for Beeple, the digital artist mentioned who is currently auctioning NFTs at Christie's. Apparently he's selling well. And once rich people get invested in an institution like NFTs, they will use their power to make sure it maintains value. So, I'm guessing that the concept is here to stay.
 
Earlier today, one of my FB friends from "over there" posts a music related tidbit - it's an anniversary of the Paul McCartney - Michael Jackson collaboration single, "Say, say, say". I was just going to post a video but then saw an attached link. But then I remembered that the famous duo had a major falling out later. I did a little search and found the exact details (which were roughly as I thought they were).

Right around that time the Beatles catalog became available. Paul mentioned that it'd be nice to get hands on it because the music publishing was a very lucrative area of the business. And so Michael's attorney John Branca bid on the rights, eventually reaching an agreement for a ~ $43M purchase price. Paul was miffed. Michael told him, "Nothing personal. It's strictly business".

Paul, of course, had his own attorney (Linda's brother) and could have tried to make his own bid. He didn't. The rights went to Jackson and are worth around $1B today (currently owned by ATV/Sony).

And more - Bob Dylan sold the publishing rights to his catalog for a reputed $400M. Neil Young sold half of his rights for $150M. Rodgers & Hammestein sold theirs for ~ $200M (and this didn't include rights to the Rodgers & Hart work).

So, forget about the non-fungible. Follow the real money.
 
I honestly don't see it making any difference for 99% of creators out there. The stumbling block will always be convincing people to invest in you and your ideas. Those who are good at it will have no problem anyway. Those already at the top will make money and I think its a better way to track royalties etc but I don't see the impact for 99%. I'd love to be wrong. Given some of the most valuable companies are based on very little they actually create I think this is more of the hype game creating value through artificial scarcity. As an investment its a good way to protect digital assets but I really see that as niche even though its an interesting approach in a stale market.
 
FrameFarmMedia said:
As an investment its a good way to protect digital assets but I really see that as niche even though its an interesting approach in a stale market.
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I think it will make less of an impact in filmmaking than other fields. But one nice thing about it is that it puts control of the revenue more in the creators' hands. A band called the Kings of Leon just released an album as an NFT https://www.google.com/amp/s/amp.th...-to-release-new-album-as-a-non-fungible-token
 
Mico brings up perhaps the most important point...these are horribly destructive for our climate problem, like just about anything crypto at the moment. I sort of get digital scarcity and record keeping for art (though it feels like imposing analog concepts into a new world), but we need to find a different way.
 
someone once tweeted this explanation of bitcoin:

imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin
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the energy consumption is awful. but it won't be a permanent problem once we have clean energy, especially if fusion becomes a reality in the next 20 or 30 years, which seems increasingly likely.

re: analog concepts - I think it's really more about money. i'm doing a video right now on the beeple auction that just closed at $69 million on a single digital artwork
 
ahalpert said:
A band called the Kings of Leon just released an album as an NFT https://www.google.com/amp/s/amp.th...-to-release-new-album-as-a-non-fungible-token
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I see this as something for those who like to hoard things rather than enjoy them. I don't really agree that it changes the way music is payed for because bands like KOL already make millions upon millions of dollars for their music. I see NFT as just making more money for the money makers but leaving everyone below in the same old system which isn't working well to make a living as an artist.

mico said:
And there’s this if u care: https://www.google.com/amp/s/www.wired.com/story/nfts-hot-effect-earth-climate/amp
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I agree this is the biggest problem with crypto. Will we regard the massive use of resources akin to how we view strip mining now? Instead of putting money in limited rare items to hoard I wish more money would go into generating clean electricity at scale. Now that is something of real value.
 
^ I've been mad at crypto miners for the eco reason and because they bought up all the video cards, driving up the price and making them unavailable to legit users. For past few years I was considering building a Hackintosh but the biggest impediment was only a select few AMD video cards will work and crypto miners targeted those. Thank god Apple integrated video capability into the M1 making it affordable to own video editing computer.

I'm recording this thread with the hopes I may resell it at a later date! :-p
 
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Kellar42 said:
Mico brings up perhaps the most important point...these are horribly destructive for our climate problem, like just about anything crypto at the moment.
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Only for proof of work cryptos. Proof of stake cryptos on the other hand are resource friendly. My favorite one is Waves.
 
Interesting developments, might be a gamechanger for media-publishers and media owners.

This music NFT is interesting, all the money for the makers/right owners, not for the brokers like amazon, itunes, spotify, youtube.

Turns a download into something like a LP or a cd (if I understand the concept correct). A mp4song with a crypto-token cannot be copied I guess.
 
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ahalpert said:
What's the difference?
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Proof of Work, POW: Highly specialized computers calculate and use a lot of energy. Example: Bitcoin.
Proof of Stake, POS: The more crypto you own, the more you get, just for holding. Example: Waves

I hold most of my fortune in Bitcoin, but Waves is my favorite crypto to work with.
 
Pascal_Parvex said:
Proof of Work, POW: Highly specialized computers calculate and use a lot of energy. Example: Bitcoin.
Proof of Stake, POS: The more crypto you own, the more you get, just for holding. Example: Waves

I hold most of my fortune in Bitcoin, but Waves is my favorite crypto to work with.
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that doesn't really answer my question about how proof of stake is blockchained.

I cracked up at the bit about "my fortune". but hey it's bitcoin, you're probably describing it accurately
 
Proof of work should be called proof of useless work since most of the computing power is used for solving a puzzle. A better form would be proof of useful work such as solving Folding problems.
 
ahalpert said:
that doesn't really answer my question about how proof of stake is blockchained.

I cracked up at the bit about "my fortune". but hey it's bitcoin, you're probably describing it accurately
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I've been planning on shifting part of my investment allocation to crypto. I was watching some financial video comparing the two of the biggest and most popular Bitcoin and Etherium and it said they each use those different methods mentioned. I still don't understand how POS actually works but with these devices you don't need understand to make money. The whole thing is bizarre but I've finally just accepted it.
 
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