Ahh, NFTs. Collectible tokens are not something I like. There are too many cases of art plagiarising. Sandra Ro, the CEO, of the Global Blockchain Business Council, says that things are just beginning in the world of NFTs and it extends far beyond art.
Ro gave an insider's view of NFTs at this year's Conference. While she presented many good business opportunities, she offered few compelling solutions to the problems.
From Digital Injections to NFT Art
Ro spoke of a boom in NFT ownership collectives where "anything social or physical can now have a unique identifier, and proof that ownership that is verifiable online."
While the market is "very messy", as are all new things, the true value is in the uniqueness of the token and the ability "inject economics" into it.
She gave an example of frictionless selling and buying, as well as fractionalized ownership. An example of fractionalized ownership is when a subscriber who has an annual membership to a club can sell their token to another subscriber.
It is not a bad idea. In many countries, it is difficult to get out of an annual contract. For contracts that were signed prior to January 2022 in Germany, you must give at least three months' notice and provide proof of your departure. This is a very complicated process, so I'm all for it.
NFTs are not limited to transactional memberships. They can be a catalyst for additional value.
NFTs to Bring Sports Fans Closer to The Action
Ro described a world where NFTs could facilitate fan engagement, including special access to VIP access and the ability of marketers to "more stickiness within their community."
Ro claims that there's a lot to be made in NFTs and sports. I agree.
In March, I was able to attend the SailGP international sailing race. As part of a partnership between NEAR Foundation and Astro, the makers of the blockchain platform Astro, have just launched a series of NFTs. Each one focuses on sustainability and local art.
It's clever. It's smart.
Additionally, crypto bros love boats -- from the Bored Ape Yacht Club to Blockchain Cruises. It's part of a huge digital plan that even has a SailGP DAO that allows fans to buy a sailboat and create their own team.
NFTs in stadium sports will be more difficult, however, Ro acknowledges that "there are many intermediaries and they are still working out the details."
Already, smart sports stadiums have sophisticated fan apps that cover a range of sectors. These include food and drink, transport tickets, and access to live commentary from the players.
It can be difficult to get these verticals to work together in an app that is already working.
How can we go from crypto bros to early adopters to mainstream apps that bring disparate communities together?
Is NFTs Possible to Become Mainstream?
Ro sees a future in mission-driven DAOs as well, citing Ukraine's example.
The MetaHistory NFT museum was launched by the Ministry of Digital Transformation of Ukraine. It is a blockchain-based history of the Russian invasion of Ukraine, which showcases NFTs through digital art.
A lot of people are also using NFTs for fundraising in Ukraine. Although most are good-intentioned, most don't have the digital auditing skills necessary to tell the difference between legitimate accounts and frauds.
There are many other issues than a fraud with cryptocurrencies.
There are Many Things to Worry About
Ro said that the Bitcoin network was never successfully hacked. She admits, however, that providing security takes a lot of energy. She asked, "What are you willing live with?" She said that she would prefer a secure cryptocurrency or a low-carbon footprint.
She admits that bad actors are not uncommon. It's difficult to put up safeguards that don't kill innovation. She believes that more regulations could limit NFT ownership to accredited investor NFT owners, but she acknowledges that these investors are not the most wealthy and need to be limited.
NFTs have the potential for specific use cases, which I believe is a sign of promise. However, I am less certain that NFTs will be mainstreamed or adopted in mass.
It's just that many people are getting rich, with a few compelling outliers. One example is JDL street art, which was also at the TNW conference. Last year, she sold artwork for an unprecedented EUR2.9 million in cryptocurrency. A third of that was donated to charity.
However, movements must start somewhere. Although I am unsure if the money will follow, the NFTs' fundamental goals of blending virtual and physical economies may just become a reality.