How NFTs Will Change The Creator Economy Forever
Originally published on March 3rd, 2021
Ah, the hottest new buzzword. NFTs.
NFTs are taking over the digital space and it’s only a matter of time before they hit the mainstream (depending when you’re reading this, they may already have).
From the outside, NFTs might look like overvalued digital drawings. And that may be correct depending on the context and perspective you viewed them from.
However, the true value and power of NFTs stem from one thing.
The creator economy has been around for years, but there’s never been something given to creators as powerful as NFTs. There’s already unlimited use cases for NFTs but I believe we’re just getting started.
Here’s a few ways I believe they’ll change the creator economy forever.
The Creator Stock Market
I heard about the concept of investing in creators and entrepreneurs a while ago, but it wasn’t until I watched Colin and Samir’s video How Logan Paul Made Millions Selling Air that I understood how NFTs can make this a reality.
Allowing people to invest in creators creates many opportunities not only for the creator, but the investor as well.
Let’s say a creator releases a token for themself, offers fractional shares of that token, and the token holders receive dividends through partial ownership of the token - just like a stock.
Here’s an example:
Mr. Beast decides to create 10 NFTs worth $1,000,000.
It could be valued like a company - look at the creator’s earnings and projections and do a valuation just like Shark Tank.
Since there would only be 10 NFTs with each one being originally valued at $100,000, it creates scarcity and demand. This increases the chance of appreciation of the NFT but what if there was another way to create value?
Now, this is where it gets interesting.
Mr. Beast decides to offer dividends to token holders. Just like buying stock in an actual company.
Since the original price was based on his income as a creator (and whatever else would go into the valuation), those NFTs can act just the same as a stock from Wall Street.
As his income and popularity increase, so does the price of that NFT because the dividends are also increasing. There’s reward/cash flow instead of just hoping for appreciation and resell.
This “stock market” thought behind NFTs creates real, tangible value from this digital asset that translates into the real world and I’m very interested in seeing how this plays out.
The creator could also hold monthly "token holder" meetings where those few investors get to help decide on the content that gets created, the videos, anything - and the value of that NFT will keep increasing as long as the creator keeps growing. It also adds a sense of equity and ownership for the investor when they see the content that they had a say in being created.
It benefits the creator by acting as another source of income, as well as the investor because they can now see monetary benefit from their favorite creator growing.
Yes, there’s going to be a lot more that goes into it than just issuing a token and giving away money. I don’t know the laws and regulations around offering a dividend through NFT ownership and maybe there aren't any?
Is that the whole point of this decentralization movement?
Maybe actually it is that easy. I don’t know.
**This is not financial advice whatsoever**
(If you’re reading this and know more about this aspect of it, please reach out to me because I’d love to learn more)
Another aspect of NFTs is the potential exchange of value in addition to the digital asset.
How much would you be willing to pay to meet with Warren Buffet or Jay-Z once a year?
By pairing an NFT with access to the creator, it brings a tangible experience to the digital token.
For example - let’s say Casey Neistat offers 10 NFTs that in addition to the digital asset, you get access to an annual meeting with Casey.
It may not seem that important to everyone, but there’s an unlimited amount of creators that would give an arm and leg to get inside Casey’s mind and hear his thoughts in an intimate setting rather than a YouTube video made for everyone.
This model allows creators to build tight-knit communities and I believe that community is one of the most important parts of the creator economy.
Yes, this can be done without NFTs. It already is. But I think paired with the aspect of appreciation in value for that digital token and whatever else can be added to an NFT, it takes membership and access to a new level.
There’s already creators taking advantage of this and creating communities for NFT holders.
It’s an exclusive community and we all know exclusivity creates demand. Look at what Clubhouse has done over the past few months.
NFTs not only help creators generate revenue, but also gives early fans a way to say “thank you” as well as bragging rights if the creator becomes wildly popular.
Rewarding Creator Ownership
Another example from Colin and Samir’s video is that creators can place ownership on their original piece of art or product. This is groundbreaking because there’s never been a way for creators to participate in the profit of reselling their art.
For example - Supreme sells their box logo tees for around $60. However, they resell anywhere from a couple hundred to thousands of dollars. Supreme gets the original benefit of selling the shirt for $60, but resellers get all the profit when they flip the shirt and Supreme sees none of that.
Through Smart Contracts, the original creator can place partial ownership on the piece of art or whatever it may be and participate in the increase of value forever.
Let’s step out of the creator examples for a second.
Imagine you’ve been listening to an artist that hasn’t hit the mainstream yet, but you believe in their talent and abilities.
This artist issues an NFT to raise money for the production and marketing of their first album rather than relying on a music label. (This is real, independent artists are growing and traditional music labels are slowly dying)
To reward their early fans, a certain percentage of album sales will go to those early fans who bought the original NFT in perpetuity.
If you’re early and you’re right, you can win big.
I’m not trying to sell you on the idea of NFTs in hopes that you go out and buy them. I believe it’s important to be informed on new developments in the world of investments and money and I think the NFT market as a whole is going to be massive in the future.
As Gary Vaynerchuk has mentioned, it’ll be like the influencer market. There’s going to be millions of them and 99% of them will fail, but the ones that don’t.. will benefit in an unprecedented way.
Technology will never capture anyone. Like as I’m writing this, I’ve thought about people who live in my hometown (which has a population barely over 1,000) and wonder - 99% of them don’t and won’t ever care about NFTs whatsoever.
And in the grand scheme of things, nobody’s heard of NFTs yet. I live in a bubble on social media so the echo chamber makes it feel like every single person knows about NFTs. How many times am I going to say “NFTs”?
But this might end up being like when computers came out. Or the internet.
A lot of people said “oh the internet’s a fad”. Well, that wasn’t true…
But there’s people that still don’t use the internet or computers.
So I’m not naive enough to think that regarding NFTs, “oh people won’t buy these. They have no value.”
I just don’t believe that.
Gen Z is coming. They were born digitally.
Their celebrities are creators. Not movie stars.
Gen Z isn’t going to have a single issue with adopting digital-first assets and NFTs.
I don’t want us millennials to be the new Boomers just yet.