Luxury in
Your Inbox

Web 3 and NFTs: Revolutionizing Ownership in the Digital and Physical World

NFTs

Shutterstock

As the internet landscape changed, so too did its players and the monopolizing of media, commerce, data, content and art.

As a digital executive growing up with the internet space since 1995, I spent over 25 years online understanding all of the ins and outs of the web—and while many chose traditional jobs and positions, I spent my time championing brands online for the latter part of my career.

However, as the internet landscape changed, so too did its players and the monopolizing of media, commerce, data, content and art. In order to understand where we are today, let’s take a look at the first two waves of the internet.

Those first couple of decades we call Web 1 and 2.

In Web 1, we were able to read on the internet. That is, we solely went online to access some general information or to read email. This period lasted from about 1989 to 2005.

In Web 2, we were able to write or publish content. Most of us do this with our social media, blogging, video, websites, etc. This period started around 2005 and is currently overlapping with Web 3.

During Web 2, content ownership was in the power of a few and it seemed like every service provider or merchant was taking a cut, as were lots of middlemen.

YOU MAY ALSO LIKE: TECH TOYS WE’RE LOVING

The influencer was born and the machine was fed, catapulting consumerism, catering to an algorithm to fight for attention and inflated numbers for validation and credentialism.

Enter Web 3 (starting around 2014) with blockchain and crypto at the forefront.

Let’s start with blockchain, a decentralized, “no longer in control of the few” system of recording information in a way that makes it difficult or impossible to change, hack or cheat the system.

The front end result, or presentation of a website, may look very similar to you or I, but the backend technology is much more encrypted, secure and transparent. It takes into consideration ownership and allows you, the owner (creator, publisher, writer, etc), to document your work and distribute it as you see fit to the world—for money or no money.

Crypto

Shutterstock

Of course, to the outside world, crypto is what got wildly popularized instead of blockchain because of mass financial gain. What many may not realize is that crypto is a subsect of blockchain.

It’s a digital payment system that doesn’t rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. While transactions are public, the owner of the wallet acquiring and transferring crypto doesn’t have to be public.

It is borderless and permissionless, and yes, it may still attract all kinds of actors to it, but the point of a public ledger system is to see exactly what’s going on transparently.

So…why NFTs?

With the introduction of NFTs, or non-fungible tokens—something we can create or own as a store of value—we now see a use case on the blockchain whereby our work and creativity can not only be acquired by others, but they can provide additional utilities and benefits all while protecting ownership, transparency and authentication.

This is what we call the “Internet of Value.”

As an innovator, creator, entrepreneur, artist, etc., I create something that someone finds value in, which can be writing, formulas, books, art, audio, business models—literally anything.

YOU MAY ALSO LIKE: HOW TECH IS THE SECRET TO A SMARTER, MORE HOLISTIC HEALTHY HOME

With the introduction of NFTs, or non-fungible tokens—something we can create or own as a store of value—we now see a use case on the blockchain whereby our work and creativity can not only be acquired by others, but they can provide additional utilities and benefits all while protecting ownership, transparency and authentication.

NFT

Shutterstock

I add utilities to it, or functions and benefits built into the code of owning this piece of work or art (smart contracts), and now you, the acquirer of my work, receive those benefits.

Let me demonstrate this concept with an example to make this more streamlined and less “techie.”

Let’s say I’m a musician and I am currently one of eight million artists who use Spotify (Web 2) to distribute my music and earn revenue. Currently, it is estimated that 14,000 artists earn around $50,000 / year from Spotify for streaming their music and the rest make less than that. That’s not a very good statistic if I’m an artist generating millions of streams.

Now let’s say I decide to create an NFT, a process in which I upload all the files associated with my work and offerings. 

Instead of uploading to a Web 2 platform, I now use a Web 3 platform, which looks exactly the same, but instead it takes my information and creates a “smart contract” in the process of uploading. That is, everything I want the acquirer of my work to receive while also tracking my royalties.

I create my new album, include all of the artwork, add a 15 percent discount on all of my concerts until 2025, and add a 10 percent discount on all of my merchandise until 2024. For this project, I only make 5,000 NFTs available and the cost of purchasing this is roughly $250. For the reader, think of this like buying a Costco membership one time.

Additionally, I build in a royalty of 10 percent every time a person decides to sell that NFT in the secondary market to another person willing to pay them for it because there are none left available from the original 5,000.

I, the artist, sell out my NFTs to at least 5,000 of my fans (followers, subscribers, customers, etc.) and that nets me $1,250,000. Instead of having to stream my music millions of times to millions of people, I earned net revenue of $1.25M for 5,000 raving fans.

And because you own the NFT, and all the privileges that come with it, you may find it goes up in value as me, the creator, continues to do good work, take care of my brand and grow in value. Or maybe the market wants to buy it from you because there’s more demand. Either way, my value is your value.

Moreover, as the value of my work is going up, a fan decides to resell the NFT for $750, or 2x what they paid. They earned money selling, I earned a royalty of $75, and the smart contract automatically tracked this, ensuring $75 is directly deposited into my digital wallet without ever having to contact the individual for my royalty payments.

This is the Internet of Value. In this new Web 3 dynamic, we don’t necessarily need to sell and market to millions and millions of people. We need to add value to our most loyal fans and customers of our work.

You May Also Like

Iconic Life Black Horizontal Logo

Get The Latest!
Luxury in Your Inbox