NFTs are Not Beanie Babies

While esteemed publications like Artnet are trumpeting "The Boom and the Bust: How NFTs Went the Way of Beanie Babies " and are quick to dismissively write-off NFTs or couple them with beanie babies and other collectible crazies where investors have fared poorly, I would challenge that such comparisons are unfair.

Scarcity as a driver of value certainly is an important aspect to many NFTs projects, but, like for all art, it’s a balancing act between nourishing the existing community for a particular work or project and building an artist’s range by launching more artwork or projects. One doesn’t necessarily dilute the other if the subject matter is different or adds another dimension that the previous works didn’t. For beanie babies, the scarcity and collectibility narrative was strong until it wasn’t.

When McDonalds was giving them away with Happy Meals and cementing the branding into the consciousness of America, collectors were up on them as resonating with kids and offering cache for those who had limited releases like the Princess Bear or Bubbles the Fish. While these collectibles have lost much of their value, baseball cards have continued to enjoy a sustained tsunami of demand, especially with real estate, stocks, bonds, and all manner of traditional investments getting trashed.

NFTs offer something different. These nonfungible tokens are digitally autographed by the artist and point, in the code, to a media file hosted in the IPFS that can not be taken down, with blockchain-secured tokens that can be bought and sold with trusted on-chain ownership records. A blockchain sleuth can dig into if the NFT art you have is authentic--minted by the wallet of the artist's studio--or not. Physical signatures are easily forged. Digital signatures are cut-and-dry. If there were to be a hack of an artist’s wallet, such news would be freely available and such artwork could be blackballed much in the same way that stolen art is not easily sold—and certainly not by major auction houses—through the stain of a tainted provenance.

Julie Pacino has demonstrated how you can crowdsource a movie through selling NFTs that extend producer credits, participation in the conversation on the movie’s direction, and benefits that make fans feel invested in the production of a movie. Many times these fans are not necessarily concerned with getting back end points or making a profit from their investment, but, rather, just being involved in the movie production process as an educational or uplifting fan experience. Fans will pay many thousands to have this experience, affording the ability for Ms. Pacino to bypass the traditional studio heads—whom have pushed her for involvement by her iconic father or to take the movie into unpalatable directions—and still get the requisite funding on the most favorable terms possible: no strings attached.

Musicians are also starting to appreciate the power of NFTs to meaningfully build a profitability bottom line that has been robbed of them by the traditional streaming services. As the artist T-Pain has been transparent about, it can take thousands of music streams to amount to a single dollar in royalty payments. This is the byproduct of many millions of dollars of lobbying dollars that disfavor artists who have built Los Angeles on the strength of their tenacity and talents. Most artists are forced to tour, sell shirts, or shift value to other mediums in order to eek out a living.

From a musician's perspective, working with Ticketmaster or establishment middlemen is as inescapable as it is irksome and their disintermediation is a welcome change. If NFTs can grant access to tickets to a show or a VIP experience, through favored platforms like Afterparty , this allows them to earn nearly 100% what they sell these NFTs for and extends a collectible for a fan to own and enjoy. Further, each time an NFT is sold, another healthy royalty payment will be sent to the artist. The experience of being able to pay for a VIP fan experience and, after an enthralling night, have an asset that you can sell to other fans who collect NFTs of a particular artist is a powerful experience that is a slam dunk for all involved.

The best spokespeople for a technological tool are often the artists themselves. One of the most powerful speakers at the TechFire NFT conference I attended was Bruno W Agra , who eloquently presented what he wrote about how Web3 ushers in a new era of power for artists and signals a future of greater power for artists through the leveraged use of these blockchain tools currently being perfected. As someone from a band who opened for Metallica?and Linkin Park and has built deep friendships with other accomplished musicians, he's able to communicate the way that NFTs and blockchain-based tools can deliver value to a band's business plan in a more trusted way than an agent or academic.

A great many of the people that enroll in my coursework are trying to sharpen their competencies in these emerging technical concepts in banking, entertainment, or any number of fields undergoing a digitization push. In our information economy, where knowledge work represents the focus of the most coveted white collar jobs remaining stateside, investing in this education is often a sound strategic play. Leveling up your core skill set, if done at an affordable price, can be the fastest return on investment that you’ll see, especially if you have access to favorable student loan financing or work resources who smartly subsidize such ambitious educational pursuits.

As more blockchain leaders take the form of filmmakers like Julie Pacino or rockstars like Bruno Agra, the narrative of Web3’s transformative potential will become more oblivious, leading to the mass adoption that will further separate blockchain/NFTs from beanie babies for the layers of technical innovations that make these digital ledger technologies truly disruptive.