NFTs, the Metaverse, and Digital Identity
I thought I would share a thought still forming in my mind. It came from a question that I was asked:
“Will NFTs matter in the gaming and VR/AR worlds?”
My answer was yes. But then I started wondering what that could mean. Imagine a 3D immersive environment along the lines of Second Life. You “decorate” your “home” with “art.” You pop up an obligatory Persistence of Memory Dali print. But is it “real,” and what does real even mean? There is only one original in the physical realm at the MOMA in NYC. But what about the various quality prints that I can buy – at the MOMA, on Amazon, on the street.
How do we know that something is “authorized” or “authentic”? And now, let’s go digital, where data copying is free.
How do people know what’s real when we’re in the digital realm? Naval Ravikant did an excellent job describing this idea on a recent podcast with Tim Ferriss and Chris Dixon. Basically, your game or xR rig will tell you what’s “real” and what is a reproduction, copy or outright fake.
My guess is that there will be a power law of NFT platforms and issuers considered “the real deal.” That is, a small number of NFT platforms/issuers that, when you query the detail behind that Dali on the wall, you say, “OMG – this isn’t a crappy print from the street, this one is from [NFT platform].” The rest will be the equivalent of the poster you can buy on the street for your dorm room. As Naval says in that podcast – it’s the “copy-and-paste jpeg” or the original. (Note: that world avocado image above is a copy-and-paste of an NFT).
This power-law concept presents signalling opportunities galore. But how will this shake out? Will there be preferred NFT Issuers on various platforms? For example, TerraVirtua could be the recognized leader in the Unity gaming realm but may mean nothing – or not even function – in a Facebook/Meta world. If you listen to that podcast I mentioned above, they’ll point out that corporates (e.g. Meta/Facebook) are likely to resist any decentralized NFT use unless they get a “cut.” Remember – when you own the house, the house always wins.
Now think about artists and the way that they sell one original, numerous “limited” prints, perhaps some “artist” prints, and then there are the mass merchandise posters, postcards, coffee coasters, toilet paper (is that a thing? I hope not), etc. Will there be NFT platforms that cater to each of those? Will the artist receive similar portions of the proceeds?
Add in the identities (yes, the digital identities) of the key players – the artist/creator, the seller, the buyer and the platform. Each of those will likely get a cut of the proceeds. For example, GaryVee (the creator) has some NFTs that clear a 10% fee on re-sale. The platform (Opensea.io in GaryVee’s case) adds 2.5%. So the seller is paying a selling fee of 12.5%. Further, of the 10% take that GaryVee brings in, 1% (10% of his fees) goes to charity – which I imagine is handled via a smart contract.
Things are changing.
Just some mid-morning coffee thoughts. Let me know what you think.
Also published on Medium.