Last year, the explosion of NFTs in the digital marketplace put the term “non-fungible tokens” on the map.
NFTs, which are unique digital assets that live on the blockchain, started to gain steam in the digital art world, but quickly expanded into luxury fashion, music, video games, social media and sports. Pop culture became saturated with NFTs throughout 2021, from X-ray images of William Shatner’s tooth, to a digital replica of Twitter founder Jack Dorsey’s first tweet and numerous memes preserved as NFTs.
Enter 2022, and NFTs are becoming even more mainstream. Samsung, for instance, unveiled plans to bring NFT marketplaces to its smart TVs ahead of the 2022 Consumer Electronics Show (CES).
Erick Calderon, founder and CEO at NFT platform Art Blocks, gave a beginner’s guide to NFTs at CES 2022 on Wednesday. The session, titled “NFTs, WTF,” was moderated by Lesley Silverman, head of digital assets at United Talent Agency. Paris Hilton was scheduled for the session, but was unable to attend.
Below are a few key takeaways for marketers from the emerging NFTs space.
What’s the definition of a NFT?
NFT stands for a “non-fungible token,” which is guaranteed to be a one-of-a-kind digital asset that lives on the blockchain. The first NFTs were created in 2017 before the term even existed. Shortly after, crypto-kitties and crypto-sharks coined the term on the market and standardized Smart Contracts, a program that runs on the Ethereum blockchain which is like a “paper contract operated by a computer,” said Calderon.
“I think if there’s a single takeaway, for the first time in history, we’re able to prove that we own a digital asset,” he added.
What’s an easy metaphor to describe NFTs in the real world?
“If you owe me 10 bucks, I don’t really care which 10 $1 bills you give me, so the $1 bill is fungible” said Calderon. “An NFT, or a non-fungible thing, is something where I would care that you gave me this specific dollar bill because this specific dollar bill is unique to the other ones.
“A non-fungible token is something that is guaranteed using Blockchain technology to be 100% unique in a provable way, that there’s just no arguing. The blockchain will tell you and you’re able to prove it,” he added.
How does blockchain fit into this?
Larva Labs’ CryptoPunks project, which creates 24×24 pixel algorithmically generated art images, kickstarted the use of blockchain technology to power NFTs.
CryptoPunks are uniquely generated characters dressed as “punk” men and women. At first, any single person on the Ethereum blockchain could own a CryptoPunk. Now, people must purchase, bid on or offer punks for sale in the marketplace, which operates on the blockchain.
“CryptoPunks on a centralized server would have been a cute, fun art project that would have been maintained within a private ecosystem,” said Calderon. “Instead, they allow you to claim these cute little images on a public ledger. And that public ledger allows me to prove to anybody, without anybody else’s permission, that I own that unique asset.”
What’s the NFT community like?
Calderon called the highly enthusiastic NFT community both “your best friend” and “your biggest enemy,” citing the social platform Discord as the place where the community gathers. He recalled joining Discord to find an alien CryptoPunk, which he could never locate. Instead, Calderon was introduced to the NFT community.
Art Blocks, a platform focused on programmable on demand content stored on the Ethereum Blockchain, connects with its users on Discord. Users can give feedback, which can be “raw” and “instantaneous,” said Calderon.
“Everybody in the world can read that comment that you put in the comment box,” he added. “It’s a whole new paradigm of organizing communities, even if it’s really bitter commentary. But every single time somebody does that, it creates this transparency of what the user feedback is, and what the feelings are in that community. And that is why the NFT space has been able to grow.”