Creativity is the powerhouse for innovation and transformation. We know that well as advertisers and brand builders. And in real estate it’s long been known, when the artists move into a neighborhood, it won’t be long for revitalization to take hold. There’s an invigorating buzz in the air and investment money follows with multi-million dollar condos popping up like mushrooms.
So it’s no wonder when an NFT artwork was purchased for $69 million, many of us stopped, scratched our heads a bit, and started paying attention to what this whole NFT thing is all about. Non-fungible tokens or NFTs have captivated audiences in the past few weeks. Every major news outlet has tried to explain, in layman’s terms, how this crypto-phenomenon is a game-changer.
The world of NFTs is obscure and complex. I would have been hard-pressed to find anyone in my social circle who knew what an NFT was or that digital art was being minted and sold digitally a month ago. But the truth of the matter is, NFTs are far, far more than just digital art. There is real potential with NFTs in business innovation ranging from fundraising, coupon coding, social currency, collectibles, brand loyalty programs, digital-only fashion—just to name a few of the possibilities. Essentially any digital intellectual asset can be minted as an NFT.
The exciting thing about NFTs is that when someone mints one, the blockchain database renders what is called a smart contract. The smart contract signifies ownership and all transactions are stored on a blockchain ledger. It’s like a letter of authenticity, which is why traditional organizations like Christie’s Auction House find value in smart contracts for art and have quickly adapted to accepting this digital format—everything can be verified for authenticity. Another interesting thing about smart contracts is that each purchase can distribute payments automatically to any configurable, agreed-upon term. Because these payments can be verified and automated, I think we have the potential to see innovative ways of compensation for both businesses and individual contributors for products and services.
Beyond that, NFTs were designed by engineers with altruistic dreams of power decentralization. At this moment, that dream isn’t realized. There are many barriers to entering the NFT ecosphere such as navigating the transfer of money from USD to a cryptocurrency, adaption of a crypto wallet, understanding that a crypto wallet is more than just a place to house money, digital savviness, and the list goes on. At this moment, NFTs are being leveraged by innovative organizations trying to figure out how they can harness the immense creative power NFTs represent for the future.
NFTs are still emerging even though the idea behind them has been around for nearly a decade. To me, it feels like it’s 2003, and I just discovered my cool artsy friends are on this digital platform called MySpace. Back then, the concept that we needed a digital social platform hadn’t been widely accepted or even considered. It seemed obscure, possibly pointless, but there MySpace definitely generated a creative spark. Musicians’ and bands’ adaptation to the platform helped create that intoxicating buzz that fueled the creative community online.
For NFTs, the artists are moving into the neighborhood. Behind the scenes, investors and innovators need to think like Steve Jobs to solve the cumbersome and overly technical approach that is the NFT ecosphere at this moment. Once the barriers to entry have been removed and the system is more focused on the human experience rather than the technical inner workings, only then will we see a more realized expression of the true power of creative innovation through NFTs.