You can watch all you want, but will you buy it? This is the question at the heart of the creator economy.
As recommendation engines flood us with ephemeral content, entertainment has become instantly relatable, with an endless supply - and free. But as with every other thing that’s in endless supply - sports shoes, Tinder dates or air tickets - this abundance of content has shockingly diminished its value.
A year or so ago, some of us might have asked: who will now pay for content when there’s so much free stuff out there?
The answer came in the form of rare NFTs, with each piece of digital art outbidding the other in open online marketplaces - digital art / content bought because of FOMO and the possibility of reaping profits from secondary sales.
Why did this happen? Because when a lot of content gets devalued, rare content gets super-valued.
Let’s look at some examples: In March 2021, an NFT-linked JPG file called ‘Everydays: The First 5000 Days’, created by digital artist Beeple, sold for $69.3 million. Jack Dorsey sold his first tweet for over $2.9 million.
As with every other speculative asset, the risk has been high. The cryptocurrency entrepreneur who bought Dorsey’s tweet was hoping to sell it for a whopping $48 million, 16 times the price of what he’d bought it at. But after an auction that lasted a week, the highest bid offered was a mere $280.
Also, the rarity quotient, on which most NFT sales revolve, is fast getting replaced with the same perils as Web 2 content - the abundance of digital art on offer, with fewer and fewer investors to back them.
The Great Web 3.0 Pivot
In its essence, the desire to buy premium content has little to do with speculation per se.
True, auctioning has become decentralised through cryptocurrency platforms - but not everyone is a closeted art collector waiting to be liberated from the regulations of fine art auction houses.
The value of NFT collections is built on three pillars: community, culture and utility.
And people are looking for these three things more and more. Potential purchasers want to know: Does this NFT make me part of an amazing community?
Will I get access to a premium product? Will I get real-world value?
So NFT collections with none of the above value offerings are slowly getting filtered out.
What NFTs offer that is uniquely refreshing is their ability to create community and provide access perks online and in real life.
An NFT is not the digital asset itself - it is a gateway that is bringing more transparency to online transactions by being time-stamped on the blockchain.
The ability to prove digital ownership for the first time on the internet is the primary fulcrum on which new adoption is happening.
It’s time for the era of the Digital Certificate.
The Digital Certificate
What is the Digital Certificate? The Digital Certificate serves all purposes of a NFT minus the speculation.
They serve as proof of authenticity, proof of ownership, and proof of community.
The scope for Digital Certificates on blockchain are far wider in real-world terms than what NFTs have traditionally offered.
One of the most promising use cases is the production of digital twins of physical products - luxury items, cars, comic books, rare DVDs, consumer products, and so on.
Charity organizations can use Digital Certificates to raise funding through fiat currency, with the certificate proving proof of community and authenticity.
Examples of Digital Certificates as the primary utility of an NFT abound. Publishing company Pearson is looking at Digital Certificates as a way of earning additional revenues on the sale of second-hand textbooks.
The move to the blockchain is helping Pearson to track the ownership of the textbook and to participate in every sale of that particular item as it goes through its life. Diplomas and transcripts that are annually issued to nearly 100K students by Maharashtra State Board of Skill Development (from India) have been digitized to make them tamper-proof and anchored on the Polygon blockchain.
French brand Arianee is issuing digital certificates that give a digital life to luxury items, experiences, memberships and loyalty programs.
The Rise of Speculation-Free Digital Assets
We will soon see many more use cases of speculation-free Digital Certificates replacing NFTs as the frontrunner in the game of blockchain tech adoption.
With some creator NFTs, companies could, instead of resale in the secondary market, look at ‘gifting’ the purchase / digital collectible option - after holding the asset for a certain period of time.
We are just at the beginning of the Web 3.0 journey, and the next few years will bring to life the true promise of blockchain tech.