Every Internet Community Might Have Its Own Micro-Economy, Including NFT’s, Someday
“Crypto, and specifically NFTs (non-fungible tokens), can accelerate the trend of creators monetizing directly with their fans,” reads a16z latest blog post written by Chris Dixon, a general partner at Andreessen Horowitz.
While social platforms will continue to be useful for building audiences, creators can increasingly rely on other methods, including NFTs and crypto-enabled economies, to make money, he said.
Non-fungible tokens (NFTs) are gaining a lot of attention lately as people digitize their art, videos, music, gifs, games, text, memes, and any number of things and sell them online.
While NFTs will have their own ups and downs, they offer fundamentally better economics for creators by removing rent-seeking intermediaries, enabling granular price tiering, and reducing customer acquisition costs to near zero by making users owners, he wrote.
As such, this new sector which is still early and will evolve, Dixon believes, will see an increase in their utility as digital experiences are built around them, including marketplaces, social networks, showcases, games, and virtual worlds. He added,
“Someday, every internet community might have its own micro-economy, including NFTs and fungible tokens that users can use, own, and collect.”
In this burgeoning sector, recently, the major auction house Christie’s also joined in through Beeple’s digital art, the payment for which was accepted for the first time in crypto, Ether.
People are pouring in huge amounts of money in these NFTs, with a batch of digital collectibles known as CryptoPunks getting sold for about $1 million in cryptocurrency in just a few minutes recently.
These digital collectibles are created on the Ethereum blockchain using the ERC-721 standard and are embedded into a smart contract.
This obviously has people making copycats, as seen with “Binance Punks.” Larva Labs, the company behind the Punk collectibles, clarified last month that it “has taken the art from CryptoPunks and is selling it as a copy on another chain. This is in no way an authorized project.”
On February 22nd, volume in the NFT space peaked above $64 million and over 44k traders, an uptrend of 114x and 26.5x respectively from the beginning of the year, as per Dapp Radar.
Since then, the volume on NFT marketplaces has come down to just under $16 million and traders to over 25k.