NFTs are overhyped, but useful for a creative economy

News: The hype around NFTs may be a gold rush, but it has made an important idea mainstream: Creators need to take back control from Big Tech.

Are NFTs a speculative bubble?

Couple of factors due to which some experts believe to be speculative bubbles:

– Relation of NFTs to Cryptocurrencies, which are in itself based on speculation: Many NFT-based projects have issued their Crypto tokens and like Cryptocurrency, these tokens are also trading at very high prices depending upon the hype the marketing teams of such projects are able to garner.

– Uncertainty over Crypto regulation in India: With the proposed Cryptocurrency Bill to be introduced in the winter session of the Parliament, the regulatory uncertainty that looms over Crypto assets, prevails over NFTs too.

What is the main idea behind NFTs?

Over the years, there has been a relentless centralization and growth in power of Big Tech at the cost of everyone else.

NFTs have emerged as a way out of this Big Tech led monopoly wherein instead of creators, the platforms control everything. For instance: Take TikTok. Even if a creator is able to attract millions of followers, the ultimate authority rests with the platform. The platform controls how much a creator is paid. There is no direct relation with the fans, with the platform always being in the middle, like an intermediary, a gatekeeper.

What are the potential benefits of NFTs?

– Creators are connected directly with fans willing to pay for their creations

– Gives strength to the underlying idea of direct creator-to-audience platforms

– Presently, only a few select creators with millions of followers earn a sizeable income, and the rest earn peanuts or nothing at all. With the emergence of the ‘paid internet‘ mechanisms like NFTs, a far wider array of creators could earn a good wage.

– Moreover, it also frees creators from the tyranny of chasing scale, wherein they’re not always running after the subscriber count. Just 1000 true fans, will be enough for individual creators to be able to earn a decent wage. This will also ensure that we have truly creative content instead of repeated rehashing of old ideas. This also increases the likelihood of the emergence of novel and revolutionary ideas.

For more on NFTs, please read these articles:

– Is Non-Fungible Token (NFT), what digital art needs?

– The use of NFTs by cyber games can explain their utility

– Similarities between Non-Fungible Tokens and worldwide web

Source: This post is based on the article “NFTs are overhyped, but useful for a creative economy” published in Livemint on 8th Dec 2021.