One way to view (some) NFTs is as mechanism design to better align the incentives of artists and collectors. In the traditional art world, artists don’t have a big incentive to care about the secondary market; they’ll only get money if they sell their pieces directly. With NFTs, they can get royalties for secondary sales. Having a stake in the secondary sales, the NFT artists now become more interested in their early collectors’ success. Likewise, with how easy it becomes to make secondary sales, the collectors themselves have a direct stake in the artists’ success. The relationship between artist and creators becomes more symbiotic than the traditional seller-buyer relationship. (That said, the difference is gradual because I’m sure professional art collectors also try to promote the artist they invested in.)
A lot of NFTs also focus on utility rather than artistic value. Many NFTs now function as membership tokens to some kind of real-world benefit. Again, what makes them different from things like “tickets” or ordinary club memberships is the potential resale value. Buyers are not only buyers, but always also sellers. They gain a financial interest in the success of the thing.
On the one hand, intertwined financial interests means that NFT products have an inherent marketing/ambassador advantage. At the same time, they can devolve into a pretty degenerate and fake culture where people are incentivized to overestate how much they like a product because their goal is to make a sale.
I mean it can work like that in theory, but… isn’t there a much easier way to achieve the same result without all of the possible disadvantages? Do we really need blockchain to make artists more interested in the early success of their early collector? Can’t… I don’t know… collector and artist just sign a contract with royalties explicitly written in it? I really have a feeling that we are trying to find a problem for our solution, rather than solve the problem.
One way to view (some) NFTs is as mechanism design to better align the incentives of artists and collectors. In the traditional art world, artists don’t have a big incentive to care about the secondary market; they’ll only get money if they sell their pieces directly. With NFTs, they can get royalties for secondary sales. Having a stake in the secondary sales, the NFT artists now become more interested in their early collectors’ success. Likewise, with how easy it becomes to make secondary sales, the collectors themselves have a direct stake in the artists’ success. The relationship between artist and creators becomes more symbiotic than the traditional seller-buyer relationship. (That said, the difference is gradual because I’m sure professional art collectors also try to promote the artist they invested in.)
A lot of NFTs also focus on utility rather than artistic value. Many NFTs now function as membership tokens to some kind of real-world benefit. Again, what makes them different from things like “tickets” or ordinary club memberships is the potential resale value. Buyers are not only buyers, but always also sellers. They gain a financial interest in the success of the thing.
On the one hand, intertwined financial interests means that NFT products have an inherent marketing/ambassador advantage. At the same time, they can devolve into a pretty degenerate and fake culture where people are incentivized to overestate how much they like a product because their goal is to make a sale.
I mean it can work like that in theory, but… isn’t there a much easier way to achieve the same result without all of the possible disadvantages? Do we really need blockchain to make artists more interested in the early success of their early collector? Can’t… I don’t know… collector and artist just sign a contract with royalties explicitly written in it? I really have a feeling that we are trying to find a problem for our solution, rather than solve the problem.