NFTS: Just Jpegs? Digging Deeper Into The Future of NFT’s

NFTS: Just Jpegs? Digging Deeper Into The Future of NFT’s

“Why would someone pay $1,000,000 for a picture of a monkey? It’s just a jpeg”

“Is the NFT industry dead?’

There is a lot of confusion about NFT’s both amongst web3 enthusiasts and those yet to dabble on the blockchain. Of course, like anything with a secondary market (see: baseball cards, beanie babies, pokemon collectibles, gun collectors, art colelctors, etc) there is a speculative aspect to buying and selling these assets. Speculation is typically a combination of intrisinc value, speculative intrinsic value, game theory and timing. 

Intrinsic value is simply what it means to a single individual. If Barry Bonds is your childhood hero, you may value a game worn autographed jersey more than someone else does. If he signed it right in front of you, you may value it more than anyone would ever be willing to pay to take it from you. 

Speculative intrinsic value is what you believe someone out there would be willing pay to for it given what it means to them. You might buy an expensive autographed, game worn jersey even if you don’t value it as such because you speculate that someone out there will value it far more than what you have paid for it. 

It’s not uncommon for ticket scalpers to buy hundreds of tickets to events they have no interest in attending because they believe that there are hundreds of people that will value it more than what they paid to acquire them. 

NFT’s are similar but present and interesting challenge; what are we speculating that people will value? In ticket sales, there is an experience people are valuing, not the ticket itself. In sport memorabilia it’s a connection with or fandom of the sport figure that speculators hope people value, not the price of the item itself.

For examples of this, we look to Gray Wolf Labs. Gray Wolf Labs has been featured on CoinNetwork before in an article called “Changing the Conversation About NFT’s With Wolf Pups”. Gray Wolf Labs publishes companies, brands and project onto the blockchain in a very stealth way to keep speculation so minimum. Instead, they are finding industry movers and shakers and helping them solve their problems using blockchain tech. 

Oftentimes, NFTs are a solution to some of their problems. 

The next three publishing projects from Gray Wolf Labs are Palladium Protocol, The DZP ALL EXCE$$ PASS Celebrity Chef Mark Tarbell’s forthcoming Wine Club, and The Black Swan Web3 Experience. 

All three are existing companies with track records of success spanning decades. So why move to the blockchain and integrate NFTs into and already successful business?

Provenance and Royalties. 

We will use the DZP ALL EXCESS PASS as an example:

Danny Zelikso has been a prominent show promoter for over 50 years. He has worked with the Beatles, Ozzy Osbourne, Shania Twain, The Grateful Dead, Snoop Dogg… you name the artist or comedian and he has worked with and probably become good friends with them. Over those 50 years, Danny has collected thousands of items from autographed beatles guitars to the furniture from Ozy Osbourne’s home. The collection fills 4 homes and 5 storage units in and around Phoenix Arizona

Almost all of it was personally gifted to him, each item has an incredible story. 

Recently, Danny decided it was time to share the collection and the stories with the world and provide exclusive events, opportunities and experiences for the biggest fans of rock and roll history. 

As explained on the one-pager for the membership pass:

 

Beyond the stories

After being kept under wraps for decades, Danny’s truly authentic, iconic, and personal keepsakes are available to you now for the first time. He plans on creating a large museum-like space for one and all to be able to view these treasures, as well as development grants and music tuition incentives for sincere enthusiasts from the proceeds of the collection. DZP All Exce$$ pass holders will get opportunities to win one-of-a-kind memorabilia and get invited to exclusive experiences.

The tech

NFTs are still in the early stages, but their impact on artists and their art is profound. Blockchain technology puts the power back into the hands of artists, performers, creators, and true collectors.

Provenance

The history of collectibles is a long and complicated one due to the complexity of provenance. Provenance is “a proof of ownership of art, antique or collectible, used as a guide to authenticity or quality.” Historically, the origin of an object has been determined by following a trail back to its origin. To determine authenticity, NFTs’ proof of creation is stored on the blockchain and each transaction is permanently recorded on the blockchain, along with its transfer history. Your All Excess Pass can easily be verified as an original since the record is stored securely on the Ethereum network.

Royalties

Marketplaces for secondary sales like eBay and StubHub often make 12-25% of the transaction fees on the secondary and subsequent markets. Rarely does this fee go back to the original creator. The blockchain removes the secondary market fees and allows for royalties or “creator” fees to be coded into the asset and go directly to the original creator or artist.

There is a 10% royalty coded into the All Exce$$ pass, instead of those funds going to a marketplace, they go into improving the pass holder experience.

 

NFTs allow Danny to share the collection and personal experiences while minimizing much of the mundane that comes with memberships sites. No usernames, no passwords, no forgeries. It also lowers the total fees for the buyers, as traditional marketplaces and CC processors wil end up with 20% of each sale from hidden fees, while redirecting the fees to the creators in the form of creator royalties. 

These royalties, unlike ebay or ticketmaster fees, go 100% back into improving the specific experience the buyers of the passes are investing in. 

In other words, for Danny Zelisko, NFT technology presents a solution to an existing problem he and others like him have been facing. It’s not about pumping the price or increasing the speculative value of the NFT. It’s about making incremental improvements to an established brand using the tech most suited to do so.

Are NFTs just jpegs?

Perhaps to many, that is all they will ever bet. But that is certainty not all that they can be. Gray Wolf Labs, Polygon, Horizon/Sequence and many others are bringing in a new wave of NFTs creators that are using NFTs to improve proven products, services and experiences. Since we own a few Wolf Pup NFTs ourselves, we have a front row seat to the growing utility of NFTs in different industries and domains. 

The future of NFT, blockchain tech and Web3 is very bright. The NFT “industry” – meaning speculating on speculation might be dead, it might not. Exciting tech is unpredictable. But NFTs are just getting started. As clarity around regulation comes, more large companies will be adopting and integrating NFT tech for the utilities. They will find ways to use NFT tech that we cannot even imagine at this point in time.

NFTs are certainty not dead. 

Some NFT utilities already adopted and implemented:

  • Starbucks reward program is driven by the blockchain
  • Food services around the world are using blockchain tech for provenance, saving them hours a week on tracking down inventory and verifying authenticity of product
  • A speakeasy in Arizona is using NFTs to verify membership, the NFTs also unlock personal lockers and benefits on location
  • Nike and other apparel companies are using NFT tech to prove ownership and legitimacy of high end products to eliminate forgeries.
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