Seth Godin on NFTs and my background
The more time and passion that creators devote to chasing the NFT, the more time they’ll spend trying to create the appearance of scarcity and hustling people to believe that the tokens will go up in value. They’ll become promoters of digital tokens more than they are creators. Because that’s the only reason that someone is likely to buy one–like a stock, they hope it will go up in value. Unlike some stocks, it doesn’t pay dividends or come with any other rights. And unlike actual works of art, NFTs aren’t usually aesthetically beautiful on their own, they simply represent something that is.
I respect Mr. Godin. My previous comments about NFTs were mostly centered around their wasteful use of energy and how I feel that those problems will get solved. Godin’s gripe with NFTs mostly center around them being a downright scam. My research into how NFTs work has led me to believe that the technology has some merit. But I think it has a long way to go. And Godin’s take is correct.
Several years ago I worked at a company that created codes to track Certificates of Authenticity (COA) throughout the life of a piece of memorabilia. A signed piece of memorabilia would show up at our warehouse, it’d be authenticated by an expert (either within our company or outside of it), it would be given a COA and a Number. That Number would go along with the product as it changed ownership. Each time it did, the registration for that Number would be changed for a fee. A portion of that fee could, in most circumstances, lead back to the original signer.
Sound familiar? That’s what NFTs are trying to be but for digital goods.
That company and I ended up parting ways due to human reasons. After my Do Not Compete expired I quickly set about improving upon that system and built a prototype for a product called OwnerSwitch. I still have the Twitter username though sadly not the domain name. OwnerSwitch was going to do very much the same thing except for all sorts of things beyond that which came with a COA from any single company. Things from artists and other types of media. I never ended up shipping the product after having spent a few tens-of-thousands of dollars getting it to the point where I could.
So, you see, I’m bullish on the model of NFTs. Goods, digital or otherwise, that can somehow be proven authentic that are traded and can earn the original creator residual income forever is a pretty awesome idea. But as it stands it is “the Wild West” with NFTs and there is a lot of scammy stuff going on, it is burning up energy, and it hasn’t been tightened down yet. But I do think it will be. Perhaps it won’t be NFTs that solves this problem but something else will come along to solve this issue for digital goods.
Though Godin ends by requesting people walk away from NFTs (which I am unsure will happen) be sure to read his entire post. You are likely already subscribed to his blog, right?