Disclaimer
I am going to start this article with a disclaimer that I realize you may have personal thoughts, concerns, or prejudices towards NTFs and cryptocurrencies. I also understand that some of these terms may be completely foriegn to you. In this article, I will try to explain some of these trending technologies in terms that are easy to understand. I also want to encourage you to read this article with an open mind to maybe gain a better view of the direction the business world may be heading.
Over the past five year or so, I have been learning more about Bitcoin, crypto currencies, and more recently NFTs or non-fungible tokens. As I started this education, I have learned a lot and my thoughts on these technologies have evolved over time and will likely continue to evolve along with these associated ecosystems. I will also mention that the ideas that I will share in this article are very much to help you prepare for the future, not that you have to run and do anything about it today.
My Introduction to Bitcoin
So, let me backup my story to around 2010 when Bitcoin first hit my radar. I remember sitting in my car in Seguin, TX listening to the radio and the radio host was talking about how someone had just bought a Papa John’s pizza, just a large pizza for 10,000 Bitcoin. That was a news headline that day because it is the first time that we saw a real utility for Bitcoin. Still at the time, the guy at the pizza shop probably paid for the pizza out of his pocket and kept the Bitcoin because nobody really understood what Bitcoin was or what it could do. Fast forward to today’s price for Bitcoin, that was about a $300,000,000 pizza! Compare that to the previous high for Bitcoin, that price tag would have been $690,000,000! I guess that’s why they say hindsight is 20/20.
My next exposure to Bitcoin I believe was around 2014 when I was listening to a podcast about investing and the current price of Bitcoin was mentioned to be around $4,000. I was in shock. I could not believe anyone would pay that much for a digital coin that didn’t have any real utility. This did peak my interest though so I started to learn more about Bitcoin and why people would pay so much to own it.
The more I learned, the more it intrigued me. I learned that the creator of Bitcoin is anonymous and once Bitcoin was launched, he/she/they disappeared. This means that Bitcoin is a decentralized monetary system. There is no company headquarters. There is no person to be subpoenaed if someone has a grievance. Instead, there are 1) Bitcoin miners who are competing with other miners by completing complicated mathematical problems to then be rewarded with Bitcoin, 2) individual nodes on the Bitcoin network which validate transactions on the open blockchain ledger. I also learned that in the code for Bitcoin, there will only ever be 21 million in circulation. This is done through programming and the rewards to miners. So there is a fixed supply, and nobody has the authority or ability to create more.
Because of these traits, Bitcoin is often referred to as digital gold as a store of value or a hedge against inflation. However, unlike gold, Bitcoin is easily sent to the other side of the world almost instantaneously. Bitcoin also established what is known as the blockchain which is the technology that all other crypto currencies operate with.
Many other crypto currencies have since spun off from the initial creation of Bitcoin, each with different purposes and utilities. One of the most popular is Etherium which is known for it’s smart contract feature. However there are others such as Solana.
I mention these other crypto currencies because they are often used to transact NFTs.
What is an NFT?
An NFT is a non-fungible token. This means that it is a digital token with unique characteristics that cannot be duplicated, thus giving unique rights of ownership. If you think of a dollar bill, they are essentially all the same. If I asked you to hand me a dollar bill, I don’t care if it is the one in the front of your wallet, or the one in the back, or the one in your pocket, or from your junk drawer, they are all the same and carry the same value. An NFT, there is only one of a kind, each with a unique value.
In an effort to show utility for NFTs, the early adoption was with digital art. A creator or artist can publish or “mint” their art as an NFT and whoever purchases the NFT would be the authentic owner of that art. For me, there were too many holes with this example for me to grasp onto and I quickly dismissed the value of an NFT utility. Then I heard of some examples that caught my interest much like Bitcoin did back in 2014. Think of the title of your home, there is only one, and you are the owner of it. That could easily become an NFT and rather than purchasing title insurance, the owner of the NFT is verified on the blockchain network. I know, as I explain this, that seems like it is really far in the future, and maybe it is but it is coming. The same is true for a drivers license or any government issued ID. They could be issued as an NFT that you keep in your crypto wallet.
As I continued to digest what I was learning about NFTs, I was looking for other ways an NFT could be applied. I heard of Gary Vaynerchuk. Gary is a podcaster, wine seller, and social media influencer. During the pandemic, Gary started an NFT project called VeeFriends. The way it works is Gary minted over 10,000 doodles of different animals such as Passionate Parrot. Each NFT in addition to the art (which was not very special) you also gained access to Gary. Some of the NFTs also gave you 30 minutes of business consulting with Gary, dinner with Gary, or a game of chess with Gary. Gary also promised to hold an annual conference for the holders of his NFT and the NFT serves as your ticket to the conference.
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Since launching VeeFriends, Gary has continued to “airdrop” more assets and value to his NFT holders. There is also a healthy aftermarket for NFTs and because they are bought and sold within the Etherium smart contract network, Gary earns a 10% royalty on every resale of his NFTs.
How NFTs Can Be Utilized
When I heard about VeeFriends, my mind began to wonder and to explore other NFT uses. I was working on a Chamber Podcast Course at the time I learned about VeeFriends. I had the thought of launching my course as an NFT essentially to give access to the course. My thought was if I only had 10 NFTs for my course, once a chamber took the course and learned how to podcast, they no longer have a need for it. Why not allow them to resell the course to another chamber. This would allow for the first chamber to recover their investment after they got the value they needed, and then they would have motivation to resell and essentially market the course to other chambers and I could get a royalty for the ongoing resells of the course. Great idea right? I think it was a great idea, a couple years too early…
That led me to think about chambers in general. As a membership organization, it is all about providing access to information, events, opportunities, products, etc. Why not bundle these offerings into a tiered dues type of NFT project? Because they are based on smart contracts, if a business were to move, they could sell their membership and you would get a commission or royalty. Your ambassadors could purchase multiple NFTs and sell them to other businesses. The NFT would be their ticket to your annual meeting, luncheons, trainings, etc. Businesses could purchase multiple NFTs for other staff members. You could set the terms within the smart contract for how long the NFT was good for, 1 year, 2 years, etc. I hope this is giving you some ideas.
As the idea of NFTs for membership continues to evolve, we could see a time where a DAO could be set up. A DAO is a decentralized autonomous organization. Essentially, this DAO could function as a board of directors. The options are limitless. However, timing is everything. At this stage, I believe education is key. Do what you can to learn about crypto currency, Bitcoin, and NFTs. Play with some “live ammo” or in other words make some small purchases to see how these things work so you know how to educate your members as the time comes.
Again, the purpose of this article is not for you to stop the way you are doing things and to make a hard pivot, but rather as Wayne Gretsky says skate to where the puck is headed rather than where it is.
If you would like to start playing in the crypto world, I do have an affiliate link for Coinbase which would give you and I both $10 worth of Bitcoin if you use the link provided.
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