F is for 'Fungible'
But The Key Is For It Not To Be.
The format of last week’s newsletter seemed to be well accepted. I haven’t forgotten that I need to close out the two questions; Is It Just Semantics and Would You Pay Friends For Stuff, just click on the links if you have additional comments.
Meanwhile, to this week … and hopefully the right list this time!
Photo Credit: Detail of Beeple's ‘Everydays: the first 5000 days’
(CHRISTIE’S IMAGES LTD. 2021)
“If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire.”
… a quote I found in a great article by Laurie Macfarlane where he argues that ‘To Tackle Inequality, We Need to Start Talking About Where Wealth Comes From’.
The answer is of course from making your assets work for you. That is why I have long advocated that answering ‘What is the Future of Work’, actually solves the wrong problem really well. We should be asking ‘What is the Future of Income’?
Of course HOW you make your assets work for you is a challenge yet to be resolved. The sharing economy is meant to be heading in that direction, but it really doesn’t. It boils down to YOUR assets being leveraged by Corporations to make THEM money.
But, maybe something is finally turning, in the form of NFTs. It is not for me to explain NFTs, but if you need to know, Wikipedia is not a bad starting point.
Here’s the thing … an artist called ‘Beeple’ just sold a collage of 5,000 images taken over thirteen years called ‘Everydays - The First 5000 Days’ for $69,346,250 at Christie’s. You read correctly - just shy of 70 million dollars for a piece of digital art.1
To put this into perspective he is now in the Hockney and Koons stratosphere - those two living artists being the ONLY living artists that have commanded a higher sale price for one of their artworks.2
But it gets better. As far as Beeple is concerned this is just the start because built into his blockchain contract is a clause that says he receives 10% of the sale price each time the art is subsequently sold. So if the first buyer now sells that art for (say) $100 million, Beeple collects an additional $10 million! More importantly, if he sells at a loss - he still collects 10% - say $5 million if the seller decides to sell at $50 million.
Needless to say, NFTs are catching on in the creator community and there is no doubt that there is a novelty factor built-in. I mean Dorsey auctioning the first-ever tweet as an NFT (current bid $2.5 million) or Elon Musk making a song about NFTs, which he is now selling as an NFT are both up there in the ‘trying it on’ category - but they are also opening our eyes to possibilities.
Yes, there will be a bubble. BUT, the principle is going to hold.
Current music model: Record a song put it up on the internet and watch the cents roll in over a period of years.
New music model: Record a song, create an NFT and offer 1 version, 10 versions, 100 versions … fix the price, lock in a future sale percentage. You are in charge of your own supply and demand. The Rolling Stones might make 10,000 copies available, a local Austin artist maybe 10. Beeple’s first foray into NFTs saw him selling 100 identical NFTs at $1 each. In the auction markets, these have now traded up to one of these pieces most recently changing hands at $300,000.
Remember, he has it set up that he gets 10% of ALL future sales. As far as income is concerned, it’s not important what the starting price is - it’s important what limited supply does to the auction price. The key is to create demand amongst your audience by limiting supply.3
Imagine a future where artists all use some version of NFT to sell their work. It would certainly reduce demonstrations outside Spotify’s offices. Just recently for example musicians and producers were again demonstrating outside their offices calling for more transparency around streaming revenues and the company's business practices.
Many people have been arguing for a long time that we have to hold corporations to account for how they manage. Maybe there won’t be any need to if NFTs catch on.
What do you think?
My thanks and appreciation for your continued support, comments, and attention. Please like the post, share through your social channels and forward the email to colleagues, friends, and family that want to join us on this journey and do comment or email me your thoughts.
The art was actually bought by someone with the handle ‘Metakovan’, the anonymous founder of NFT investment fund Metapurse. Is it just a coincidence that the founder of an NFT investment vehicle just spent $67 million in making the world wake up to and understand what NFTs are … GREAT MARKETING?
While the number of bidders for the Beeple was small — 33 in total. They represented a new generation. Christie’s said 91% of the bidders had never been clients of Christie’s before. Nearly two-thirds were millennials or younger, and most were from the U.S.
I smell a whole new science emerging here …
The science emerges from how an artist cracks their perfect supply and demand equation for their piece of art at that moment in time.
Variables, just to start you off … Who am I? How well known am I? How many followers/supporters do I have? What kind of buying power do they have? What is my future like? How will I fair on auctions? Should I take less or more than 10% on future sales? Is my art to keep or to auction?
As I said - it is going to get complicated. Quickly.