Hollywood is abuzz about NFTs—nonfungible tokens—the digital assets that are being sold at eye-popping prices by celebrities, athletes, and artists as limited-edition collectibles on blockchain marketplaces.
Prices are being driven by a relatively small group of buyers who made fortunes by getting in early on Bitcoin and other cryptocurrencies. But as the supply of NFTs increases exponentially over the coming months, it is almost universally expected that prices for new NFTs will sputter. The NFT rocket ship has flown to great heights, but like everything that goes up, it must eventually come down. The question is: When and where will it land?
Most people are not Bitcoin billionaires, but almost everyone likes to show off in one way or another. Collecting limited edition digital works created by your favorite rapper, comedian, or football player may become a popular way for regular people to signal their taste and status, especially on social media where NFTs may be used for noncommercial purposes by their owners.
Imagine a future where you can purchase a one-of-a-thousand, 30-second clip from your favorite entertainer. Imagine that you can prove to the world that you are in fact one of only 1,000 people to own it. Imagine you can buy it on your phone for less than the cost of one ticket to see that entertainer in a theater or a stadium. And imagine you can tweet it out to everyone you know, with technology that allows them to play it only once and never to copy it. Technology will allow you to curate your own collection of digitally scarce entertainment, that you can play whenever you like, and display however you like. Imagine that NFTs include interactive features and become commonplace in online gaming.
The celebrities, athletes, and artists in that future may not strike it rich with a single drop of a few NFTs. But NFTs may very well become a normal and meaningful revenue stream for anyone with an engaged fan base and an interest in adapting their work to a new technology.
The future of NFTs may be Main Street, and it may be right around the corner. Venable’s blockchain and entertainment lawyers stand ready to advise businesses and talent looking to get involved in this rapidly evolving space.
Read more about NFTs on our blockchain blog, Blockchain Report.