Whatever happened to NFTs. Some thoughts on Blockchain, and AI.

We were overexcited about NFTs: we all remember those days, when it was easy to make a quick buck. What happened, after the hangover? They are not dead, and there is for sure a place for them, especially in the field of creativity. Let’s say it this way: they have evolved into something else. Other blockchain use cases and, especially, AI are keeping media and everyone else busy.

Numbers, please 

The best places to find facts around blockchain are, for example, a16z’s website, a VC, or The Block, a media outlet. NFTs’ exchange value used to be between $1-2 Bill per week in 2022. It’s down to less than $100 Mill per week now. It’s not zero, to be clear. Gaming, once a cradle of NFT use, is going blockchain free (from Roblox to Epic Games). NFT buyers are less than a million (so, a niche) and tend to hold their position. NFTs represent 1% of all blockchain-based transactions today. Long story, short: it went dramatically down, and it will be very small, if compared to other use cases.

New Gen-s, New You 

In the next five years, we will watch the biggest shift of power in history, with boomers retiring and – metaphorically – passing the baton. From 2030 onwards, Gen Z and Alpha will account for 75% of the global spending power. New Gen-s have relatively less money than previous generations, and are happy to contribute to businesses and community, if rewarded for their participation. In short: even if more money is coming their way, New Gen-s have something to say and want a piece of the pie.

Why bother with NFTs?  

From Beeple to Pak, to Refik Anadol, when NFTs are perfectly executed, they tend to show some common features: (1) code is used to deliver ultra-complex, interactive and customized experiences, ideally containing some AI component; (2) smart contracts regulate a fair exchange of rewards, when NFTs change hands, guaranteeing the planned value of the assets in perpetuity; (3) a community that has the interest, but especially, the tangible incentive (money) to support the value of the network. Net-net, the group is as important as the work for any creative endeavor. The case of Alien Worlds, powered by Dacoco and Animoca Brands, shows that it is feasible to build measurable communities around a shared idea, and do that profitably for all, from creators to fans, to all middlemen involved. Blockchain is, probably, one of the best platforms to co-create, given its public nature and design.

Ok, what about the future? 

Let’s make some predictions around exponential technologies and human creativity, or work. We are always happy to celebrate the ‘work’ and yet not that willing to pay for it. The social media era has educated us to receive everything for free, while Big Tech, like Meta or Alphabet, get the most out of the advertising money being disbursed digitally (with the peak being Facebook, which absorb virtually 100% of branded money spent on our newsfeed). Here are my predictions:

• Cost of blockchains will go down exponentially, thanks to progress in hardware, computing solutions (like ZKP), new generation blockchains, but also the dominant share of stable coins vs. Bitcoin, which is the most energy intensive blockchain on the planet. Yes, Bitcoin will not be the #1 blockchain-powered currency in the future. Public institutions and money managers hate volatility and will lean towards more regulated plays, and national currencies and servers.
• NFTs will evolve into Digital Product Passports, which will protect property, while rewarding fans for their loyalty, promotion and support. Ownership will be certified, and changing hands or trading will be transparent, so that asymmetries will be zero-ed, with no noise and externalities on business and strategic industries like mobility, energy and healthcare.
• AI costs may continue to go up, unless we inject into the global race for the dominant AI model some competition on hardware and software, which will drive prices and energy consumption down. There is another unsustainable feature to AI: independent AI agents may, finally – for Silicon Valley, transform creativity and work into a commodity, which is dangerous. AI will lift creativity, but tech cannot dilute the value of the human ability to imagine a different future. True creativity is gold and needs to be paid, dearly. That’s where blockchain could help: AI needs to remain human-friendly.

I am not worried about AI and its impact on the environment, as much as I am worried about tech developers (read: Big Tech), who want to monopolize the benefits and rewards of the creators’ economy.

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