[B-SIDE Podcast] NFTs 101: the creator economy and beyond

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In this B-Side episode, Marissa Trew, marketing manager of TZ APAC, a Singapore-based blockchain consultancy firm speaks with BusinessWorld reporter Michelle Anne P. Soliman about the potential of non-fungible tokens (NFTs) as a tool for conducting business, an investment instrument, or a revenue stream.

TAKEAWAYS

NFTs have business applications beyond crypto art and blockchain games.

NFTs, which represent unique assets on a blockchain, went mainstream because of pieces of digital art that fetched millions at auction, and celebrities like Paris Hilton, Snoop Dogg, and Grimes launching their own digital drops.

But beyond these buzzworthy bits of news, NFTs can also be used in business-to-business transactions such as licensing, supply chain management, and invoicing.

“NFTs have utility far beyond being a digital asset. There’s a large enterprise use case that’s being developed, ”said Ms. Trew. “There’s a lot of actual B2B use cases that NFTs are able to provide well beyond the creator economy in the digital space, in terms of music, art, and collectibles.”

NFTs give artists access to an online network and market.

In the Asia Pacific region, artists are using NFTs to sell their work – not necessarily for $ 69 million as Beeple did at the Christie’s sale, but at less stratospheric prices (Filipino artist Luis Buenaventura III and Argentinian comic book artist Jose Delbo sold 222 editions of Satoshi The Creator – Genesis for $ 1,999 each).

“Digital creators use it as a way to embrace technology to showcase their work,” said Ms. Trew said. “We saw artists making a little bit more money for their work being better able to generate sales, generate their audiences. And largely for digital artists who were traditionally making their money off commissions were now earning higher incomes just based on their original work. ”

‘Proof of Stake’ blockchains are more energy-efficient than their ‘Proof of Work’ counterparts.

Proof of Work blockchains, according to Ms. Trew, are those that require a higher amount of energy consumption such as Bitcoin and Ethereum.

“They require are massive amounts of computing power because the way they process transactions are by validating and solving complex algorithmic puzzles, which requires a strong computer network,” she said.

Meanwhile Proof of Stake is considered a more energy-efficient option.

“It relates on the amount of value users stake to the network to do the same kind of transactions. For example, Tezos is based on the proof of stake consensus mechanism. And just by relative scale, it consumes some estimates put it at 2 million times less energy than Ethereum to conduct the same kinds of transactions, ”she said.

Investing in NFTs is driven by sentiment.

“The NFT discussion about whether it’s considered a future asset class is largely down to how much sentiment and how much you value people see in owning a digital asset over a physical asset,” Ms. Trew said.

“People are having a new source of emotional experience… there is a feeling that’s associated with owning something that’s unique, that’s one of a kind in a digital realm. And that’s very new to people, ”she said.

“Their value comes from scarcity. So, it’s about generating demand over limited supply. ”

Recorded remotely on July 14. Produced by Paolo L. Lopez and Sam L. Marcelo.

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