Digital files are not scarce. We can duplicate digital files on our computer any number of times, or send them to thousands of friends, all with the click of a button, at no cost. There is great utility in this. Information transfer is instant and free, and the worldwide web acts as a public repository for all human knowledge.
However, this poses a problem for digital creatives. Humans value scarcity making it difficult to earn a living by selling digital media unless you’re a well-known artist. Blockchains change this and, for the first time ever, make it possible to create scarce, limited, or rare digital media that others can “own”. We’ll call this “cryptomedia” from now on. Cryptomedia opens up new monetization channels for artists, and fundamentally changes the creator-fan relationship.
Cryptomedia is simply a record on the blockchain that points to a media file. Some powerful properties follow. First, the record is public so anyone can view its contents. Second, the record cannot be changed – it is immutable. Finally, it cannot be deleted, and will exist on the blockchain forever.
Going back to the first point – anyone can verify who created the cryptomedia, when it was created, and who currently owns it. Also, anyone can verify the cryptomedia’s full ownership history, and how much it was purchased for each time it changed hands.
This is called “provenance” and is necessary for assessing any given cryptomedia’s authenticity and rarity. For example, you can prove that your cryptomedia was minted, by the artist, before any imposters were minted down the line. Cryptomedia provenance is superior to that of the traditional art world in terms of accuracy and openness.
Finally, there is a live, 24/7 marketplace embedded in each cryptomedia. Potential buyers place bids on cryptomedia. Owners can set reserve prices for the minimum they are willing to sell the cryptomedia for. At anytime, owners can accept a buy offer, and the cryptomedia and cryptocurrency is automatically swapped via a decentralized exchange. Okay, this last part hasn’t been fully realized yet, but Zora Protocol is close to making it a reality.
Let’s talk about a common criticism of cryptomedia. The media itself exists on the internet and can be accessed by anyone. For example, the cryptomedia shown above, a digital collage by an artist named Beeple, sold for $69M. Anyone can view, download, and share the collage on the internet. Some argue this makes it worthless, but they miss the point. Is the Mona Lisa worthless because anyone can visit the Louvre, view the painting, and take pictures of it? No.
Everyone inherently understands that the original Mona Lisa should be worth more than any reprint, or rendition. And, actually, the demand to see the Mona Lisa increases its notoriety, driving up its economic value in a positive feedback loop.
The same goes for cryptomedia. The more people who view and share it, the more it will be worth. Valuing cryptomedia, like any other work of art, is cultural and subjective. Cryptomedia simply makes it possible for people to own digital media. And this is a very deep idea. It means that individuals can literally own digital culture.
Still not impressed? Let me take one more stab. Why do we value blue check marks on Twitter? The blue check mark indicates that the person behind a Twitter profile has some sort of social status. Twitter has verified this person’s profile for one reason or another, and distinguishes that person’s profile with a blue check. But this simple visual element has real-world value, or significance attached to it.
Right now Instagram is testing similar UI elements that verify the authenticity and ownership of cryptomedia. So, one day, you will be scrolling through your feed, and a post will display a “digital collectible” button on the bottom left, signifying that the Instagram account owns the cryptomedia that was posted.
Now imagine that cryptomedia was created by a famous artist, and several hundred people have placed $1M+ offers on it. This post, the account, and the person behind the account would catch your attention like a blue check mark does now. Of course, not all cryptomedia will be this valuable, but still, most users will want to signal their ownership of digital collectibles on social media.
I believe that cryptomedia will go mainstream when “cryptomedia verification” UI is launched on popular social media platforms. People will get curious when they see this pop up in their feed, and it will be easy to onboard them by offering them a free, and unique cryptomedia that they can post on their account. Twitter, Facebook, and Reddit are all clearly heading in this direction as well.
Cryptomedia is actually part of a larger technology called NFTs, or non-fungible tokens. Cryptomedia is just a specific use-case of NFTs, and what NFTs are most well-known for at this time. You will see NFTs and cryptomedia used interchangeably; however, just know that NFTs are highly general, and being experimented with to represent a variety of digital things like identity, data, in-game items, and land in the metaverse. We will talk more about these emerging use-cases in later Web3 Design Courses.
If you enjoy videos over reading when it comes to online learning then checkout the course on YouTube. This is part 1 of 8 in the NFT Design Course 2022.