The Everything Token - by Steve Kaczynski and Scott Duke Kominers
ISBN: 0593545109Date read: 2024-02-25
How strongly I recommend it: 1/10
(See my list of 360+ books, for more.)
Go to the Amazon page for details and reviews.
All about NFTs. It’s not a bad book, but last time I looked into NFTs was 2020, so I thought this 2024 deep dive into the subject would provide more intriguing applications for NFTs developed over the last three years. But nope. I still can’t find anything interesting about them. It’s probably my fault.
my notes
Each NFT is an individually distinct digital record, which can be linked to other assets or product features, and whose owner(s) can be consistently identified.
The computer account that controls it can be consistently identified.
The owner is whoever controls the token.
NFTs can be linked to other assets or product features, extending the concept of digital ownership beyond just the token itself.
We associate a physical deed with land or a car, or a marriage certificate.
Tungsten cube: The holder of the NFT has the right to touch the cube once per year, and/or “burn” the NFT - meaning it’s deleted from existence forever - and have the cube delivered via freight truck.
NFTs eliminate the need for an art gallery or other intermediary to track this sequence of ownership and resale.
Because both the NFT and the associated image exist as digital assets, it’s especially easy to link them together.
Because NFTs are embedded in software, it’s often possible to give them functionality over and above just recording ownership.
NFTs are software.
Both creators and third parties can build on top of NFTs.
Event tickets, credentials like digital diplomas.
Digital business cards - NFT artist Bryan Brinkman gives them out when he meets people.
Just like in physical spaces, owning something online gives someone more opportunities than if they are just leasing or borrowing it.
Something that you fully control and can use anywhere on the internet is better than having that item locked inside of a single platform.
To use any given NFT trading platform, for example, you just log in with your digital wallet, and the NFTs you hold are populated and available for trading immediately.
Terms of service are encoded on the blockchain in order to make them both easy to reference and immutable.
Some NFTs may grant ownership over a record of an accomplishment, or other activity that’s personally attached to you.
There is no way to transfer that accomplishment or activity to someone else.
These are referred to as soul-bound tokens.
Businesses could try to poach competitors’ loyal customers by offering special benefits to holders of those competitors’ NFTs - a novel version of the competitive strategy that already exists called status match.
Imagine if you were the top tier in Marriott, and Hilton could directly offer you the right to transfer your status over to them!
Making loyalty status transparent and easily transferable may lead to increased competition.
One of the simplest yet surprisingly valuable applications of NFTs is to use them to record and memorialize events and experiences.
Like digital badges or stickers - they signify “I was here” or “I did this.”
This is the Proof of Attendance Protocol (POAP).
Digital diplomas are themselves a type of POAP.
NTFs are becoming part of people’s online reputation.
Digital badges for attending events existed for at least a decade prior, but there was no standardized way to collect them - they existed in siloed platforms, or sometimes just as images in email.
It was difficult to keep track of one’s collection before NFTs.
There wasn’t really any way to be sure whether a badge being displayed as an uploaded image was “real”.
The proof is a nontransferable NFT.
Physical-backed NFTs - a digital claim on a physical product, which can be held or exchanged.
Gift or resell the associated products without the need for back-and-forth shipping.
It’s redeemed for physical merchandise.
A physical book can be attached to an NFT copy that’s accessible to whoever scans an IYK chip embedded in the book’s spine.
If the physical book is transferred to a new owner, they can scan the chip to take ownership of the ebook as well.
NFTs Utility: experiences, admission, opportunities, special access, intellectual property, such as the right to use in one’s own commercial ventures.
Use various audio samples in one’s own music compositions.
Airdrop: new NFTs or other assets are delivered to the holders of a given NFT through a process kind of like email or direct deposit.
By looking at blockchain records, it’s possible to see who (or rather, which account) owns a given NFT, and send them something additional.
There’s also a lighter-weight version where instead of direct-depositing the new digital asset, you give holders the right to claim it through a software process the user themselves have to trigger.
Access referred to as token-gating: supporters-only areas.
Your NFT unlocks entry just like a key unlocks a door.
Sometimes, you can receive utility almost passively by simply holding an NFT and choosing not to sell it.
For example, Moonbirds, an NFT brand created by entrepreneur Kevin Rose, introduced a mechanism called nesting whereby owners of their digital owl NFTs would receive escalating rewards based on how long they “stayed in the nest.”
At various predetermined time frames, Moonbird holders received bronze, silver, gold, and diamond nest rewards.
Because the token is portable anywhere online, NFTs provide an elegant user experience which simply requires connecting one’s digital wallet to a website.
Problem for secondary-market ticket sales:
If you’re buying a digital ticket from a reseller, you have to trust that they haven’t sold the same ticket to five other people when only one of you can actually get into the venue.
The secondary market can become a core part of the business model around tickets - rather than something artists and venues have to try to shut down.
Subscription NFT and unlocks content:
Each time the user reads one of those articles, a software process triggers an automatic micropayment from the Times to the Journal-Constitution.
Maybe subscribing to Science also gets you access to all the microbiology articles in various other journals.
Instead of having a copy of an image on Twitter and another copy on Instagram, a person can have a master copy of that image - associated with an NFT in their digital wallet - which Twitter, Instagram, and any other site can read and display.
Anything that can be represented digitally can be represented as an NFT.
In a Web 1 world, you competed to have consumers sign up for your email list.
In a Web3 world, you have to be part of your customers’ digital wallets.
NFT brands have been launched under Creative Commons Zero (CC0) licensing, which means that their core brand assets are available for anyone to build and innovate on - no rights reserved.
Companies have community funds which they call DAOs - decentralized autonomous organizations.
DAOs come in a variety of formats, but the key idea is that members can issue proposals, and then the community of token holders decides which proposals to execute.
A DAO is almost like a decentralized country.
You have a democratic process to pass initiatives, but instead of voting being based on where a person lives, everyone chooses their “country” (and countrymates) by opting in through NFT ownership.
Then the eventual product the DAO creates has a special meaning to the NFT holders who helped shape it.
Someone who loves your ramen restaurant might not have a way to find another fan across town.
But if you both share an NFT that serves as a digital connection and access point, it’s entirely more likely.
Sound.xyz was launched to help artists put out songs as NFTs in numbered editions.
Since early editions are considered more valuable than later editions, backers are incentivized to discover new music early.
Show off the Sound NFTs you’ve collected and prove you were a fan from way back in the day.
Co-development of a book or other creative work relies on defining the community of contributors, and giving them a mechanism to share and evaluate their ideas.