(2021-02-27) Dixon NFTs And A Thousand True Fans

Chris Dixon: NFTs and a Thousand True Fans. In his classic 2008 essay “1000 True Fans,” Kevin Kelly predicted that the internet would transform the economics of creative activities.

Kelly’s vision was that the internet was the ultimate matchmaker, enabling 21st century patronage.

But the internet took a detour. Centralized social platforms became the dominant way for creators and fans to connect. The platforms used this power to become the new intermediaries — inserting ads and algorithmic recommendations between creators and users while keeping most of the revenue for themselves.

The good news is that the internet is trending back to Kelly’s vision. For example, many top writers on Substack earn far more than they did at salaried jobs.

Crypto, and specifically NFTs (non-fungible tokens), can accelerate the trend of creators monetizing directly with their fans.

NFTs are blockchain-based records that uniquely represent pieces of media.

there are three important reasons why NFTs offer fundamentally better economics for creators

The first, already alluded to above, is by removing rent-seeking intermediaries.

The second way NFTs change creator economics is by enabling granular price tiering.

NFTs go farther than non-crypto products in that they are easily sliced and diced into a descending series of pricing tiers. NBA Top Shot cards range from over $100K to a few dollars

The third and most important way NFTs change creator economics is by making users owners, thereby reducing customer acquisition costs to near zero. (MLM)

peer-to-peer marketing, fueled by community, excitement, and ownership.

Their utility will increase as digital experiences are built around them, including marketplaces, social networks, showcases, games, and virtual worlds. It’s also likely that other consumer-facing crypto products emerge that pair with NFTs. Modern video games like Fortnite contain sophisticated economies that mix fungible tokens like V-Bucks with NFTs/virtual goods like skins. Someday every internet community might have its own micro-economy (virtual economy), including NFTs and fungible tokens that users can use, own, and collect.

Incumbent social media platforms sidetracked this vision by locking creators into a bundle of distribution and monetization. There are, correspondingly, two ways to challenge them: take the users, or take the money. Crypto and NFTs give us a new way to take the money.