Cryptocurrency is bunk. Bitcoin is absolute garbage. Elon Musk is a weirdo.
Okay, now that we’ve gotten rid of those folks (0r at least moved them to the comments), let’s talk about NFTs, or what I like to call “the worst acronym since PCMCIA.” NFTs sound to me like an alien encounter mixed with some kind of low-fee investment fund. But don’t worry, what they’re known as will probably change in the future as they become widely adopted. And they will. NFTs are going to change how future Earthlings think about digital information, art, and ownership.
Before we get to the good, a note about the bad. Like other crypto nonsense, NFTs rely on very powerful computers crunching very difficult equations, which uses a lot of power. Pretty much everything crypto is bad for the environment. That’s an issue that needs to be solved, and it will be. Cryptophiles will claim that many server farms are built near hydro and sources of green energy, but that ignores the fact that demand for energy is growing and for very silly reasons. So yeah, right now NFTs are contributing to greenhouse emissions, and that will only change when all power is green or blockchains are handled differently.
What the hell is a blockchain, you might ask? It’s just an online database. It’s an Excel spreadsheet in the cloud. Nothing more complicated than that.
Okay, it’s a little more complicated. Blockchains are a supposedly un-hackable and un-fakable shared database. Everyone can trust what’s in there, because it’s been verified by other users. The blockchain is public, so people can see who owns what. Now, the accounts used to make transactions are often opaque, so all you can often see is what account now owns how much of a thing, which is why crypto is often used for terrible and nefarious purposes (or for glorified gambling).
NFTs are a little different. This awful acronym stands for non-fungible token, which basically means a unique and indestructible digital commodity. This blog post could be an NFT. As the creator of this blog post, I could agree to sell it to my friend Hank Green for the princely sum of $1. Hank now owns this blog post. Nobody else does. And he can easily verify his ownership because the transaction is on the blockchain (that Excel spreadsheet).
“What’s the big deal?” you might ask. There are tons of big deals, and the more I listen to discussions about NFTs and read others’ thoughts on them, the more I see folks getting this all wrong. NFTs aren’t important because of what the people who don’t care about them think; NFTs are massively important because of what the actual users think. There’s nothing stopping someone from copying and pasting this blog post and sharing it wherever they like. They can do the same for any of my ebooks. There’s a lot of illegal stuff you can already do with digital content that people will continue to do with NFTs. Want to steal music and ebooks all day long? Go right ahead. But those are still multi-billion dollar markets supported by the legitimate users.
So here’s your first lesson on anything to do with NFTs: When you hear someone say, “What’s to stop someone from making a copy of that art?” just walk away. Pretty much any sentence that begins with “What’s to stop someone…” is a sign that this person wants to discuss the criminal activity of an enterprise rather than its uses. Walk away. Nothing interesting will be learned there. All digital art is steal-able right now, and yet the markets for digital art persist and thrive. People pay for it. They pay for Netflix and Disney+ instead of torrenting everything.
Rule #1: Ignore all discussions that focus on the criminal activity.
Side note: this is a little different from crypto, where pretty much the only thing you should discuss is the criminal activity.
So let’s say Hank Green puts together a book about NFTs, or terrible blog posts, or does an audio series on explaining these things. He owns this post now, is its sole owner, so he can do whatever he wants. He can use the blog post in his book and charge money for it. There will be no disputes about the legality of this, because the transaction is on the ledger. Imagine this for stock image photography, cover art, so much else of how digital art is created. In a far enough future, attribution will always be included, and if it isn’t, one can infer that stolen goods are being transacted. NFTs are going to be great for artists.
Many artists are already enjoying income and residuals from the sales of their goods. An original Rick and Morty doodle went for a princely sum. But there will be plenty of uses for not-yet-famous artists as well. Let me give you an example.
Now, keep in mind that this space is in its infancy. NFTs have only been around for a few years, and almost zero innovation has gone into their deployment and use. Right now, NFTs are mostly digital collector’s coins, which have value simply because people value them. Nothing wrong with that. Beanie Babies were a thing, and stamps were not meant to have value above and beyond sending a letter.
But NFTs will become so much more than this. Let’s say I write a book like BEACON 23, and instead of self-publishing it or selling the rights to a publisher, I decide to create 10,000 official numbered copies of this book. I’m going to sell each one for $5. My hope is to sell out of them eventually. But the fun only begins there.
When I set up the BEACON 23 NFT, I include illustrations from Ben Adams and make sure the art is attributed to him. Every original transaction of BEACON 23 sends $0.20 to Ben. Mike Corely, who did the cover art, gets attribution and $0.20. David Gatewood, who edited the book, also gets $0.20. They get a percentage of every transaction, but they also have their names attached to the work in a way that can’t be destroyed or altered. No more wondering who did a piece of art. The creators are intimately tied to the piece. As is the current owner.
But it gets cooler. Once you sell an NFT, the new owner can now do what they please. They might try to sell it for more or less money. Some NFT exchanges will be set up to leave original creators out of these transactions, but I believe the mature NFTs that will come to dominate this space will give the originator full control of all transactions going forward. Which simply means that if someone sells a copy of this book again, the author gets X percentage of that sale. The cover artist gets X percent. And so on.
These will be very small percentages. The owner of the art will be able to recoup most or all of their original investment. But it won’t be insignificant. Think about how used books are currently handled. You buy a book for full price, and the author gets about 15% of what you paid. That’s the last time they’ll make money from that copy of the book. After you read it, you take it to a used bookstore, where you get a measly dollar. Two if you take store credit. The bookstore will then turn around and sell that ratty copy for five bucks, keeping all the profit. This is the prevalent system today that we all know and probably love. It’s terrible for authors and publishers.
In the future, there will be a secondhand market for digital art that includes the artist in every transaction. And I believe legitimate users will see this as far superior. They will enjoy knowing that some of what they are spending is going to support the creators of the art. We know this is true because Patreon does considerable business. But here, the transaction is more transparent: I’m paying you for THIS piece of art. I own it now. I can keep it or sell it to another user.
Consider for a moment your favorite artists and what you would pay to own an original piece from them, even if it’s digital. Would I pay $5 for a Stephen King short story that I really own? Of course I would. I already do that on Amazon, and I don’t really own that work. Amazon could decide to remove it from my device or from sale altogether. I also don’t have the ability to sell this story to someone else. I basically pay for the right to read it, to borrow it, and that’s it.
Same goes for all the music, TV, and cinema we consume. We don’t own it. Never will. With NFTs, that’s no longer true. We not only own a thing, we can prove it.
The major market for NFTs will probably be in the videogame space. You’ll own a sword that’s really yours, that you can sell or trade. Or a castle or a spaceship. These are already massive economies, but it will all become more legitimate. Think it’ll only be gaming and media consumption? The future will only become more digital-centric. Meeting spaces for business, avatars, animations, backdrops, attire, will all be a part of our online lives, and people are going to pay real money to stand apart, to signify their interests and personalities, no different than how we wear t-shirts, watches, or carry expensive handbags today.
Our world is getting more and more digital. How we parcel that world out and assign ownership is tricky, precisely because of all the nefarious “What’s to stop someone from…?” questions. Well, NFTs answer those issues. They will create a marketplace for us legitimate users. And the only rule of NFTs is that these are the only people we concern ourselves with.
10 replies to “NFTs for Authors”
This is the answer I’ve been waiting for. I knew change needed to happen, that another important step was needed for all the digital work out there. Thank you for sharing the future! This gives me hope! Great change ahead!
Fantastic description Hugh ! Right on.
Bien expresado, totalmente de acuerdo.
This is a very well-constructed and enlightening post. My understanding of the crypto-currency phenomenon has expanded, for which I’m grateful. Bitcoin et al don’t really suit my lifestyle, so I’ll stick with the traditional exchange mechanisms I grew up with and which won’t create a financial hole in my simple affairs unless I become egregiously silly.
Thank you, and please keep your posts flowing.
Wow. After reading this i realize my age and lack of digital understanding are for sure showing. Yet, I found it both fascinating and enlightening. Thank you for this explanation and discussion that was very educational and thought provoking. I may have to read it 2 or 3 times to really comprehend but I am willing to bet I will now know digital terms and information that few of us “older folks” will have even heard of.
As society transitions toward digital dominance of most all aspects of our lives, this was an area I had not even thought of. Opens up so many opportunities not available before so I am anxious to see how it evolves. Although I will continue to cherish my extensive and very diverse old school physical books library—of which you have your own couple shelves, Hugh.
Jaron Lanier’s “Who Owns The Future” presented the problem for which this seems to be a workable solution.
Brilliant writing. Thank you for sharing your thoughts and insight. The one thing that 2020 brought to light, is how quickly one’s digital footprint can be removed by someone in authority, who didn’t agree with what was written. Years worth of work and history, destroyed with a push of a button. While there could be a copy of this archived somewhere, by those who pushed the button, or maybe the only archive was from someone who had the foresight to save the original digital content elsewhere. Yet, even with the later, the historical context is forever lost, due to the lost interaction with the original digital text.
We are currently seeing how likes are being manipulated and removed from several social media platforms. Comments are also being removed. One can argue the case both ways, as to the betterment or detriment to society.
Anything digital can be hacked, stolen, manipulated, and deleted at the whim on one person in power. This can’t be done when dozens, hundreds, or millions of physical copies are in the hands of many.
History has proven, the value of an artifact lies in the original physical work. We may go to a museum and appreciate a replica. We may enjoy digitized photos of the artifact. But only one, or a jointly minor few enjoys the physical. It is why it is highly protected and insured. The value lies in there only being one original.
Case in point. I remember watching a video of a book opening you did, where you had a custom designed book cover of one of your books to give as a gift to a friend. What you held in your hands was a one of a kind, which even yourself would never be the sole owner of. WOOL has sold millions of digital and physical copies around the world, yet centuries later whoever is in possession of this gift will have a priceless work of art.
As society claimers towards the digital realm, where we find ourselves closer to digital friends than physical ones, as a society we must contemplate the ROI. Will the loss be greater than what is gained?
I say quite often, “You fictional authors worry me, to what you conjure up in your mind.” So let’s explore some fiction. If WOOL is actually a drug induced prophecy, rather than a fictional work of art, even in the confined underground SILO, where digitized information would be the norm, you acknowledge how small physical objects were highly prized, knowing they were the last of their kind.
The evolution of information will continue to transform. Where it takes us, only time will tell. As in the book 1984, we have been given insight into just how easy it is to destroy and replace history, by those who are in power, when there is no longer any physical evidence or access to the history of the changes, to contradict the new narrative.
What we pass on as historical context to future generations, may or may not be accurate. It depends on how society protects the history of our evolution, as humans living on a small planet called earth.
As an Author inspired by You to (finally) get my works self-published, this synopsis of NFTs gives me hope that I won’t always have to “trust” Amazon to pay me for actual sales (that I never see, because they are done “in the background”). Over the years, I’ve used plenty of stock photos from the net to generate graphics projects (for myself, not for resale), and found as many ways to “borrow” the images as there have been ways to prevent me from doing so.
I’ve grown up now. I recognize that “a workman is worthy of his hire” (as stated in scripture). Therefore, I have been more judicious with what forms of art I spend money on, and I do so knowing that it (should) put food on someone’s table. It has often troubled me to think perhaps the creator of any work I purchase isn’t getting a fair shake in the transaction, especially if done via a large corporation / online third-party reseller system. With NFTs, that should no longer be a lingering doubt.
Thanks for explaining this concept in layman’s terms. It aided in understanding, and provided a glimmer of hope on the horizon.
Just going through some old stuff and ran across this video. Thought you might be interested (https://rumble.com/vehcmp-hugh-howie-how-to-self-publish.html). Not sure if any of this information is still relevant.