Opinions expressed by Entrepreneur contributors are their own.
By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.
These are the words of the Nobel Laureate Paul Krugman from 1998, demonstrating how technology can have more farther-reaching effects than even the most brilliant minds can predict.
To that end, few technological leaps have the power to impact the economy as much as Web3 and NFT infrastructure. Yet, early applications have kept much of the potential utility and economic benefits for creators and entrepreneurial businesses hidden beneath images of costume-wearing animals and cartoon profile pictures. The world has been going ape over NFT art with many a well-to-do individual treating these JPEGs on the blockchain as status symbols, wearing a “Bored Ape” on their profiles instead of, say, a Rolex on their wrist.
Fueled by the surge in online activity and online gaming communities with the promise of metaverse to come, we witnessed the emergence of a new trend: a desire for digital art NFTs. Now the sale of these “digital originals” (verifiable as originals through their address and contract number on the blockchain) rivals their paint-and-brush analog counterparts.
Related: Web3 Is the Future of the Creator Economy
From social media to social marketplace
With Web 2.0, we saw the birth of social media and higher degrees of social interaction both across countries and across continents. This unprecedented level of communication had substantial macro-behavioral and cultural consequences, giving us almost instant snapshots of events around the world. However, with Web3, we are now moving beyond only communication.
Many Gen Y and Gen Z creators are turning down the prospect of traditional jobs in favor of a life where they can be fairly compensated for their value in the online economy. Web3 technology delivers the prospect for financial incentives, art and culture by joining communities of stars and brands where everyone will be more fairly rewarded based upon their value in the economy. Creators can be fairly incentivized as they build their own audience that consumes content and buys products while being given exclusive access, backstage passes and other rewards, even royalties for their involvement.
Until now, despite being given a myriad of free platforms to utilize, creators of all kinds — musicians, coaches, experts, writers, athletes and artists — have been at the mercy of the tech giants and algorithmic gatekeepers. This has been an unfair bargain with large social media platforms keeping almost all of the revenues generated by creators.
Web3 is here to change all of that, but you might be understandably wondering, “How?” How is this emergent technology rebuking and replacing the status quo and championing content creators to provide greater value to their communities? Tokenization of assets on the blockchain has the power to convert audiences into rewarded advertising engines that increase what they earn no matter how big or small by building incentivized, independent, cross-collaborative creator economies. This is a paradigm shift from competition to collaboration and from social media to a true “social marketplace.”
Until recently, in the Web 2.0 and social media era, content creators would ask their followers and viewers to “like, comment, subscribe and share.” Yet once the devoted fan completes this mission of showing their support, what does the fan get for their efforts?
Joel Comm, co-host of the Bad Crypto Podcast with over 10 million downloads and known for having minted over 1.5 million NFTs, had this to say: “Now I can reward you as a superfan and AirDrop into your wallet a discount, a bonus NFT, something that you can use for the future. It (Web3) really allows artists of all kinds, not just musicians, any kind of creator to connect with their audience and build community in a meaningful, significant way, so their audience is portable.” says Comm.
Related: This Is What Content Creators and Entrepreneurs Need to Know About Web3
From centralized to decentralized
Despite flooding platforms with content, centralized institutions have held a monopoly on privacy, content, audience and on revenue. Even in the traditional publishing world and music industry, record labels and publishers keep the majority of all earnings while the artists and authors sign contracts to keep a small percentage of royalties. An increasing number of authors, however, are choosing to forgo the traditional route and instead are self-publishing, supported to best-seller status through swathes of their army of YouTube followers buying their book. This can be seen as evidence that a cultural and socio-economic shift is already well underway.
“I don’t need to go to these massive studios or labels. I can go directly to my audience.” says Comm.
One such platform aiming to help usher in this new era of collaborative success is StarStake. According to their homepage, “StarStake is collaborative commerce — launching the creators of today into the stars of tomorrow.” StarStake firmly believes we are witnessing a turn in the creator-community economy and wishes to play a leading role in facilitating this evolution and revolution.
Chris Hawk, CEO of StarStake says, “Traditional creator-community relationships are limited, with minimal contributions and meager returns. StarStake removes the financial barriers for creators to earn more — reward their communities — and grow together.”
Serial entrepreneur, Gary Vee, said in one of his talks that what the internet has done for information and data, NFTs will do for transactions and contracts, making us still in the visionary stage of the adoption curve of this new technology.
NFTs are evolving beyond vanity to utility and are increasingly being endowed with powers such as exclusive memberships, reward contracts, perks, privileges and even access to products. The power may be tipping from the platforms to the people. Whether you are a creator or a consumer, the good news is you are still very early. Ultimately, the creators and their communities, through their newfound, deepened interaction, will decide what this technology is to become.
Related: Why Web 3.0 Will Change the Current State of the Attention Economy Drastically