In an episode of the television show Hacks, talent agent Jimmy laments that he missed a Lil Miquela concert in Fortnite. This quip shows how Web3 has become integrated into the cultural landscape. If you weren't aware, Lil Miquela isn't a real person. She's a virtual avatar who is featured in campaigns with Prada and Calvin Klein. She's "friends" with Bella Hadid and Millie Bobbie Brown. So how did we get to a place where a virtual influencer is having a concert in an online video game? Let me explain...
Web3 is the future of the internet
So, what is Web3? One way to think of it is that Web1 was the first iteration of the internet (think AOL and LiveJournal) and Web2 was more social, with users creating or consuming content or goods (think Facebook and Shopify).
Essentially, Web3 is an effort to rebuild the internet in a decentralized fashion in order to empower users, rather than centralized entities, which benefit their owners and stakeholders. In general, Web3 encompasses the blockchain, NFTs, decentralized finance (or DeFi), and cryptocurrency. Popular Web3 brands include Ethereum (cryptocurrency), Bored Ape Yacht Club (NFT project), and Lido (DeFi protocol).
NFTs are the future of creation and community
Madonna, Emily Ratajkowski and Moncler have embraced NFTs. The Strokes performed at an NFT conference. But there is much more to NFTs than just the pop culture phenomenon they've become.
NFTs give creators a new way to monetize their work. They can receive royalties every time their work resells rather than just once. NFTs also challenge the gallery/artist power structure by offering a lower barrier of entry. Another benefit is that crypto and NFTs work 24/7, so you don't have to travel or wait to find a great artist (or song, digital outfit, or virtual parcel… the use case list keeps growing). But first, let's unpack what it all means.
What is an NFT?
NFT stands for non-fungible token. Non-fungible assets are unique and cannot be replaced or replicated, whereas fungible assets are not unique. Dollar bills and Bitcoin, for example, are fungible. There is no difference between one dollar or Bitcoin and another dollar or Bitcoin.
All NFTs are stored on a blockchain, which is a digitally distributed public ledger across a computer network.
Because each NFT is unique, it serves as a built-in receipt or proof of ownership that lives in perpetuity on the blockchain. It can show ownership of digital and IRL real estate, cars, concert tickets, digital clothing items in video games and metaverses, and might represent pretty much anything in the future.
How do NFTs work?
When someone creates (or "mints", as it is called when it publishes), transfers, buys, sells, or does anything with an NFT, the movement is automatically recorded on the blockchain. This record enables permanent and public authentication, and anyone can use it to verify NFT ownership and activity.
One of the most famous quips about NFT art is, "It's just a jpeg! I'll right-click and save it; then it's mine." But that would be like telling people you own a Rothko or Matisse, when you own a Rothko or Matisse print. Anyone can say they have Beeple's “The First 5000 Days” on their desktop, but they need to own the NFT to have a $69 million asset.The future will not be static
NFTs can represent anything, even a lifestyle. Bored Ape Yacht Club, The Hundreds, and Doodles are PFPs (profile pic projects) that offer access to the lively communities that support them.
They can even unlock bonus content like a signed physical copy of an artwork, access to an in-person event with the creator, or lifetime VIP memberships. Starbucks now has an NFT loyalty program where you collect digital stamps to earn rewards such as a trip to their coffee farm in Costa Rica.
Because they're programmed, they can change. For example, Impermanence is an NFT art collection that changes with your current weather conditions. Cryptorchids are digital flowers that you must water every seven days, or they die (and thus, cannot be sold).Where to start
To mint or buy an NFT, check out the marketplaces of OpenSea, Rarible, SuperRare, Tezos, and Polygon.
Whether you’re starting a side hustle as an NFT artist, becoming a collector, or looking for the right digital outfit for the next virtual Ariana Grande concert, mastering these basics will take you far in Web3.