There are many debates about how much NFTs are actually worth it. Perhaps the question is not about NFT itself but what runs behind the NFT. NFTs-Based Communities are ideas that NFTs create for membership and identification of a group or organization to believe something together. It becomes a new way to identify yourself to belong in digital communities.
NFTs-Base Communities are using NFTs as their identification tool and gather members together to work or play or interact within the digital communities. They share the same beliefs and work together to toward the same goal. Those NFTs are the proofs.
Here is a 1 min summary of the article if you want to skip the reading.
What Is NFT
NFT or Non-fungible token is a type of cryptocurrency. The difference is that NFT is not divisible like cryptocurrency does. 1 NFT equals 1 NFT. NFT has its unique properties assigned through a smart contract. NFT creates a way to easily identify creators, easily create scarcity and easily reward creators.
NFTs minted through blockchain. They created with certain value to reflect on creators. NFTs are very illiquid and hard to transfer their ownership unless owners want to. It cannot divide into fractions to sell too. NFTs themselves are worthless (it is still a debatable statement) but they can create a unique identification and ownership of digital assets so that people can share and display them to communities. It does not follow old rules of copyrights or intellectual property rights that hinder creativity but to encourages to create more and make a better community for everyone to work with.
How NFTs Help to Build Digital Communities
NFTs are tickets to enter communities. Owning unique NFTs can prove you are part of something and inclusive of certain communities. The idea may come from collectible trading cards but it spins off and become a digital badge to enter certain communities. To work in communities, one may need to contribute their work. Owning NFTs is one way to fund communities and have initial investments to fund more projects.
The Trend of NFTs-Based Communities
Well-known NFTs are all started with communities. Bored Ape Yacht Club, Pundy Penguins, and many other famous NFTs in the crypto community have their own communities to support projects. With Web3 ideas and Metaverse hype, NFTs will play more important roles in the future. Also, the crypto gaming industry will use NFTs to create digital assets and showcase them. Gaming will have other disruption ideas that combine with NFTs and communities to support their future projects.
The DAO 1.0
DAO or Decentralized Autonomous Organization was introduced through the crypto community because the traditional organization with a hierarchical structure was not able to provide everyone with satisfaction. More importantly, DAO was built to work with communities who are not related as employees but a community members to work toward the same goal. It eliminates the hierarchical problem with a single point of failure when one person controlled all resources and operates their own way that costs the companies every other try to build up. Pudgy Penguins community currently vote to force out founders because they fail to deliver promoted projects on time.
The DAO 1.5
When DAO introduced its NFTs into the community, it became one of the funding resources to help the community to have the budget to work on certain projects. It also changed DAO from unidentified members with recognition to becoming NFTs owners to showcase their membership. It provides identification and branding image as a part to join and reward community without actually paying through monetary rewards. When NFTs value rises, the community rises with them.
The Future of NFTs
In the Metaverse, NFTs can be an identification of membership, a piece of art that you digitally own, or a crypto footprint that you contributed certain crypto community. With large brands entering Metaverse, NFTs show the promise for people to join and demonstrate their loyalty to the brand through digital proof by owning branding’ NFTs. It will become a new way of supporting your favorite brands or creators or even your favorite communities.
Whether NFTs have valuation by themselves or not, is an unsettling debate. However, communities built around their NFTs will flourish and offer unique opportunities for their members to rise together with the NFTs they created.
Stay tuned for the 2022 Prediction #7: Metaverse and NFTs
This article is also published in Cryptologist as parnership publication.
Photo by Fakurian Design on Unsplash
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2022 Prediction #1: L1 Scalability
2022 Prediction #2: L2 Bridges
2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
2022 Prediction #6: Defi Insurance
Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.