How to Kill Your Loyal Following: Use NFTs for Crowdfunding

[MTF]

Yes Theory (over 7 million subscribers)/Seek Discomfort (590k subscribers) guys have one of the most loyal and invested followers on social media.

Some time ago they sponsored a guy who did a triathlon in the Antarctic. They produced a movie about his adventure and recently announced they would let their fans be partners in this project.

But they made a huge mistake that caused massive backlash from their community.

Namely, they decided to use NFTs instead of traditional crowdfunding as they've done before.

Look at how quickly the fan base turns against you and how much pushback there is from the community under this video:



There are only negative comments there, and many of them from people who've supported them before financially (i.e. repeat customers).

One of the main guys behind this NFT idea says in the video he doesn't even own any crypto or NFTs which I believe makes this even worse from the fan perspective.

There's a good lesson here: before you use any new technology, consider not only how it's going to serve you and your purpose but how it's perceived by your fans (regardless of how great you think it would be for them).

I wonder if they're going to change their decision or go through with it and how it's going to affect their results.

 

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[Madame Peccato]

The same happened to deadmau5. He's an incredibly talented musician with almost 2 million YT subscribers, a thriving Twitch channel, a Masterclass course, and much more.

But when he announced NFTs, this happened:

Spoiler: YT comments on the NFTs' announcement

 

[MTF]

@Madame Peccato damn that was way more harsh than what I posted. I guess this is becoming more and more common. I wonder how it's going to affect the future of NFTs.

 

[Simon Angel]

Yeah, I watched the "Taking a selfie every day from 12 years old to married" guy create a video where he announced he minted all of his selfies into an NFT and he got shit on as well.

 

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[Ernman]

I never could wrap my head around this NFT thing. It always seemed like folks chasing money instead of providing value.

 

[woken]

I never could wrap my head around this NFT thing. It always seemed like folks chasing money instead of providing value.

That’s what it is.

Roast me all you can. I don’t see real value in a picture of a monkey selling at $250k.

Most don’t either.All they is a quick money grab. That’s why reselling markets thrive.

 

[MTF]

It's interesting to see that at this point this isn't ignorance. Many people DO know and understand what NFTs are. They just don't care and don't find them valuable anyway. As the technology develops perhaps it will transmit more value. As it is now, it's very likely that 99.99% of projects will go to zero.

 

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[MTF]

One thing that's misleading with many of these NFT crowdfunding projects is that they say that you'll "own a piece of [x]."

In reality, if they don't explicitly sell a fraction of copyrights with every NFT, you don't own shit.

I wonder how many people end up buying these projects thinking they're owners of something and then realizing they've ended up with stuff that's more related to Monopoly money than any real-world ownership.

 

[LightHouse]

The sentiment here seems to reflect the average cycle of bleeding edge technology. BTC went through the same thing, when the utility isn't there, it sounds dumb because we have no references to it working correctly in our view of the world... eventually it will come around to be useful.

BTC went from some weird code you get thats "exclusive" and you can use it to pay for drugs on silk road, to countries adopting it and it being a viable option to move stated value around the world.

NFT will go through a cycle like that as well, right now it inflated values in "JPGs" but when you see a use case like the NFT being the actual title to your vehicle, deed to your house, or even your drivers license then it becomes more understandable.

 

[LightHouse]

After thinking about this.... another point came to mind. This forum has always stood out as the forum of dreamers and innovators... aka the type of people that find how to make things useful rather than jump on the bandwagon of saying new things are "dumb" because we don't understand.

Nothing is "dumb" that gets to be known this well, it's *our* job to figure out how to use the new technology to create or bring value to society. Let's focus on that rather than just repeating the water cooler talk over and over.

 

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[AristotlesPupil]

The sentiment here seems to reflect the average cycle of bleeding edge technology. BTC went through the same thing, when the utility isn't there, it sounds dumb because we have no references to it working correctly in our view of the world... eventually it will come around to be useful.

BTC went from some weird code you get thats "exclusive" and you can use it to pay for drugs on silk road, to countries adopting it and it being a viable option to move stated value around the world.

NFT will go through a cycle like that as well, right now it inflated values in "JPGs" but when you see a use case like the NFT being the actual title to your vehicle, deed to your house, or even your drivers license then it becomes more understandable.

That's exactly how it should have been used since the beginning. Un-fakeable documents held on a decentralized platform for actual uses in the real world. Not for some memes.

 

[Hong_Kong]

This makes sense as most NFTs aren't backed by anything and the barrier to entry to creating one is low.
I would be curious to see if this negative reaction applied to NFTs backed by physical assets. For example a 100 acre soybean farm in the developing world could raise capital to buy a tractor by selling 20 tokenized acres. Dividends would then be paid out based on quantity of holdings. Although you could do an arrangement like this without blockchain, there is a lack of access to banking in the developing world.

A quick search says that half of people are excluded from financial markets in Africa and the Middle East, a third in Central America, and a third in some former soviet countries.

Whoever solves this problem, of providing these billions of people with access to financial markets will be able to make a lot of money. I think ebanks like N26, Wise (formerly transferwise), microlending services, mPesa all play a role. But the ability to tokenize assets, and have a 'mini-IPO' like event to raise capital for small local businesses could be game changing.

 

[AristotlesPupil]

This makes sense as most NFTs aren't backed by anything and the barrier to entry to creating one is low.
I would be curious to see if this negative reaction applied to NFTs backed by physical assets. For example a 100 acre soybean farm in the developing world could raise capital to buy a tractor by selling 20 tokenized acres. Dividends would then be paid out based on quantity of holdings. Although you could do an arrangement like this without blockchain, there is a lack of access to banking in the developing world.

A quick search says that half of people are excluded from financial markets in Africa and the Middle East, a third in Central America, and a third in some former soviet countries.

Whoever solves this problem, of providing these billions of people with access to financial markets will be able to make a lot of money. I think ebanks like N26, Wise (formerly transferwise), microlending services, mPesa all play a role. But the ability to tokenize assets, and have a 'mini-IPO' like event to raise capital for small local businesses could be game changing.

Yes! Blockchain is so good not only for currency, but almost any and all things related to financial markets. If you can take real-world valuable things, and make them globally accessible through the internet with blockchain, then you democratize wealth accessibility. Of course being poorer will make it so you have less capital to invest, but at least you have access to the same wealth vehicles as everyone else. This is a large scale enterprise however and would require a significant investment up-front, not to mention having a network that very few other people have.

 

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[Jerma]

This makes sense as most NFTs aren't backed by anything and the barrier to entry to creating one is low.
I would be curious to see if this negative reaction applied to NFTs backed by physical assets. For example a 100 acre soybean farm in the developing world could raise capital to buy a tractor by selling 20 tokenized acres. Dividends would then be paid out based on quantity of holdings. Although you could do an arrangement like this without blockchain, there is a lack of access to banking in the developing world.

I don't want to pick on you in particular, but I see a lot of claims like that online. My problem with those claims is that I don't believe people really understand the limitation of the technology. This video is very good at explaining the threat models that crypto can and can't deal with from a technical point of view

View: https://www.youtube.com/watch?v=kbYutOsrpvs

 

[Hong_Kong]

I don't want to pick on you in particular, but I see a lot of claims like that online. My problem with those claims is that I don't believe people really understand the limitation of the technology. This video is very good at explaining the threat models that crypto can and can't deal with from a technical point of view

View: https://www.youtube.com/watch?v=kbYutOsrpvs

Crypto doesn't need to be 100% autonomous to create value. Human based systems, or other checks and balances can be built into the system.

Depending on the threat model, human administrators could be required to approve transfer of tokens from one address to another.

Even if asset based tokenization is not 100% secure, there are billions of people without access to banks or financial markets. Traditional banks most likely aren't interested in their low deposit amounts. Its less about total security more about distributed access to pool capital. It allows unbanked people to form an investment fund, or unbanked people to invest into a fund.

 

[Ernman]

A very interest thread developing here. I'm still not convinced, but please continue the discussion.

 

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[Velo]

Stock market scams were unsurprisingly common back in the 1800s. (They still are - but disguised more carefully)

One of those involved some shady dealer selling you "stock" when in fact it was just some fake certificate that claimed you could "redeem" for the par value at some certain point in time. Of course when that "certain point" in time arrived, you, the hapless defrauded, would find out the note is worth the paper it's printed on.

NFTs are reminiscent of those.

Also you cannot assume "[X] used to be decried as a scam as well, but eventually [X] became accepted by the mainstream, therefore NFTs will be accepted as well." I'm sure if you tallied the list of failed "innovations" over the last 1000 years and stacked them up vs the list of successful ones, the failures = Empire State Building while the successes = shitty 1 story apartment.

 

[Guest-5ty5s4]

The sentiment here seems to reflect the average cycle of bleeding edge technology. BTC went through the same thing, when the utility isn't there, it sounds dumb because we have no references to it working correctly in our view of the world... eventually it will come around to be useful.

BTC went from some weird code you get thats "exclusive" and you can use it to pay for drugs on silk road, to countries adopting it and it being a viable option to move stated value around the world.

NFT will go through a cycle like that as well, right now it inflated values in "JPGs" but when you see a use case like the NFT being the actual title to your vehicle, deed to your house, or even your drivers license then it becomes more understandable.

this makes a lot of sense, but until then, other forms of the technology can still be scams. Not always, but in many cases.

It's not the technology that's a scam, it's what the technology represents...

Here, I give you a piece of paper signifying your ownership of X. If the paper is a legal deed to property, that's great, but if it's a certificate I drew a scribble on and said it entitles you to a lifetime supply of fairy dust, you might not find it valuable.

That's where I'm at on NFTs.

Why TF does anybody need to pay so much for the majority of stuff you can get in NFT form? Most of it is useless, even if the technology is useful. Until the tech is applied to something valuable, there's little value, IMO.

---

The "big thinking" here would be for a fastlaner to actually finally do the inevitable and TAKE that NFT technology and figure out how to tokenize something important, a real document, title, deed, contract, something that matters.

Instead of a jpg of a monkey.

(maybe invoices in a digital store like the next amazon or gumroad or kindle)

 

[Silverfox148]

As a pretty experienced software developer, I just shake my head at most of the these NFT schemes/use case scenarios, it's interesting that a lot of the use cases involve the developing world.
I have listened to hours of people like Naval Ravikant, B. Srinivasan, etc. explain NFTs, blockchain, etc.

It's a technological solution in search of a problem to solve, which is backwards. The more I think about it's just a Silicon Valley types in search of the next big payday along with some pseudo religion/idealism thrown in to make it more believable. They talk about how DEFI, NFTs, Blockchain are going to change the world but it's always somewhere in the future, etc. These Silicon Valley guys got addicted to endless perceived growth and now they keep trying to replicate it with these crazy schemes.

At the end of the day, as long as NFTs are not backed by anything physically I fail to see any relevance. You can bet your behind that the minute they start trying to tie in to the physical as with the example below, a mountain of regulations will fall upon them. They talk about how NFTs will change the world and yet never touch on the fact that the status/qou entrenched powers are going to fight tooth and nail to keep that from happening.

This makes sense as most NFTs aren't backed by anything and the barrier to entry to creating one is low.
I would be curious to see if this negative reaction applied to NFTs backed by physical assets. For example a 100 acre soybean farm in the developing world could raise capital to buy a tractor by selling 20 tokenized acres. Dividends would then be paid out based on quantity of holdings. Although you could do an arrangement like this without blockchain, there is a lack of access to banking in the developing world.

A quick search says that half of people are excluded from financial markets in Africa and the Middle East, a third in Central America, and a third in some former soviet countries.

Whoever solves this problem, of providing these billions of people with access to financial markets will be able to make a lot of money. I think ebanks like N26, Wise (formerly transferwise), microlending services, mPesa all play a role. But the ability to tokenize assets, and have a 'mini-IPO' like event to raise capital for small local businesses could be game changing.

My dad is a farmer in the developing world, if you think something like that would work and the original "investors" would not get cheated/lose their money you are kidding yourself. The first big issue I see is who would verify the yield on the farm, a trusted third party(more layers) ? How do you stop the farmer from selling the tractor/parts and running off with physical money from said sale of tractor/parts, etc. So many questions, how do you go from digital enforcement to actual physical enforcement?

So many holes in these NFTs, right now at this state they are a scam.

 

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[MTF]

The "big thinking" here would be for a fastlaner to actually finally do the inevitable and TAKE that NFT technology and figure out how to tokenize something important, a real document, title, deed, contract, something that matters.

Royalty Exchange does this by letting investors buy music NFTs and get paid royalties in ETH:

About NFT Auctions – Royalty Exchange

Royalty Exchange has launched a trial program to sell royalty assets as NFTs. Here's how it works...

www.royaltyexchange.com

But unlike most NFT transactions, the NFTs sold on Royalty Exchange are not merely digital collectibles whose value is tied to speculation and scarcity. Royalty Exchange NFTs are tied to a stream of royalty income which the owner of the NFT will collect.

Royalty Exchange will then administer royalty payments to the buyer just like it does for all other royalty sales. The only difference is that royalty payments will be made in Ether and paid to the buyer’s crypto wallet. We will convert the royalty payments into Ether just before we pay out the royalties to the NFT owner. Royalty Exchange has 30 days from receipt of royalty payments to pay the NFT owner.

 

[Hong_Kong]

As a pretty experienced software developer, I just shake my head at most of the these NFT schemes/use case scenarios, it's interesting that a lot of the use cases involve the developing world.
I have listened to hours of people like Naval Ravikant, B. Srinivasan, etc. explain NFTs, blockchain, etc.

It's a technological solution in search of a problem to solve, which is backwards. The more I think about it's just a Silicon Valley types in search of the next big payday along with some pseudo religion/idealism thrown in to make it more believable. They talk about how DEFI, NFTs, Blockchain are going to change the world but it's always somewhere in the future, etc. These Silicon Valley guys got addicted to endless perceived growth and now they keep trying to replicate it with these crazy schemes.

At the end of the day, as long as NFTs are not backed by anything physically I fail to see any relevance. You can bet your behind that the minute they start trying to tie in to the physical as with the example below, a mountain of regulations will fall upon them. They talk about how NFTs will change the world and yet never touch on the fact that the status/qou entrenched powers are going to fight tooth and nail to keep that from happening.


My dad is a farmer in the developing world, if you think something like that would work and the original "investors" would not get cheated/lose their money you are kidding yourself. The first big issue I see is who would verify the yield on the farm, a trusted third party(more layers) ? How do you stop the farmer from selling the tractor/parts and running off with physical money from said sale of tractor/parts, etc. So many questions, how do you go from digital enforcement to actual physical enforcement?

So many holes in these NFTs, right now at this state they are a scam.

How do you go from digital enforcement to physical enforcement? Courts, rule of law, and loss of reputation in the community. Could someone steal from investors of an NFT project? Sure, but that same scenario you described happened with Theranos or Bernie Madoff. Stealing from investors is nothing new, and that is part of the risk that comes with each investment.

The farmer that steals a tractor from investors won't be able to raise future investment. While the ones that are honest could be able to continually raise capital.

The legal structure for this can take place in many different ways, which can reduce certain risks you're talking about:

- LLC or holding corp in a sound jurisdiction holds the physical assets. Shares of this LLC are sold in whatever quantity to buyers, dividends are paid out then. 3rd party management company can be hired to oversee the assets.
- Individual retains title to land, NFT is in the form of a mortgage against the land as collateral. Then the NFT holders are entitled to interest payments (which aren't related to the farm's capital like tractors). If the farmer doesn't pay, you can foreclose on the land.

While these enforcement actions would be hard in some places due to property disputes, I can name tons of countries right now in the developing world that are friendly to foreign investors.

Crpyto isn't immune from scams, taking money, hacking or every possible threat. Scams are nothing new. I don't think these downsides can stop the industry as a whole from growing.

 

[Silverfox148]

How do you go from digital enforcement to physical enforcement? Courts, rule of law, and loss of reputation in the community. Could someone steal from investors of an NFT project? Sure, but that same scenario you described happened with Theranos or Bernie Madoff. Stealing from investors is nothing new, and that is part of the risk that comes with each investment.

The farmer that steals a tractor from investors won't be able to raise future investment. While the ones that are honest could be able to continually raise capital.

The legal structure for this can take place in many different ways, which can reduce certain risks you're talking about:

- LLC or holding corp in a sound jurisdiction holds the physical assets. Shares of this LLC are sold in whatever quantity to buyers, dividends are paid out then. 3rd party management company can be hired to oversee the assets.
- Individual retains title to land, NFT is in the form of a mortgage against the land as collateral. Then the NFT holders are entitled to interest payments (which aren't related to the farm's capital like tractors). If the farmer doesn't pay, you can foreclose on the land.

While these enforcement actions would be hard in some places due to property disputes, I can name tons of countries right now in the developing world that are friendly to foreign investors.

Crpyto isn't immune from scams, taking money, hacking or every possible threat. Scams are nothing new. I don't think these downsides can stop the industry as a whole from growing.

So in essence we keep the existing status quo for enforcement while adding the DeFI/NFT layers on top/middle? This is actually an honest question and it was a bit of a setup on my part as it's the most important of all if one is to believe all the hype and hoopla. NFTs at this moment in time at best are simply adding middlemen to existing transactions, which is no different than most Silicon Valley Unicorns (Uber, Tinder, Facebook, Instagram, etc), all these services are nothing more than middle men that are being used to connect humans with each other(supposedly). So far this is the only real application I can see for Defi/NFT.

At worst these are simply scams being used to bilk the unsuspecting out of their money and cover up other very serious deficits/issues with the broader economy/culture.

I have hopes for the coming generations(generation z), it's clear the current system needs a change/reboot, NFT/Defi people are seizing on that sentiment but I fail to see how they are revolutionizing anything in the real world, so far it's just theories , let's hope we see some real world applications sometime soon.

 

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[Xeon]

Last year, my company gave me a choice for my bonus : cash or bitcoin (equivalent amount of cash).

I chose cash.

 

[Hong_Kong]

So in essence we keep the existing status quo for enforcement while adding the DeFI/NFT layers on top/middle? This is actually an honest question and it was a bit of a setup on my part as it's the most important of all if one is to believe all the hype and hoopla. NFTs at this moment in time at best are simply adding middlemen to existing transactions, which is no different than most Silicon Valley Unicorns (Uber, Tinder, Facebook, Instagram, etc), all these services are nothing more than middle men that are being used to connect humans with each other(supposedly). So far this is the only real application I can see for Defi/NFT.

At worst these are simply scams being used to bilk the unsuspecting out of their money and cover up other very serious deficits/issues with the broader economy/culture.

I have hopes for the coming generations(generation z), it's clear the current system needs a change/reboot, NFT/Defi people are seizing on that sentiment but I fail to see how they are revolutionizing anything in the real world, so far it's just theories , let's hope we see some real world applications sometime soon.

Take your example of Uber. Its not an added middleman, if anything its less of a middleman. Previously there were regional taxi services that had to pay for a taxi medallion. Taxi drivers that couldn't own a medallion (sold for hundreds of thousands of dollars) had to rent a taxi from someone who did. In other words, before Uber individual taxi drivers had to pay just to work.

Uber slightly improves this transaction by making a global connection directly between drivers and riders. Crypto slightly improves investing in a similar way. However it doesn't mean there are 0 middlemen - at least for now.

I am seeing too much progress in this area to expect the trend to reverse.

You can use crypto to buy stablecoins, then stake those in wallets to earn a yield. While this isn't 'revolutionary' it essentially a bank account (with interest) without needing to be connected to the traditional finance world.

When you say, how will this change the status quo? It won't. But nothing can change that.

Billions of people without access to traditional financial markets will join the middle class in emerging markets. To capture those dollars - crpyto doesn't need to be perfect, it just needs to have value skews over traditional finance. Easier to sign up, doesn't rely on the local government, etc. are all potential value skews depending on the user.

Just like Uber isn't a perfect utopia network, crpyto won't be a perfect utopia. However that doesn't mean the value skews aren't there.

Choose your developing country of choice, and lookup how to register a company and open a bank account there. Then compare this to opening a crpyto wallet. If you can get the products of traditional finance (savings acc, spending method, investments, loans) without the bank, that's a huge value skew.

 

[Hong_Kong]

Last year, my company gave me a choice for my bonus : cash or bitcoin (equivalent amount of cash).

I chose cash.

In one book I read the entrepreneur used physical gold to motivate employees. For each goal met, there was a gold bar added to a stack inside a locked window. Once the box was filled, everyone at the company gets one gold bar.

Going to work each day, you had to walk by the stack of gold. They said it was intoxicating to look at that much gold.

I plan to do this. Thankfully there is no tax charged on gold bullion where I live.

 

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[StrikingViper69]

In one book I read the entrepreneur used physical gold to motivate employees. For each goal met, there was a gold bar added to a stack inside a locked window. Once the box was filled, everyone at the company gets one gold bar.

Going to work each day, you had to walk by the stack of gold. They said it was intoxicating to look at that much gold.

I plan to do this. Thankfully there is no tax charged on gold bullion where I live.

that's an awesome idea

 

[Nigel B]

That's exactly how it should have been used since the beginning. Un-fakeable documents held on a decentralized platform for actual uses in the real world. Not for some memes.

I think there is a significant future value in artists being able to better control their assets - particularly digital assets through blockchain.

Right now the whole 'market' of NFTs seems to be a strongly INSIDERS manipulated market. As always in unregulated, evolving markets there are some people making out like bandits. Far from NFTs having 'democratized' anything, the surge of external capital from traditional PE and individual investors is making many already rich people richer.

But as someone commented - we're in the 1880's as far as market development is concerned. And as @LightHouse said it's about finding the real value applications and making them work.

@Jerma thanks for the link - always good to get different perspective on these things.

 

[EmotionEngine]

I think there is a significant future value in artists being able to better control their assets - particularly digital assets through blockchain.

Right now the whole 'market' of NFTs seems to be a strongly INSIDERS manipulated market. As always in unregulated, evolving markets there are some people making out like bandits. Far from NFTs having 'democratized' anything, the surge of external capital from traditional PE and individual investors is making many already rich people richer.

But as someone commented - we're in the 1880's as far as market development is concerned. And as @LightHouse said it's about finding the real value applications and making them work.

@Jerma thanks for the link - always good to get different perspective on these things.

I believe the only NFT's that will survive in the long run are ones with actual use like in a videogame or other interactive platforms. (character models, skins, weapons etc.) These characters can also have different RPG attributes that make them more unique. This is 10X better than just simple images and animations because they have actual utility. Van Gogh in the modern era would more than likely still be poor and "starving artist". Not everyone can be Beeple (and has that repeated? Nope.)

Will they survive the hate like in the youtube video: "Line Goes Up - The Problem with NFTs"? Only time will tell.

I'm personally hoping that they succeed in interactive entertainment at least.

[EDIT: And another thing. NFTs can be useful for artists all day long but it's the market that will decide their fate and not artists who like it and "being able to control their assets". The market is a selfish bastard as MJ says, and it will decide whether you are useful or not.]

 

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