🎙️164 - We’re Early: How The Next 100,000,000 Will Enter NFTs
**DISCLAIMER: Nothing in this newsletter, podcast, or publication, should be considered financial or trading advice of any kind. Please do your own thorough research and make your own trading decisions.”
We really thought 2022 would be “the” year.
Following a 2021 where many heard the term “NFT” for the first time, non fungibles burst out of the gate in January 2022 with a record setting month that saw nearly $5B in sales on OpenSea alone (almost 1/3 of 2021’s total).
But if you’re reading this anywhere near the time it was written, then you know that 2022 will be marked by the first NFT bear market. Or even worse - merely the start of that bear.
For reasons far beyond the control of our dear industry, NFTs and their parent cryptocurrencies are down hard right now. And rather than pump the doom and gloom, I think its far more productive to skip a few years into the future.
Beyond the bear. Beyond inflation rates. And beyond our current understanding of NFTs.
There is a wave of adoption coming. We don’t know when. We don’t know how. But we do know - or at least many of us hope - that one day we will welcome millions, if not billions more into NFTs.
So today’s episode is focused on that wave.
Today’s Pod - We’re Early: How The Next 100M people will enter NFTs
NFTs: Something Special For Every Person
When I first started looking at crypto in a more “serious” way, I went looking for practical use cases.
The technology was exciting, yes. But I needed to know how and why this could become a larger part of our day to day lives. I understood that there was potential, I just hadn’t found it yet.
Then came that glorious day I found NFTs. And with it my personal mission statement in this space:
Crypto is for everybody.
When I found NFTs, I saw boundless use cases. Collectibles. Gaming. Ticketing. Authenticity. Proof. I finally saw that crypto’s core values were capable of birthing exciting applications, beyond finance and “a new gold”.
Much like the internet - which definitely does boast a practical use case for basically every person on earth - it was clear it would take time, perhaps decades, for crypto to be in every proverbial household, and for NFTs to fulfill their own part of that destiny.
And despite this most recent NFT bull run, the reality is that there are still very few people in the world who actually own an NFT, and even fewer that know how to use them.
Or rather, have use for them.
I originally set out to write a pod about how it would be large IPs and sports that would take NFTs to the next level - but in researching and learning, I quickly discovered that today’s brands will be a but small part of that equation.
Rather, the next wave of adoption - the one that brings in 100,000,000 actual living breathing people (not just wallets) - will be driven by a far more potent human force:
Networks.
web3 and its adoption will be driven by Networks.
The tokenization of Networks..
The quantifying of Networks..
The new frontier of Networks..
The collective power of Networks..
So in today’s podcast (and now, accompanying blog post), we’ll explore how Networks can, could, and will drive the next 100M people into NFTs.
Adoption Target: 100,000,000
First, let’s set the table with cold hard numbers.
100,000,000 people sounds like a moonshot. But honestly when I started off in NFTs two years ago, so did 10,000.
For the purpose of this essay, we’ll use this big sexy number as a means to justify some potentially irresponsible predictions and suggestions. Which is fine because I think we can all agree that hitting 100M will definitely require a dramatically different approach that our current state of being.
By The Numbers
To start to understand how the industry will climb this mountain, lets look at the data.
As of June 12, 2022:
$1.09 trillion…Total Crypto Market Cap per CoinMarketCap
$12.2 billion…Total NFT Market Cap per CoinMarketCap
98 million…Total Coinbase Wallets per Coinbase
21 million…Total Monthly MetaMask Users per EarthWeb
2.4 million…Total Axie Infinity Traders per Cryptoslam
1.8 million…Total Opensea Traders per DappRadar
360,000…Total NFT Owners as per The Financial Times
Now that last figure seems incredibly low given the total “traders” on OpenSea and Axie, but for the sake of our ambitious goal of 100M, lets roll with it.
360,000 people in NFTs.
That’s just 0.36% of our goal of 100M.
That’s just 0.0045% of the world’s population.
That’s just 1 in every 22,222 people that currently have an NFT.
The 100M club
To look at this in the larger context of tech, and to understand just how enormous (yet maybe achievable) our goal really is, let’s see what else has 100,000,000 users.
Tech brands with 100M users:
Twitch has 140m monthly active users (per Backlinko)
Nintendo has 100m annual playing users (per techcrunch)
Apple News has 100m monthly active users (per cbj.ca)
Google Meet has 100m daily active participants (per Forbes)
Strava has 100m users (per GearJunkie)
Looking at this list - its not really a fair comparison at all.
NFTs are both a cultural platform and a technology, so we should also compare their potential adoption rates to industrial shifts like smart phones.
Looking at technology adoption in the US, we can see that items like Tablets and Smart Phones have all moved from 10% household adoption to 70%+ adoption within within literally a handful of years. Whereas things like Radios, and landlines took decades.
So with just the data in mind, we can conclude that:
NFTs are still just 1% of the crypto market cap
NFTs are nowhere the usage of commodities like Nintendo and Strava
Tech adoption is way faster than it used to be, and if NFTs are going to live on current devices, then they won’t need a device-based shift to explode.
With all this in mind, and assuming we are all NFT-maxis here and view this potential through rose colored glasses - scaling NFTs 277x their current size is actual not all that unfathomable.
Its more a matter of How, When, and Why.
The Barriers To Adoption
There are more questions and possibilities than there are answers and affirmations, so let’s focus on each step of adoption for our hypothetical 100,000,000 newbies.
1. Their first crypto wallet
There are literally dozens, if not hundreds, of Web3 companies vying for this. Yes, Coinbase claims they already have 98 million verified users, but that’s far from actual NFT ownership.
Will the next 100M NFT wallets be…
Non custodial?
On Ethereum, Solana, or Flow?
Created by choice or out of necessity?
2. Their first NFT
Also an area of hot competition. Ethereum is still not the easiest place to buy an NFT, although many marketplaces (including OpenSea) now boast a fiat option.
Will the next 100M NFT owners get their token by….
Minting them for free?
Minting their own?
Having it issued to them involuntarily?
3. Their first use case
The all important driver.
We didn’t use the internet until it made information collecting easy.
We didn’t use smart phones until they made cameras and phonebooks easy.
And we won’t use NFTs until they make…what easy?
In terms of simplicity, do NFTs makes Collectibles easier? Gaming? Ticketing? Authenticity? Proof? Or is it a deeper meaning way beyond those use cases…
The Breakthrough
We’ve reached the speculative part of the essay, so everything from here should be taken with a grain of salt.
I want us to hit 100M, I really do. But there is no way for me to be right about how it will happen.
There are still too few creators in the space, and too few possibilities that have been thought of. I truly believe that the idea that drives mass NFT adoption will be created by someone who is still a teenager and has yet to even touch the tech (must like the early pre-Zuckerberg days of social media).
The least I can do is throw darts at the wall.
Digital Attendance
If you’ve been following The First Mint for a while, you know that I’m huge fan of POAP - Proof of Attendance Protocol. A token-bound record of events or places you’ve been to.
Now imagine you had a POAP for every event you’ve ever attended, including:
Concerts
Sports Matches
Birthday Parties
And then take it a step further and imagine you had a record of every time you:
Went to church
Went to school
Went to a store
Considering that our phones now track our movements, added a quantified layer of attendance to our physical placements is not obscene. And if leveraged properly and safely by our communities (i.e. our Networks), the adoption rate could be exponential.
All it would take is a smart phone app that mints the NFTs as you go.
The Metaverse Office
I don’t want to offend anyone who loves digital worlds, but there is no way we are ever going to spend huge portions of time in digital metaverses like Decentraland.
For gaming, yes, maybe (i.e. Fortnite for blockchain).
But for concerts? Theatre? Brands?
No chance. People have been trying to make the consumer metaverse happen since Nintendo’s Virtual Boy, and every version has sucked.
But a virtual metaverse office? I could see that happening.
We already spend half our work time in Zoom or Google Meet, and those platforms have evolved to offer us customizable options like green screen backgrounds and AR filters.
I would totally take a meeting:
In Decentraland or The Sandbox
In the digital version of an exotic location
Disguised as a hilarious avatar
All it would take is an access-granting NFT to a private meta-boardroom.
Diplomas and DMVs
How many people graduate high school every year?
The godfather of Ethereum recently wrote about Soulbound tokens - NFTs that are sent in a one way direction to a verified wallet.
They are non-transferable.
They are non-financial.
They just are.
These theoretical tokens could soon replace hard records that still require paper proof, such as high school diplomas and driver’s licenses (maybe even Passports!). It would definitely make them a lot easier, if the tech was sound and safe.
All it would take is…a total reimagining of decades of corporate paperwork and political red tape.
Hmmm. Ok maybe the least likely to happen first.
Networks
The applications listed above are nice thoughts, but nothing compared to true basis of value on the internet.
Networks.
Much like the rest of crypto, the whole point of NFTs is to connect over shared value - a value in communities and networks that we don’t yet currently quantify or even identify as value.
The Profile Picture (PFP) craze - despite its often ridiculed nature - is the tip of the iceberg to that larger narrative. PFPs are a surface-level signal of belonging, and a market-assigned value of that affinity.
They are proof, beyond reason of doubt, that a network of individuals have captured value together, exclusively online.
How that manifests is literally impossible to imagine.
We never thought that something as potent as of Bored Ape Yacht Club could happen; a community with so much conviction that it spoke a global brand into existence.
So how can we possibly imagine its next and far more practical iteration?
Could it be…
Local communities creating their own NFTs to further quantify their cultural nuances?
Large swaths of customers creating their own NFTs to form consumer-style-DAOs and demand change in large retailers? (rather than just buys stock)
Global workers creating their own NFTs to identify their qualifications on an international level, and bring back the power of the union?
Time will tell. And it could come as soon as the end of this bear.
Moar At The First Mint 📺
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About The First Mint
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