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NFT’s (Non-Fungible Tokens) have arguably been the biggest buzzword to come out of blockchain since… well, blockchain. In an arena so often filled with false starts and awash with different use cases for blockchain technology, NFTs are perhaps the most robust and consumer-friendly offering to date.
The rise of NFTs has taken the entertainment, arts, and sports industries by storm, especially in the last year. As the pandemic ravaged the globe and venues and events closed down around the world, suddenly artists and personalities have a new way to reach and engage with fans, giving the people what they want and funding their endeavors at the same time.
Way out west amid the marbled mansions of Beverly Hills, Hollywood’s stars (and, to be fair, their agents) have been relatively quick to realize the potential of NFTs to keep their brands and work front and center in the collective zeitgeist.
Somewhat surprisingly, Hollywood’s emerging Gen Z A-listers weren’t the first group to opt-in for NFTs. As early as July last year, Captain Kirk himself - William Shatner - released a veritable treasure trove of memorabilia on the WAX blockchain. The drop included around 10,000 NFT packs with a combined 125,000 photos spanning Shatner’s career, including a photo of Shatner and Star Trek’s Leonard Nimoy (who played the iconic Mr. Spock) sharing a hug.
Though moderately priced at USD 25 upon release, some assets in the series now command prices well above USD 6,000 on the open market.
Some of LA’s biggest names - including rapper Snoop Dogg, Steve Aoki, Grimes, and more recently Linkin Park’s Mike Shinoda and rapper Doja Cat have all minted NFTs.
And it makes a certain kind of sense for celebrities to do so. NFTs mimic the same style of ‘unique ownership’ that fans have always craved for celebrity collectibles and represent a new money-making frontier not seen since the humble CD hit the stands of record stores.
When it comes to creating NFTs off various kinds of blockchains, Hollywood’s A-Listers aren’t diligently learning the ropes of how to mint NFTs from scratch. In most cases, they’re turning to user-friendly NFT marketplaces that have captured early adopters and increasingly mainstream creators and buyers alike.
NFT marketplaces offer artists the opportunity to mint NFTs without requiring the underlying technical knowledge of how to create the associated smart contract off a blockchain. These platforms allow people to not only mint NFTs, but also securely store, display, and trade NFTs. According to global NFT data resource nonfungible.com, the USD value transferred across August 2021 on the seven leading NFT marketplaces was valued at an estimated USD 356 million. From the entertainment industry’s point of view, it’s starting to look like big business.
The original NFT marketplace, OpenSea, is also the largest, with around USD 6.5 billion total trading volume.
Shawn Mendes and the Tampa Bay Buccaneers’ Rob Gronkowski have used OpenSea as their launchpad into the NFT space, with “Gronk’s” NFT sale netting the sporting star a cool USD 1.6 million.
More recently, artists have started to move away from OpenSea for fear of being lost in the noise. NFT marketplace Nifty Gateway, owned by billionaire founders, the Winklevoss twins, has become somewhat a darling of celebrity NFT sales. Canadian musician Grimes sold a series of nine NFTs on Nifty Gateway for USD 6 million, making her one of the most successful NFT artists to date.
Both OpenSea and Nifty Gateway mint NFTs off the Ethereum blockchain. Like many celebrities who have embraced the NFT craze, Ethereum comes with a certain amount of star power; after Bitcoin, Ethereum is the closest thing the blockchain and crypto worlds have to a household name.
Increasingly though, Ethereum’s high transaction (gas) fees and concerns around the intensive energy consumption associated with Proof of Work (PoW) blockchains have many artists searching for less expensive and more environmentally friendly options.
The next generation of NFT marketplaces looking to capture the custom of artists and collectors have cast their eyes further afield for blockchains to best suit their needs. As environmental concerns about the minting of NFTs on the Ethereum blockchain have gained awareness amongst artists, organizations like hic et nunc (HEN), OneOf, Kalamint, Truesy and AmplifyX have built thriving NFT marketplaces off the Tezos blockchain, attracting big names.
Some of the entertainment industry’s top names, including Linkin Park’s Mike Shinoda, rapper and artist Doja Cat, and rapper The Game, have all recently minted NFTs on marketplaces built on Tezos.
Shinoda recently created an original artwork live on Twitch with fans and minted the NFT on HEN, at the time giving the new piece away for free. At the time of writing, the NFT is now on the open market for around USD 2,200.
Rapper du jour, Doja Cat, went several steps further, announcing two distinct NFT drops on Tezos-powered marketplace OneOf. The series included “The Rise of Planet Doja” and “The Fire of Planet Doja”, with two tiers of tokens and around 26,000 collectibles. The series, now sold out, granted buyers access to the Planet Doja Discord channel and were bundled with tour tickets and other VIP elements.
In comparative terms, minting NFTs on the Tezos blockchain is around 2 million times more energy-efficient than the same task on Ethereum. As energy use and cost are so closely associated with blockchain transaction (gas) fees, minting NFTs on Tezos is also significantly more cost-efficient than Ethereum in fiat currency terms.
The reason Tezos is so efficient – thus more sustainable – is all because of how Tezos’ creators designed the blockchain’s structure. Unlike Proof of Work blockchains, Tezos uses a Liquid Proof of Stake (LPoS) structure. In Proof of Stake (PoS) networks, validators replace miners. Mining is an energy-intensive process where validators solve cryptographic equations to process transactions and acquire cryptocurrencies – so there’s a financial incentive for doing so. However, the process of mining uses reams of computational power, and computers need energy to run. That’s got to come from somewhere and in an age where issues of climate change, fossil fuel use, and decarbonization are front of mind, mining starts to seem outdated and downright bad for the planet and everyone on it.
PoS networks, on the other hand, validate block transactions based on the number of native tokens or coins a validator holds. With Tezos, validators are called ‘bakers.’ Anyone can become a baker with 8,000 ꜩ, commonly called a ‘roll.’ Instead of having to chew up juice to mine cryptocurrencies, bakers come with ‘tez’ in hand and instead are rewarded for their work on validating transactions. This means far less computational power is used in creating the smart contract that underpins the uniqueness of each NFT minted.
Hollywood didn’t event the NFT craze, but they’ve certainly embraced it and given the phenomenon the spotlight it deserves. The rise of unique ownership of digital assets underpinned by blockchains like Tezos will likely spawn a new generation of artists with the potential to do to the entertainment industry what blockchain has done to currency - a more decentralized, egalitarian playing field for creators worldwide.
