Creating an NFT for a Human Being
Creating an NFT for a Human Being
Using NFTs to tokenize our ideas, our careers and our education
Once in a while I’ll watch an old episode of ‘The Simpsons’. It takes me back to my childhood, and the show seems as funny and insightful as it ever did.
My favourite scene occurs in the episode where Homer goes to clown college and learns to ride a tiny bicycle under the tutelage of Krusty the clown:
A more poignant episode from 1995 sticks in my memory for some reason; the one where Bart sells his soul.
In an effort to make some quick cash, Bart decides to sell his soul to the highest bidder, not anticipating that there might be spiritual and existential consequences. He wrote “Bart’s Soul” on a piece of paper and sold it to his friend Milhouse for $5.
He created a token representing his soul and sold it to register the transfer of ownership of the underlying asset. While the piece of paper was easily lost or duplicated, it was a primitive form of NFT - Milhouse was able to prove ownership of the soul through custody of the paper token.
It came to mind when I first became interested in blockchain technology and contemplated the proliferation of NFTs.
While NFTs are most commonly associated with limited-edition series of JPEG images, like Bored Apes and CryptoPunks, I’ve been keenly exploring other applications of the technology too.
An NFT minted on a blockchain network is far more resilient to tampering, destruction or duplication than a scribbled note on a piece of paper. But the principle is the same - the token represents ‘the thing’ and is worth whatever a buyer is willing to pay for it, both for the status of ownership and the potential utility that comes with the ownership of ‘the thing’.
NFTs — More than a fad or a bubble?
I’ll assume that you’re broadly familiar with NFTs, what they are and what they represent. If not, you can pick up the basics here.
Since discovering NFTs in early 2021 I’ve been keen to explore how they could be used, other than in an artistic context. It seems there are many potential applications that offer real benefit to those who create them and those who buy them.
You don’t have to take my word for it though - new examples and experiments are emerging each week as NFTs are exploited for a variety of purposes:
In December 2021, a Republican Senate Candidate, Blake Masters raised $575,000 towards his political campaign by selling NFTs to donors. The NFTs were images of an original cover design of the book ‘Zero to One’ that Masters co-authored with Peter Thiel. The funds raised are designated to be used to fund his political campaigning. Buyers of his NFT may receive access to members-only events and digital artwork, but he’s also effectively sold ‘shares’ in his future career to donors who want to see him in the Senate. They have staked an interest in him via an NFT.
A Democrat from California, Shrina Kurani also minted and sold NFTs around the same time, with her NFTs representing her policy agenda items regarding blockchain and Web3 technology. The policy documents that buyers have received are a representation of Kurani’s ideas - buyers are supporting her political career financially and at the same time investing in the proliferation of her ideas.
Actress and entrepreneur, Sarah Jessica Parker has issued NFTs as a means of restricting access to an exclusive wine-club with which she is affiliated. Holders of the NFTs will be able to access digital collectibles, virtual tasting events and other benefits. Investors may be able to profit by selling the tokens on to other collectors for a profit in the future if their perceived value increases. The killer move here though, is that by taking part in the project, Parker is monetising her celebrity status and drawing in investors who seek kudos from being associated with her and her wine-club. The NFTs are perceived as more valuable through association with her name and image.
These examples illustrate how creative-thinkers are using NFTs to tokenise their human capital and attract investment by notionally selling the appeal of their image, ideas or a share in the outcomes of their future work.
For the remainder of this article, I’ll be exploring a few theoretical scenarios where we could all exploit NFTs to tokenise ourselves in future. I’m not encouraging you to sell your soul via an NFT but if you should be so inclined then that-too is eminently feasible!
I’ve not gone too deeply into the technical weeds, but have instead tried to illustrate how the ideas could be put into practice.
The technical fundamentals
Having just stated that technical detail is outside of the scope of this piece, a basic understanding of NFTs would be useful. Just in case you’re in need of a reminder, here goes:
An NFT (standing for Non-Fungible Token) is a unique, immutable digitised and encrypted token that is created (minted) and stored using digital blockchain technology.
The tokens can represent a variety of digital media including audio, image, text or video files as well as computer code executed on the blockchain itself. As we’ve already discussed, the tokens can also represent a real-world item (or person). While the token exists on a blockchain, the article itself (whether digital or real-world) may exist somewhere completely separately.
Tokens are bought and sold with using cryptocurrencies, executed on the blockchains where the NFTs reside (such as using ETH tokens on the Ethereum blockchain)
NFTs are a means of establishing and enforcing ‘smart contracts’ between the creator of the NFT (and its corresponding item) and buyers. These contracts exist as code on the blockchain and contractual clauses are executed automatically upon fulfilment of certain conditions (such as when a sale is agreed and money exchanged between crypto wallets).
Such contracts are integral to the operation of a Decentralised Autonomous Organisation (known as a DAO) — effectively a business relationship whose integrity is enforced automatically via code, without the input or oversight of regulators or authorities.
A simple example may help:
Let’s assume that I sell you an NFT representing a digital image that I’ve created and currently own. As part of the NFT, a smart contract exists that contains a number of clauses:
That when you buy it from me, the agreed price is transferred from your crypto-wallet to mine and the NFT will move from my wallet to yours.
That in addition to you buying the NFT, on completion of the sale you’ll receive a digital copy of the image to use, distribute and reproduce as you see fit.
That each time the NFT is sold and transferred to a new owner (if you sell it), I will receive a 5% royalty from the sales proceeds.
The smart contract is created when the NFT is minted, and enforced automatically by computer code on the blockchain. I have no need as creator to keep track of its future ownership to claim my royalties. If I want to find out who owns it at any point I can read its record of ownership on the blockchain. You have no need to prove your ownership of the original article - if you possess the token, you own the item.
Smart contracts and DAOs are one of the many benefits offered by blockchains like Ethereum.
Now you understand the fundamentals, here are a few of the potential ways that NFTs could be used in future to benefit us all in our work and our wider lives other than in an artistic context. They are ways that NFTs can be used in some way to tokenise our human capital.
NFTs for selling a stake in your future
What if you could sell a share in your future career, offering ‘investors’ a stake in your potential success for an up-front investment?
At the outset of your career you could mint a series of NFTs offering buyers a percentage of your future earnings in return for their investment. As the creator of the NFT you’d be raising seed-funding from those who purchased your NFT upfront. The money raised could fund the start-up costs of projects you intend to carry out.
There’s a gamble for the buyers in that you may never amount to anything. For you, there’s the trade-off that if you’re immensely successful then you are pre-committed to giving away a portion of your earnings.
The problem this solves is that many creators and entrepreneurs, particularly those with no track-record, will struggle to secure jobs or funding initially. Selling an NFT with the potential of future payback is one way for investors to take a stake with limited future downside - all risk is upfront.
A smart contract would enforce the terms associated with the NFT, ensuring that holders of your NFT were remunerated as your efforts paid off. If your career was booming in later years then the value of your NFT could conceivably increase meaning that it could be sold on to new buyers for a premium.
Conceptually, this model is akin to selling shares in yourself based on the prospect of future earnings, in much the same way as a corporation seeks funding from venture capitalists or by floating on a stock exchange. The smart contract provides structure and assurance for the buyer.
Using an NFT helps the creator to market themselves based on their future potential without relying upon vague or vain promises. This model would give founders a way to raise money without having to resort to crowdfunding or a kickstarter model.
This seems to offer most potential for talented individuals at the outset of their career who have minimal experience or are otherwise lacking credibility to secure funding or find a job. Offering an NFT provides a means of offering themselves as an investible business opportunity — the smart contract gives investors comfort over the mechanism for receiving payback from their investment.
NFTs for your creations or ideas
What if you could prove that you came up with a million-dollar idea without having to go through the lengthy, costly and time consuming process of filing for copyright or to register intellectual property?
An NFT can be minted to irrefutably record and document moments in time, with evidence associated with that moment attached and stored within the blockchain, forever. This is what was achieved when Twitter founder Jack Dorsey sold his first tweet. The content of the tweet itself isn’t as important as what it represents — the moment in time that a new social media platform sprang to life, how it was used and by who.
Blockchain records are immutable — they cannot be altered and the distributed nodes maintain duplicate records that corroborate each other, preserving the integrity of the network. I imagine that in time we’ll witness the first legal cases where digital evidence from the blockchain enables justice to be served, proving beyond all doubt what happened and when.
It has never been as easy to create and distribute content online, and to share information and ideas freely across the internet. Inevitably, that same infrastructure makes it easy for ideas to be stolen and content plagiarised, altered and manipulated too.
Blockchain allows valuable information to be minted as an NFT and enables its value to be protected and stored, whether its significance is technical, cultural or associated with it being time-sensitive.
Consider an example - What if I were Doc Brown in the movie ‘Back to the Future’ and I wanted to prove that I’d invented the flux capacitor - the technical innovation that made time travel possible (in the best movie ever made)?
I could scan my sketch of the gadget into my computer and mint an NFT of it.
Instantly, I’d possess a time-sensitive and irrefutable record of ownership of the idea, locked forever into the blockchain - I wouldn’t have to rely on a drawing on a napkin:
NFTs and smart contracts to replace employment contracts
Most of us have signed a contract of employment before starting a job. Some may have agreed terms for providing services to a client.
Such contracts stipulate what we’ll do and how we’ll get paid. Early in our careers, most learn that not all members of a team contribute equally to a project’s successes even if they’re paid the same.
How about if a smart-contract determined how much you were paid, based on measurable metrics and your performance and effectiveness in doing your job?
Engineers could be compensated based on the number of lines of code they wrote which made it into the final product.
Marketers could be paid based on the social media posts they made which drew the most engagement or the adverts they created that triggered the most sales.
Product designers could be paid based on the features they conceived and designed which attracted the most positive feedback.
This concept was discussed in a podcast interview between Scott Galloway and his guest, Dror Poleg.
Performance-based compensation wouldn’t work for all employees or all jobs. It would require thoughtful design to make it fair and practical — but it could be a means of incentivising performance in a greater variety of roles.
This would be enabled by each employee’s NFT having terms in its smart contract that automatically rewarded them for exemplary and measurable performance.
Salespeople typically receive a basic salary, with the bulk of earnings paid as commission on sales made. They’re paid based upon how well they do the job they’re paid to do — to sell.
It seems logical that in an ever more competitive world, people should have the opportunity to advance themselves by applying the same principles in other jobs — NFTs could be a means of enabling this.
NFTs that track and reward good ideas
How about if machine algorithms could document meetings and analyse discussions for future comparison to business outcomes? The algorithms could (theoretically) take note of who was responsible for specific ideas (via their NFT) and then measure which ideas generated revenue or enabled the cutting of costs.
Through associating the idea with the originator’s NFT, the ideas that led to successful outcomes would be financially rewarded or recognized through other means. This might encourage people to make thoughtful contributions to meetings rather than using them to waste time.
It may seem like an idea from an Orwellian-dystopia to contemplate conversations being listened-to and analysed. But in reality it’s already happening with Alexa, Siri and the many other autonomous agents that are listening into our conversations and utilising voice data.
This use of NFTs seems like a good way of redressing the balance and using the technology that’s already here, for our benefit.
NFTs for accessing education
When I entered the world of work, it was with the naive view that I’d completed my formal education and didn’t need to learn anything further.
Many follow a similar route through education — starting at the age of 5, accumulating knowledge and skills and gradually specialising as we approach adulthood. Then, armed with degrees, diplomas and certificates we launch ourselves on the world in search of a role that will pay for the skills we’ve gambled on being in demand.
There seems to be a trend away from conventional education — COVID-19 has highlighted that online learning is a viable alternative for learners studying a diverse range of subjects. Technology enables distributed learning and accreditation. It provides access to learning for larger volumes of people, delivered more efficiently. Moreover this model can flex and adjust more quickly, keeping pace with the rate at which new technologies evolve and skills-gaps emerge.
How about if instead of committing to a four year block of specialist study to earn a degree, we could purchase an NFT that gave us unlimited access to online courses offered by one or more of the world’s greatest educational institutions?
Such access could be managed via an NFT, for that institution, and when it were no longer needed the token could be sold to another who did. An NFT issued by Cambridge University, Stanford or Princeton could be issued to enable access to courses given by their professors for holders of the tokens, at a much cheaper price than that paid by conventional, in-person students.
Learners could access the education they needed to meet their learning goals and to facilitate their chosen career. When the NFT were no longer needed it could be sold on. A smart contract for the NFT would enforce that it were only ever bought by those who met the academic pre-requisites.
The quality of the teaching and the applicability of the knowledge delivered might also positively impact upon the price others were willing to pay for the token. This would incentivise universities and other education providers to improve the quality of their offering, since they’d ultimately benefit from the price of their NFT increasing.
The learner in turn would benefit from better teaching and the corresponding after-market for their education NFT to offset the cost of learning to some extent.
Key Takeaway
So much of the media coverage regarding NFTs focuses on the money being paid for high profile tokens that are often give the buyer little-more than a cartoon image. The same is true for media coverage given to cryptocurrencies like Bitcoin where the same tired tropes are repeated over and over again, focusing on its volatility and its energy usage.
It’s not surprising that thanks to lazy journalism, many of those who aren’t actively involved in crypto or NFTs view them with skepticism and cynicism.
Many of the ideas I’ve shared above are unproven at this stage, but they are legitimate and realistic potential use-cases for NFTs that could change how we live and work. The pace of innovation in the space is such that many of these use-cases could well become real in the near future. Certainly, we can expect more politicians to sell NFTs to raise funds, where the buyers are notionally funding a stake in that individual’s career.
The conventional ways of protecting intellectual property, paying employees or enabling access to education won’t necessarily be replaced by using NFTs wholesale, any more than the US Dollar will be entirely replaced by Bitcoin (at least not straight away).
If we dismiss NFTs as pure hype, a short-term investment bubble or simply a technological fad to be exploited by eccentric artists selling their work for inflated prices, there’s a risk that we’ll deny ourselves of some real benefit.
Time will tell how widely these uses emerge, but the potential is intriguing to say the least.
If you’re intrigued to know more about NFTs and the numerous ways they’re being used, you might be interested in my eBook on the subject.