NFT: A new type of social network

NFT: A new type of social network

Recently, such avatars are everywhere:

NFT: A new type of social network

If you don’t know what this is, this green guy is a CryptoPunk . CryptoPunks are 24 x 24 pixel art NFTs (non-homogeneous tokens), there are only 10,000 in total. CryptoPunk was created by the Larva Labs team as early as June 2017. It can be described as a veteran NFTs. With new NFT projects appearing every hour now, CryptoPunks is scarce and valuable in terms of the length of its existence.

Therefore, as the value of NFTs has soared in the past few weeks, CryptoPunks has led the trend. The most expensive CryptoPunk avatar sold for a high price of 4,200 ETH in March of this year , which is equivalent to USD 7.57 million at today’s price. If you want to buy yourself a CryptoPunk avatar now, the cheapest one is also 51.85 ETH . This is the current “reserve price” of CryptoPunks. At this price, you can buy a more common CryptoPunk, and you want to buy a rare CryptoPunk, just like the green guy who looks like an alien or a zombie in the picture above, you need to pay more ETH.

Some other things you need to know about CryptoPunks:

  • Owning a CryptoPunk is a status symbol , just like owning a Ferrari or an expensive handbag.
  • The holders of CryptoPunks use them as their avatars on social networks .
  • It is embarrassing to set a CryptoPunk that does not belong to you as your avatar.

But last weekend, hundreds of people replaced their avatars with the same CryptoPunk avatar that looked like a zombie (see picture below). This CryptoPunk was sold for 1201.725 ETH ($3.75 million) at the auction last Friday. out. No one would be upset that so many people set it as an avatar at the same time, because they share this CryptoPunk with a party hat.

NFT: A new type of social network

Source: Chuck Anderson

Why is it so? In the auction last Friday, 478 people joined together to bid for this CryptoPunk on PartyBid. PartyBid is a new platform created by the Anish Agnihotri and PartyDAO teams to allow people to form teams to bid for NFTs. Therefore, these people pooled their funds to bid for this multi-million-dollar CryptoPunk to fight against the wealthy whales . They call themselves ” Party of the Living Dead .” In the end, they won in the auction! (Editor’s note: According to the instructions of the PartyBid platform, if the auction wins, then all funders will obtain partial ownership of the NFT obtained from the auction.)

PartyBid makes NFTs more social , giving hundreds of people the opportunity to buy, hold and manage expensive NFTs together in a party-like way . The social attributes of the platform can be clearly seen from its website. The mouse cursor and comments will fly around the website in real time (as shown in the picture above). As the auction continued last Friday, hundreds of people gathered on it in the form of mouse cursors and emoticons. This is difficult to describe in words; as you can see from the screenshot above, you can also go to the website to see for yourself.

Like zombies, NFTs should have no life. What is going on then?

I have a theory.

Last Thursday night, I participated in the ” Good Time Show ” by Sriram Krishnan and Aarthi Ramamurthy on the Clubhouse platform. I joined Gabby Dizon (YieldGuild), 3LAU, Donnie Dinch (Bitski), Jarrodd Dicker (The Chernin Group), Jon Lai ( a16z) Discuss ” Metaverse ” with Jesse Walden (Variant ) .

Readers should be familiar with the “meta universe”. In the past few weeks, “meta universe” has become mainstream. Matthew Ball (venture investor) has published 9 articles on this [1]; Satya Nadella (Microsoft CEO) also talked about the corporate meta-universe; in the past few weeks, Mark Zuckerberg (Facebook CEO) and his colleagues We have talked about “meta universe” countless times; Ben Thompson (famous analyst) also wrote an article about “meta universe” [2].

NFTs will obviously play an important role in the “meta universe.” When everything is digitized, it will be key to prove that you own something and can carry it with you on the Internet. But this article is not about the meta-universe. This is an article about social networks.

In the dialogue of “Good Time Show”, Jarrod Dicker mentioned the importance of community and status in Web3 , which led me to an idea: NFTs conform to Eugene Wei’s ” Status-as-a-Service ” (Social Status is Services) [3] Many standards that a successful social network needs to meet as described in the book.

Before the arrival of the complete meta-universe, something bigger than the NFT picture has happened. NFTs more and more like a new type of social network , superior to other social networks and communities, a bit like a ” super universe ” (Superverse). In terms of evaluating social networks, there is nothing better than the framework proposed in Eugene Wei’s ” Status-as-a-Service” article.

Social status as a service

Eugene Wei was the former product owner of Amazon, Hulu, Flipboard and Oculus, and one of the best tech critics on the Internet. Almost everything he wrote has become a classic, and his ” Status-as-a-Service  [3] written in February 2019 may be his best work.

The length of that article makes this article feel ashamed. The article has a total of 19,825 words. If you have not read this article, I strongly recommend you to read it, but for now, I will summarize some key points related to the article.

Eugene Wei started his discussion with two principles:

  • Human beings are a group of monkeys pursuing social status;
  • Humans will look for the most efficient way to get the most social capital (social capital).

Although these two points are uncontroversial claims, Eugene Wei believes that we have not analyzed social networks in terms of social status or social capital . Unlike money, which can be measured and analyzed by numbers, Eugene Wei said:

In many ways, social capital is the main indicator of financial capital , so the nature of social capital needs more scrutiny. Not only is it a good investment or business practice, but by analyzing social capital dynamics, it can help explain all seemingly irrational online behaviors .

Eugene Wei used less than 1,000 words and unintentionally laid the foundation for analyzing what is happening in the current NFT field two years before the NFT frenzy broke out. NFTs blur the line between social capital and financial capital. As the media quickly pointed out, it is irrational to spend thousands or millions of dollars to buy these NFT “pictures” .

Those who deny NFTs make the same mistake as Eugene Wei believes that people make when analyzing social networks: ignoring the importance of social capital . Traditionally, people use Metcalfe’s Law to explain the network effects that promote social networks : “The value of a network is proportional to the square of the number of users connected to the system .” In other words, according to Metcalfe The law, the more users a social network has, the greater the value of the social network to each new user .

But the problem is that Metcalfe’s law does not explain what happens in the real world very well . According to Metcalfe’s law, it can be predicted that no matter which network develops first, it will become the most valuable network for each new user, thus continuously establishing an insurmountable lead . But Facebook beat MySpace, and Instagram and Snapchat took away the attention of young users from Facebook. It can be seen that people’s preferences cannot be clearly captured .

This is not to say that network effects and Metcalfe’s law are wrong, but that they fail to capture the reasons why people use social networks, not just for mere utility . Therefore, Eugene Wei proposed a new framework for the social capital (social capital) is added in, in order to analyze the advantages and disadvantages of different social networks.

NFT: A new type of social network

Source: Eugene Wei

Eugene Wei evaluates social networks from three dimensions: social capital , entertainment and utility . In his article, Eugene Wei mainly focuses on social capital and utility .

Utility is relatively easy to understand. If you can find the answers to your questions on the Quora (similar to Zhihu) platform, or you can easily contact your high school friends who have lost their phone numbers on Facebook, then these products are providing you with utility value.

On the other hand, social capital is more difficult to define, it depends on whether it can create a ” successful social status game .” To explain why some new social networks succeed and others fail , Eugene Wei uses an analogy: cryptocurrency .

Eugene Wei stated that the new social network is similar to 1CO (Initial Coin Offering) in four aspects :

  1. Every new social network will generate a new form of social capital, just like issuing a new Token;
  2. You must show proof of your workload in order to earn the Token;
  3. As time goes by, it becomes more and more difficult to mine new Tokens on each new social networking site, thereby creating a built-in scarcity for the Token ;
  4. Many people, especially the elderly, scoff at social networks and cryptocurrencies.

This is a good analogy. For a better understanding, let’s take a comparison between Bitcoin and Twitter as an example:

  1. Bitcoin issue BTC ; Twitter “release” followers (followers, ie, fans).
  2. Because Bitcoin miners to protect the network and obtain BTC reward; Twitter users can not exceed 140/280 witty characters by posting interesting or exciting tweets will be able to get followers .
  3. The cost of mining BTC is now higher than before, and the difficulty of mining BTC will continue to increase until all 21 million BTC are mined; in the early days of Twitter, you can get it by tweeting what you eat for lunch Followers, and nowadays, people have turned to a series of tweets (threads) to attract followers.
  4. The fourth point is self-evident.

15 years ago, Bitcoin and Twitter did not exist. Both are the dominant forces today. They reward early adopters, incentivize them to “work” for the network, and make it more and more challenging to mine new tokens or gain new followers, and become popular from no one .

It is important to understand these four points, but the most important is the “this” social status of the game “in the effort to prove ” (proof of work). If everyone who signs up on Twitter can have 1 million followers just by signing up, then having 1 million followers will not bring any social capital. It is precisely because the number of millions of fans is difficult to obtain that the number of fans becomes valuable, and the amount of work required to obtain fans proves to create a kind of scarcity .

Leaving aside entertainment, Eugene Wei talked about the five curves that social networks may follow, four of which are the trade-offs between social capital and utility over time:

NFT: A new type of social network

Image source: Eugene Wei

  • The first curve: first ” utility ” , then ” social capital “. That is, users of social networks “come for the tools and stay for the network.” For example, Instagram was initially used as a simple photo editing tool to attract users, and later became a photo-based social network on which people built a large number of followers and businesses.
  • The second curve: first ” social capital ” , then ” utility “. Eugene Wei said that Foursquare, Wikipedia, Quora, and Reddit all first promised to bring people social capital to let people do free work, and then became practical tools for the public.
  • The third curve: only ” utility ” , no ” social capital “. For example, instant messaging apps are very useful for communicating with people you know, but they cannot really help users build social capital .
  • The fourth curve: There is “social capital”, but there is very little “utility” . Eugene Wei puts Facebook in this category, and he mentioned that many of his friends stopped using Facebook and did not affect their lives (this is also true for me, and I guess it is true for many of you).
  • Finally, the fifth “Holy Grail” curve, that is, social networks bring social capital and utility to users at the same time . Eugene Wei takes the Chinese application WeChat (WeChat) as an example. WeChat combines Facebook-like Moments dynamics (social capital) with a large number of practical functions (utility). I wrote about this:

People use WeChat to send messages to friends, shop, read news, play games, pay in physical stores…Almost everything you can do on your mobile phone, you can do it on WeChat.

Micro-letters from the outset to create a capitalist society and usefulness of the killer combination , which has not yet been replicated in the West.

Nevertheless, Eugene Wei pointed out that even social networks followed the proper curve, will also be two ” asymptote ” limit or restrict the growth of the network, or lead to complete failure.

  • Social Asymptote #1: Proof of Work .

Not everyone can obtain social capital on any particular social network, which creates a growth ceiling for that social network . For example, I am fascinated by TikTok (overseas version of Douyin), but I have never made my own TikTok video because I am not good at dancing, and I just don’t want to put in the work to make what TikTok algorithm wants. TikTok is still growing at an alarming rate, but if even someone who loves social networks like me does not use it, there will be a ceiling for its growth.

  • Social Asymptote #2: The expansion and contraction of social capital .

In terms of the expansion of social capital, when a social network becomes too successful and too many people are using it, the company behind it inevitably needs to introduce algorithms to deal with all the noise. Eugene Wei believes that it is always possible for Facebook to introduce algorithms, because in a rich digital world, the only scarce resource is the user’s attention , so it is necessary to provide users with the content they are most likely to participate in. This makes sense, but it is a difficult time for any company that relies on the Facebook platform to connect with users.

From the perspective of the shrinking of social capital, as more and more people join, social networks may become less cool. A typical example is when parents started to join Facebook, all young people left Facebook and switched to Instagram and Snapchat. Once the fashionable young people start to leave, the less fashionable young people will leave, and then more and more people leave , and because more and more fashionable parents continue to join in, the fashionable young users The ratio of deceased is rapidly decreasing (shrinking).

Eugene Wei warned, “In this case, the product or service is best to be as effective as possible, otherwise the rapid loss of users will cause major trauma.”

In the final analysis, the following is the core of Eugene Wei’s argument:

  • Analyzing social networks requires more than just their network effects.
  • There are three more indicators that need to be analyzed: social capital , utility, and entertainment .
  • The new social network is like 1CO (Initial Coin Offering), especially because a successful social network will use an appropriate proof- of- work difficulty to create scarcity and social status .
  • There are many development paths that social networks follow, but the best path is to provide high social capital and utility at the same time from the beginning .
  • Even successful social networks face two asymptotes: the proof-of-work ceiling and the expansion/shrinking of social capital .
  • To provide a network with high social capital from the beginning, it is necessary to figure out how to build its own utility before facing these two asymptotes in order to survive and thrive.

In the rest of his article, Eugene Wei cited many examples to add rich content to the article. You should read this article, but for the purpose of this article, there are a few particularly valuable things I want to highlight:

  • Social capital can be used as temporary energy . “You can think of social capital accumulation incentives as a way to transform the potential energy of social status into any form of kinetic energy your business needs.”
  • The new workload proves that this “status game” can be extended . “Las Vegas casino games are played for real money and attract players with an attractive ROI. Some MMORPGs (massively multiplayer online role-playing games) provide players with other benefits (such as a sense of community) , Which allows them to last longer than purely competitive games.”
  • Social capital is transformed into financial capital and vice versa . “This allows us to assign tangible value to social capital, just as people understand the value of intangible assets, such as the upgraded “World of Warcraft” characters sold on the open market…”
  • The social graph of traditional social networks (that is, the social relationship on a certain social network) lacks transferability, which makes users feel frustrated . This point particularly highlights the main difference between traditional social networks and NFTs, so I will quote a passage from the original text here:

From the perspective of existing social networks, the limitations of migrating social graphs are a good thing, but from the user’s perspective, this is frustrating. Taking into account the anti -monopoly context of the social network under perform difficult struggle degree to curb a corporate power large network effect species choice is to require companies to allow users to connect their migration social graph to other networks (as many have suggested that) . This will weaken the advantages of social networks in terms of social capital, forcing them to compete more in terms of utility and entertainment.

What if we can benefit from social networks in a more portable and decentralized way ? Now it is time to return to the topic of NFTs.

A brief history of NFTs

Let’s quickly introduce NFT. NFT is called “Non-Fungible Token” (non-fungible token). The power of NFTs is that they make digital assets scarce . Scarcity makes digital assets valuable, just like exotic cars, artworks or rare stamps. If there is no way to prove that the holder of a certain NFT actually purchased the official version of the NFT , then the artist Beeple’s digital art collection ” Everydays ” will not sell for a high price of $69.3 million.

NFT: A new type of social network

Above: Beeple’s “Everydays: The First 5000 Days” digital art collection, which contains 5000 digital art works. The portfolio is sold in the form of NFT.

NFTs started with the CryptoKitties launched in 2017, but they really became popular in early 2021, when BTC and ETH hit record highs, Beeple’s NFT portfolio and NBA Top Shots (representing the wonderful short stories of NBA players) Video NFTs) take the lead. The emerging crypto tycoons did what the rich would do: buy art . Although NFTs were subsequently suspected and ignored as toys.

NFT: A new type of social network

Source: The New York Times

Then in April of this year, the price of cryptocurrency fell, and NFT also cooled down. Those who questioned NFT said: “Look, when people start to spend millions of dollars on NFT pictures, I know it’s a bubble!”

In June of this year, the encrypted website Protos and many blogs published articles similar to the screenshot below, citing data on the 90% decline in NFT transaction volume.

NFT: A new type of social network

Screenshot source: Protos

The article reported on the Protos website on June 2 in the picture above reads: “NFTs reached their peak on May 3, and the transaction volume reached 102 million US dollars in just one day. However, according to data analyzed by Protos, in the past week The transaction volume of NFT is only $19.4 million.”

Then, in the past month or so, interesting things happened. NFTs are making a comeback . In the past 24 hours at the time of writing this article, the turnover of NFTs that changed hands on the two NFT markets alone, OpenSea and Axy Infinity, reached 106 million U.S. dollars.

According to DappRadar data, in the past 30 days, the trading volume of the top ten NFT markets reached US$1.86 billion .

NFT: A new type of social network

Source: DappRadar

At this moment, it feels as if NFTs are pushing the prices of ETH and BTC, not the other way around, because the prices of these coins are still rising, despite the growing interest of the SEC in regulation under the new chairman Gary Gensler, and the new US proposal The infrastructure bill may cause damage to cryptocurrencies.

So why are NFTs making a comeback? And why do they exist for a long, long time? Let us return to our friend Eugene Wei.

Investment is social status

The best starting point for finding the reason is the two principles proposed by Eugene Wei:

  • Human beings are a group of monkeys pursuing social status;
  • Humans will look for the most efficient way to get the most social capital (social capital).

Those of us who are pursuing social status are using digital monkeys as the most effective way to maximize social capital. During the NFT summer boom this year, the NFT collection project Bored Ape Yacht Club (boring monkey yacht club) took the lead.

NFT: A new type of social network

Above : Several images of Bored Apes in Bored Ape Yacht Club .

In the past month, the third-largest NFT collection by transaction volume is Bored Ape Yacht Club (BAYC), as shown in the figure below. Like CryptoPunks (cryptopunk avatars), there are only 10,000 Bored Apes in total.

NFT: A new type of social network

Source: DappRadar

The Bored Ape Yacht Club website describes itself as “a limited NFT collection. This token represents your membership in the Ape Yacht Club .”

NFT: A new type of social network

Above: Bored Ape Yacht Club website

Unlike CryptoPunks, BAYC (Boring Apes Yacht Club) is a brand new launch: it was released on April 30 this year. But it has become the third most popular NFT collection, probably because it combines social capital and utility . “The New Yorker” (The New Yorker) Kyle Chayka recently wrote an article: ” Why Bored Ape Avatars Are Dominating Twitter  , the article said: ” It (Bored Ape) has become a kind of status symbol, a bit like wearing high-end Watches or wear rare sneakers .”

These apes images are an NFT theme, and this is also true outside of BAYC. For example, two of the four most expensive CryptoPunk avatars in history are also apes, as shown in the following figure:

NFT: A new type of social network

Above: The avatars of CryptoPunk NFTs with the highest selling price so far. Image source: Larva Labs

If people spend millions of dollars to buy these pictures of apes and monkeys that seem irrational, then ” analyzing social capital dynamics can help explain all seemingly irrational online behaviors. “

Therefore, instead of ignoring these obvious facts, let us dig deeper and analyze it, and put NFTs into Eugene Wei’s theory . We will also talk about the entertaining nature of NFTs.

NFT: A new type of social network

This is the power of valuable NFTs: they are both high in social capital and utility , and they are getting higher and higher in terms of entertainment . They played three consecutive victories on social networks .

  • Social capital : NFTs is that this “investment that is social status” (Investment-as-a-Status ) game of social capital . There are only 10,000 CryptoPunks and Bored Apes in total. Among these limited collections, some of them are particularly valuable and therefore bring high status . Owning a CryptoPunk or Bored Ape, and often displaying it as your Twitter, Discord or Telegram avatar, shows some of your information: They mean you either participated early, or you are rich, or either You participated early and you are rich now . The use of high-priced items to increase social capital is not new: look at art, expensive cars, yachts, private jets, handbags, or any rare items purchased by very wealthy people to show their identity. It’s just that NFTs are easier to identify and more public.
  • Utility : NFTs are also useful as investments, such as “tickets” to join a Discord chat group, and even digitally hang on your wall. Over time, as NFTs develop and penetrate a wider audience, the owners of NFTs will gain the qualifications to participate in events and other unique experiences .

For example, the purchase of Bored Ape has allowed its owners to enter the Bored Ape Yacht Club; Axies (NFT digital pets) in the Axie Infinity game also provide real utility: the ownership of Axies means employment for thousands of people Opportunity; Larva Labs, the creation team behind CryptoPunk, launched the third NFT project Meebits (see the picture below) . Each Meebits image has a 3D model and animation, which can be used as a role in the game.

NFT: A new type of social network

Above: Meebits, from Larva Labs

  • Entertaining : Although Eugene Wei did not discuss entertaining in depth, most successful social networks also score highly in terms of entertaining. It can be said that TikTok is both a social network and an entertainment network, similar to YouTube. People lurking on Twitter for hours a day looking for entertainment without interacting, purely for passive entertainment. NFTs are also very entertaining: it is interesting to check the sales price of NFTs, and some people have begun to use Bored Apes or CryptoPunks as the protagonists to create online characters; joining together to bid for NFTs on PartyBid is both an investment and a social Activity.

The entertainment of NFT is beginning to take off. The Punks Comic team is creating comic characters based on 16 CryptoPunks avatars (see the picture below) , and will create more such comic characters in the future: they will soon be expanded to Bored Apes.

NFT: A new type of social network

Source: Punks Comic

This is just the beginning. Many NFT supporters believe that any major cultural event can be recorded in the form of NFT.

Therefore, NFTs provide social capital , utility, and entertainment … So is it appropriate to put NFTs in Eugene Wei’s “new social networks are like 1COs” analogy? Given that 1COs and NFTs are both cryptocurrency projects, this is simply too simple:

  1. Every new social network will provide a new form of social capital, just like issuing a new Token;
  2. You must show proof of your workload in order to earn the Token;
  3. As time goes by, it becomes more and more difficult to mine new Tokens on each new social networking site, thereby creating a built-in scarcity for the Token;
  4. Many people, especially the elderly, scoff at social networks and cryptocurrencies.

There are some subtle differences here.

NFTs more directly to the social capital and financial capital linked . One way to obtain a valuable NFT is to participate as early as possible , to obtain it when it is minted, or to start early when the wider community is not interested in it. Another way is to buy one directly . The former requires more proof of work, including figuring out which projects should be involved as soon as possible; while the latter is closer to proof of equity, that is, invest your ETH to buy support and participate in the NFT project.

But there are also direct similarities between NFTs and 1COs : Many people, especially the elderly, sneer at them.

Even I have to admit: NFTs feel a little far away to become a social network .

NFTs don’t look like social networks now; if anything, they look like small communities . NFTs have brought social status signals and online social capital globally . But if Facebook, Snapchat, TikTok and Twitter are all social networks, then NFTs will feel different.

In my opinion, NFTs are new forms of social networks . This is also the correct strategy adopted by NFTs.

In Eugene Wei’s “Social Status as a Service” article, there is a chapter titled “Why Duplicating Workloads Prove to be a Bad Strategy for Social Status-Driven Networks”. The basic content is that using the same core proof-of-work mechanism as the existing social network and adding some new features is not feasible , because using these two social networks requires the same skills, and people will be attracted to more social networks In the network.

For example, Bitclout, which is similar to Twitter, except that Bitclout is related to cryptocurrency, but Bitclout still rewards people for posting witty, interesting or intelligent things in the same way as Twitter. The difference is that if you succeed on Bitclout, your tokens will become more valuable and you will also make money. This possibility of directly converting social capital into financial capital is enough to allow people to repeat work on a new platform or migrate work to a new platform, but it is challenging .

Instead, you need to reward a completely new behavior. The difference with NFTs is that NFTs do not require people to leave their favorite existing social networks . In fact, if everyone is showing off and talking about their NFTs on their favorite existing social network, it will be good for the NFT collection and all its holders.

This craze can directly create more demand or indirectly create opportunities. For example, if Netflix executives see everyone talking about CryptoPunks on Twitter, they might turn it into a show that rewards CryptoPunks owners; for example, people at Christie’s auction house see everyone on Discord talking about Art Blocks (a platform for generating artwork NFT) , they may auction one of the above graffiti artworks, bringing credibility and influence to the entire collection.

NFT: A new type of social network

Above: A pair of NFT graffiti artwork on the ArtBlocks platform, created by Snowfro.

When this happens, every NFT owner will build a huge social capital and may invest this capital into the network. If CryptoPunks becomes a Netflix show, the punk image that plays the leading role in it may become a celebrity by virtue of its own strength, and build exogenous social capital, and use it on a series of social networks.

NFTs are not social networks in the traditional sense . Without a registered company, there is no offline place where holders can be gathered. Maybe they can only converge in NFT markets such as OpenSea or blockchain games and virtual worlds such as CryptoVoxels, Decentraland or The Sandbox. Maybe someone has established an anonymous social network and can only enter with NFT. But most likely, none of the above is, but a new thing: the Superverse .

I mean, NFTs may be a “super” social network on top of other networks .

As Eugene Wei wrote: “From the perspective of existing social networks, restricting the migration of social graphs is a good thing, but from the perspective of users, it’s frustrating.” He said that if regulators force social networking The network makes the social graph transferable, which will “weaken the power of social networks in terms of social capital and force them to compete more in terms of utility and entertainment.”

What if it is not regulation, but a new entrant (such as NFTs) with natural mobility? You can establish a position on a certain platform, own it without platform risk, and carry it with you on the Internet, no matter which platform rises or falls. NFTs are exactly that . Any social network with a profile picture (that is, all social networks) is fertile ground for the spread of NFTs. NFT holders have displayed their CryptoPunks, or their RTFKT sneakers, etc. on their Twitter avatars or Instagram photos.

This is not only the case of individuals, groups that share specific NFTs (such as the “Party of the Living Dead” on PartyBid mentioned above or DAOs that jointly hold NFTs) can also migrate to any new platform together, using Discord as Base, from there launch missions to all new territories.

NFT: A new type of social network

Eugene Wei mentioned Chris Dixon’s view of “coming for tools and staying for the network”. The same is true for NFTs. Supporters of NFTs come for this tool and bring the Internet to the most socially and economically valuable place.

In spite of these supporting arguments for NFTs, it is necessary to point out an obvious warning: the price of specific NFTs or the total demand for NFTs may fall, or may even fall sharply . Recently, there has been a surge in demand for Ether Rocks, a veteran NFT collection born in 2017, and the base price of these “stones” now exceeds $200,000. Even the founder of the project called it the “pet stone in the blockchain”. The resurgence of the project is a test for the community, that is, to what extent the community can push their power to make anything valuable.

NFT: A new type of social network

Image source: EtherRocks

Having said that, NFTs do seem to have some characteristics that enable them to resist the two asymptotes Eugene Wei said : proof of work & the expansion and contraction of social capital .

In terms of resisting asymptotic line #1 proof of work , NFTs can add unlimited new proofs of work , thereby prolonging the life of this “social status game” as described by Eugene Wei. He cited two examples of successfully prolonging the life of this game: Las Vegas casino games and MMORPGs (massively multiplayer online role-playing games), which have the same characteristics as NFTs:

Just like casino games in Las Vegas, NFTs can “use real money to set an attractive game ROI.” Like MMORPGs, NFTs have a longer sense of community belonging than pure competitive games.

But NFTs will also face challenges in the adoption (popularity) of cryptocurrencies and whether people can afford them , and NBA Top Shots and Fractional are a step in the right direction. There is no doubt that more innovation will make NFTs more acceptable to a wider group of people , while retaining the benefits of scarcity, or replacing scarcity with other benefits, such as communities.

In terms of resisting the expansion and shrinkage of social capital of social asymptote #2 , NFTs have the advantage of decentralization . Although some platforms may use algorithms to present NFTs, the NFT itself is portable and can be used and displayed on any platform chosen by its owner . They are also unlikely to be affected by “evaporative cooling”, because NFTs are not a whole, but small communities, each with its own standards.

For example, although there are only 10,000 CryptoPunks in total, there may be thousands of DAOs organizations or partial ownership teams in the end. Each organization or team forms its own small community with its own standards and rules. This fragmented structure should make NFTs more resilient. In addition, thanks to the input cost of NFTs and NFTs holders can choose when to sell their NFTs, it will take a lot of time and money for parents to take over CryptoPunks like Facebook.

NFTs are still in their early stages . Even people who like NFTs like me do not own a CryptoPunk, Bored Ape, or any other major NFT collection. Need to build more infrastructure and build more structures to connect different NFT projects. But it seems that NFTs have the right elements to build a new form of social network-“Superverse” (super universe) on top of existing networks such as Twitter, Instagram, Snapchat, Discord, and TikTok, and they can continue over time. Adaptation and development.

New NFT projects can be launched using the powerful combination of social capital and financial capital . NFT’s inherent ownership brings social capital, utility, and entertainment. Proof of work can continue to evolve, from finding the next big event, to creating brand extension projects (such as Punks Comics), to marketing specific NFTs to increase the visibility of the entire collection. CryptoPunks holders have purchased billboards in New York, Miami and London to spread their influence. When you combine money, social status, and community, you have a powerful force .

As always, I was the first to admit that all this sounds crazy. NFTs feel more like a fashion than a new type of social network. Fortunately, Eugene Wei provides us with a framework for evaluating the strength of social networks, and NFTs do a very good job in this regard. In the article “Social Status as a Service”, there is almost no refutation of the view of NFTs as social networks; in fact, almost every part of the article supports this view to a certain extent.

The next big thing will look like a toy at first. The next large social network may not look like a social network at all at first. The future will be crazier than we can predict. A social network based on NFT image ownership obviously fits this category.

So what is the conclusion? How do you deal with this information?

At least, don’t be the old people who laugh at NFTs.

This article only represents the views of the original author and does not constitute any investment opinions or suggestions. Links involved in the article:

[1]https://www.matthewball.vc/the-metaverse-primer

[2]https://stratechery.com/2021/metaverses/

[3]https://www.eugenewei.com/blog/2019/2/19/status-as-a-services

Written by: Packy McCormick

Editor: South Wind

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/nft-a-new-type-of-social-network/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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