Interplay of Social Media Platforms and NFTs

Interplay of Social Media Platforms and NFTs 

By Isaac Teoh Shi Yang 

What is NFTs 

Blockchain technology and distributed ledgers are attracting massive attention and trigger multiple projects in different industries, in which the core disruptive technology of blockchain has transformed the financial ecosystem particularly as reflected by the financial industry being the primary user of the blockchain concept. One such emerging Blockchain product that has captured large public attention is Non-Fungible Tokens denoted by NFTs. NFTs are related to the traditional cryptocurrencies such as Bitcoin in the sense that they are tokenized representations of an item of value, but differ in terms of their intrinsic features. Unlike Bitcoin in which all the coins are equivalent and indistinguishable, NFTs is unique which cannot be exchanged like-for-like where it uses blockchain to store anything that can be converted into digital files such as images, musics and videos, but a lot of the current excitement is around using the tech to sell digital art where a creator can easily prove the existence and ownership of digital assets by using NFTs on smart contracts in Ethereum, one of the most popular smart contract-based blockchain, and earn royalties for every successful trade on any NFT market or by peer-to-peer exchanging. With the full-history tradability, deep liquidity, and convenient interoperability, NFT is becoming a promising intellectual property-protection solution. Nevertheless, the value of an NFT is based on the perception of buyers which arises from the recognition of the creator and overall marketing around the NFT itself where the codes to a buyer have ascribed value when considering its comparative scarcity as a digital object. 

Benefits of NFTs from social media platforms and vice versa 

As of February 2022, NFTs are not currently not created, bought or sold on social media platforms, whereby several online platforms and marketplaces were developed to support the selling of NFTs, including SuperRare, MakersPlace, and WazirX in the United States.  

Social media platforms generally make it easy for audiences to receive and pay for the content, to follow a creative practitioner’s work and to express their preferences in relation to the inherently social nature of the artworks aligns with the social media network’s DNA. From another point of view, there is no better or faster way to reach out to the community and inform them about an offering for NFTs and the subsequent setting up of an auction, or to announce the sale of it, which is especially true considering that social media platforms can act as the common ground between a buyer, seller, or mediator, serving the purpose to connect a consumer to a brand, such that several artists even have a substantial or at least considerable following on social media, given the fact that digital art has grown and flourished on social media. 

With that being said, NFTs also serves as an alternative revenue source where crypto-compatible social media companies have a chance to retain and acquire new NFT-orientated customers, somewhat like a chain reaction as the evolution of the web, referring to that of Web.3’s development and design, is constantly being influenced by the dominance of social media companies. 

Practical implementation and/or intention of social media embracing NFTs: 

  1. ‘Twitter Blue’ account users with a subscription of 3 USD per month now have access to the display NFT option where they can connect a cryptocurrency wallet to their account and import their NFTs to use as a profile picture with a special icon mark  confirming the authenticity of the token. Twitter also allows its users to track NFTs and show tokens owned by others. Overall being the first among all other social media giants to jump on the bandwagon of NFTs. 
  2. As for Facebook/Meta, the company intends to open an easy digital-asset NFT marketplace where buying and selling is less complicated since collectors now are still being required to go through multiple platforms, not to mention the increased risks of exposure to fraud and transaction failure by doing so, thus in short Meta hopes to capitalise on the growing value of NFTs as according to an interview where the company is exploring the possibility of creating products and services related to NFTs. 
  3. YouTube and Tik Tok instead operates similarly in terms of handling NFTs, whereby YouTube is currently distributing personalised NFTs to the creators on the platform and that creators will be able to monetize the video content created for sale as NFTs while Tik Tok will be releasing a collection of NFTs which comprises of six videos from the most popular Tik Tokers in the world that are considered culturally significant scheduled to be displayed at the Museum of Moving Image in New York from 1st of October to 5th of November and that the tokens will be released on the day after that on 6th of November. 

Expected market growth and brief economic interpretation of NFTs 

As according to Emergen Research, USD 340 million of the global NFT market size was reached in 2020 and is expected to cross USD 3,50,000 million in 2030 as evidenced by the breakthrough of NFT market nearly surpassing the global traditional art market where it started with a market cap of about USD 1 billion at the start of 2020 and boosted up to just over USD 41 billion by the end of 2021, in which one of the NFTs known as “Everydays: The First 5,000 Days” by Beeple was sold for USD 69.3 million at Christie’s in March 2021.

However, the NFT market have its own downside risks, potentially limiting its scope for future growth too, whereby roughly 9% of individuals hold around 80% of the total value of NFTs, thus making the market susceptible to swings in macroeconomic conditions in relation to the outsized market impact brought about by the portfolio adjustments by just a few large investors and that unproven and new asset classes have typically performed poorly in the past at times when large economic shocks take place such as economic downturns or in cases of rapid changes to interest rates. 

NFTs in Malaysia 

Although most of the NFTs are based in the global North, Malaysia is definitely not lagging behind and some of the local artists has already produced a few digital artworks including some of the well-known Malaysians such as Namewee who is a Malaysian born singer songwriter based in Taiwan as well as the local contemporary artist Red Hong Yi, whereby one of her NFT creation known as “Doge to the Moon” was sold for RM 325,000 in an online auction while Namewee instead sold his photos and songs in the form of NFTs for about RM 3.5 million. 

Other honourable mentions of local NFTs: 

  1. The Malaysian graffiti artist Katun had sold two of his NFT collections at approximately in just 24 hours for about RM 1.6 million, whereby his debut appearance in the NFT world include the creations of “Apes Stand Strong” and “Mystical Fruits”, being the first Malaysian to launch an NFT on the cryptocurrency platform known as Superfam. 
  2. Ronald Ong, a final-year medical student has also minted some of his artworks onto various platforms, with a typical characterization of hybrid of animate or inanimate objects in his creations such as “Zebreo” being the combination of zebra and Oreo cookies, altogether with “Shird” and “Loafox” reported to have sold for about RM 21,771 at maximum that particular time for sale. 

Share this content: