Kayvon Tehranian How NFTs are building the internet of the future TED
NFTs are not a scam.
NFTs are not a fad.
In fact, NFTs are the building blocks
of the internet of the future.
But in order for us to see
this future clearly,
we first need to go back into the past.
The year is 1992.
The World Wide Web
is only three years old.
This is what it looks like.
For the first time in human history,
we share a global commons,
where, irrespective of where we are
in the physical world,
we can convene
and share information freely.
Most people at that time
couldn’t see what it meant
to be connected by
a network of computers.
In fact, many people thought
the internet itself was a scam or a fad.
But a few early internet pioneers
saw the potential
in this burgeoning technology.
One of those early internet pioneers,
John Perry Barlow,
saw both the opportunities and pitfalls
inherent in our new digital world.
And, of early cyberspace,
he posed a prescient riddle
all the way back in 1992,
that I’ll paraphrase for you:
“If our property can be
infinitely reproduced
and instantaneously distributed
across the planet without cost,
how are we going to protect it?
How are we going to get paid
for the work we do with our minds?
And if we can’t get paid,
what will assure the continued creation
and distribution of such work?”
A lot has changed
on the internet since 1992.
The internet itself is an alive
and evolving technology.
And as predicted
by its earliest champions,
the internet has increasingly become
our default context.
Today, one’s job, wealth,
relationships, sense of self,
are all often more mediated
through our digital contexts
than our physical ones.
Yet, Barlow’s riddle has remained
vexingly unsolved.
Concepts like property and ownership –
ideas that have been with us
for centuries in the physical world –
have evaded us in our digital spaces.
We’ve tried to foist copyright,
DMCA,
DRM and watermarks onto the internet
to protect our ideas
and to restrain their distribution.
None of these approaches have worked.
Why?
Because, as Stewart Brand, another early
internet pioneer, famously coined:
information wants to be free.
It wants to travel effortlessly,
without hindrance, without encumbrance.
This is what allowed the internet
to succeed in the first place.
Since 1992, we’ve uploaded trillions
of photos and videos and even cat memes
to the internet for free.
And what business model has allowed
this information to be free?
Advertising.
Advertising is the internet’s
default business model,
not because that’s what we want,
but because it’s what pays the bills.
Right now, the few large corporations
that run the most effective ad networks
control most of the value
on today’s internet,
not the people creating its content.
On today’s internet, we don’t get paid
for the work we do with our minds.
And what’s more, the content we upload
to these services is trapped there.
These services not only make money
from our content, they control it.
Until NFTs.
NFTs are a technological breakthrough.
They offer us the opportunity
to break away from that broken system.
So you’re asking yourself: What is an NFT?
It’s a certificate of ownership
registered on the blockchain
for everyone to see.
It’s not too dissimilar
to the deed you get
when you buy a house
in the physical world.
But instead of a house, an NFT denotes
ownership of a file on the internet.
And unlike copyright or watermarks,
which are ancient technologies
rooted in bygone eras,
NFTs are internet native.
They are born of the internet
for the internet.
And NFTs don’t simply port our existing
model of ownership
from the physical world,
they improve it.
In the physical world, ownership
actually fences people out.
It precludes others
from enjoying what you own.
I wouldn’t expect to feel welcome
in your home uninvited.
Digital space, however, is expansive.
It’s home to the infinite,
the exponential,
the instantaneous.
NFTs offer a system of ownership
that reflects this expansiveness.
With NFTs, my owning something
doesn’t preclude others from enjoying it.
In fact, it’s the opposite.
The more an NFT is seen,
appreciated and understood,
the more possibility it has
to increase in value.
Let’s take an example:
Nyan Cat, a wildly popular,
instantly recognizable cat meme.
Since it was uploaded
to the internet a decade ago,
it has accumulated hundreds
of millions of views.
And precisely because of that virality,
when it was auctioned as an NFT,
it sold for 300 ETH,
or the equivalent of over 600,000 dollars.
And the person who now owns this NFT,
they’re not preventing anyone from liking,
resharing or remixing Nyan Cat –
Nyan Cat is free to travel the internet
as it always has.
What’s different now is that,
as Nyan Cat’s popularity
continues to grow,
so can the value of the NFT.
Because of NFTs,
Chris Torres, Nyan Cat’s creator,
has received direct compensation
for his creation.
But what’s more is he’ll continue
to receive compensation
every single time the NFT is resold.
This is because of the royalty system
baked into the smart contracts
that govern NFTs.
NFTs are software; they can be programmed.
And with something
as complicated as royalties,
which require enormous amounts
of legal and manual labor to implement
in our analog world,
we can now express them
in a few simple lines of code.
This represents a breakthrough innovation
for any industry predicated on
royalty payments,
such as publishing or music.
And just as blogs and MP3s re-architected,
these industries in decades past,
NFTs will catalyze their next evolution.
The internet dissolved
our geographic boundaries.
NFTs dissolve economic boundaries.
Yatreda, an Ethiopian artist collective,
created these beautiful portraits
of heroes and heroines
from Ethiopia’s past.
They sold them as NFTs,
and in one weekend, they made 13 ETH,
or the equivalent of over 40,000 dollars.
And they were paid out instantly.
No customs, no foreign exchange,
no international wire transfers.
An artist collective based
out of Addis Ababa
has the same economic tools
at their disposal now
as an artist in LA, New York or London.
And while the NFTs
for Nyan Cat and Yatreda
were created and sold
on the same platform,
they’re not confined there –
remember: information wants to be free.
And unlike the current internet,
where information is made available
through proprietary apps and platforms,
NFTs are portable.
Instead of living on
a company’s private servers,
They live on decentralized infrastructure
that is peer to peer,
open and transparent.
But understanding this complex
decentralized infrastructure
is not a prerequisite to understand
what NFTs unlock for the human experience.
Once digital value and ownership
are no longer the sole domain
of a few corporations,
radical new possibilities emerge.
In other words, 30 years later, NFTs
finally solved John Perry Barlow’s riddle.
And this isn’t science fiction;
the technology already works.
NFTs are already being used
by the next generation
of internet pioneers.
And in the coming decade, NFTs will
reshape the internet as we know it,
with property rights baked into its code.
So what does the internet
of the future look like
with NFTs as its building blocks?
An internet where economic control rests
in the hands of creators, not platforms.
An internet where our ideas and creativity
can be directly supported.
An internet where information can be free,
but where we get paid
for the work we do with our minds.
Thank you.
(Applause)