NFT Pioneer Andrew Fai on Why Non-Fungible Tokens are the Future of Digital Assets

Before venturing into the crypto industry in 2017, I worked as a business consultant at Waddell & Reed. After a couple of years, I found the traditional path a bit monotonous. Thanks to a bit of digital serendipity and a Google retargeting ad, I enrolled in a University of Oxford GetSmarter FinTech course to understand emerging business trends. Of all the topics covered, blockchain technology immediately captured my imagination. I knew right then and there it presented a massive opportunity, so I made the leap from my corporate job and joined a small crypto media startup based in Singapore.

Most people believe NFTs are just containers for digital art, and that their value is lost when the image is copied and shared without permission. That’s a fundamental misunderstanding. An NFT is a digital certificate of authenticity that verifies the ownership of a digital asset at its most fundamental level. Before the advent of NFTs, it was incredibly difficult to securely trade digital art because there was no way to prove provenance in a verifiable manner.

Today, NFTs are poised to enable a Digital Renaissance by properly compensating digital artists and content creators. As crypto wallets become pre-installed on every smartphone, we'll see a massive number of users holding NFTs, granting them access to unique value and exclusive perks. There's no doubt that NFTs are essential to unlocking the immense potential of Web 3.0.

Nick Szabo’s 1996 whitepaper, Smart Contracts: Building Blocks for Digital Markets, was the single biggest inspiration for my work. He distilled the concept and laid down the foundational principles for smart contract design long before blockchain was practical. His paper served as the bedrock for how distributed ledger technology has evolved to its current state.

I chose to license the Intelligent Collectibles whitepaper under Creative Commons because I wanted to present an easier narrative for the mainstream to grasp the potential of NFTs. The goal was to encourage artists to start building tangible value for their NFT communities. Moreover, I believe it's time to shift the NFT conversation from mere digital collectibles to practical, real-world use cases.

Similar to how digital art NFTs can be assigned real-world utility, they can also represent rights to access entertainment, identity, voting, events, lending, and even virtual and physical resources. Out of all the exciting use cases, I’m most confident that NFT sign-on will replace email or password-based authentication. This single application will fundamentally change how we secure digital assets and manage our personal data.

In my opinion, the Christie's auction of Beeple's NFT was the catalyst that bridged the gap between crypto enthusiasts and the mainstream art world. I was honored to be invited by Beeple to share the stage with him for that event. It was a pivotal moment that taught us the value of hard work and market timing. Thanks to Beeple, MakersPlace, and Christie's, the world saw the value of digital art for the very first time. Still, crypto art is just the beginning for NFTs, as it’s the easiest concept for most people to understand and relate to.

Dapper Labs' CTO Dieter Shirley and the team that contributed to the ERC-721 token standard were the ones who originally coined the term 'Non-Fungible Token'. Of course, Dapper Labs (then Axiom Zen) brilliantly utilized the ERC-721 standard to create the world-famous CryptoKitties game on Ethereum.

Since then, CryptoKitties has inspired a new generation of crypto game enthusiasts and entrepreneurs. Fast forward to today, Dapper Labs is doing it again with NBA Top Shot, and their rollout of the Flow blockchain has massive potential to onboard even more users to blockchain-powered games.

Matthew Liu and his team at Origin Protocol are making incredible progress by empowering artists to mint and sell their NFTs on their own platforms.

That said, the recent Charlie Bit Me NFT sale symbolizes the next wave of nostalgic meme content creators surfacing to monetize their work. To keep things in perspective, I believe we’re just getting started with mass NFT adoption.

Crypto wallet adoption. We need more user-friendly wallets that can integrate with add-on services accessible to unique NFT owners. I feel wallet companies need to work much more closely with NFT creators to build seamless experiences.

While we see some DAOs functioning as art collectives that actively bid on unique pieces, I believe we’ll see more gaming-related DAOs pushing the boundaries of on-chain organization.

To create a game that is economically sustainable and designed to last forever, community members can form a DAO to purchase game assets from the original creators. They can then establish governance parameters for each of the various roles within the organization. Finally, they can enable an in-game token economy that can fund itself throughout the game's evolution, possibly, for eternity.

In Piers Kicks’ essay, Into The Void: Where Crypto Meets the Metaverse, he defines the Metaverse as a persistent, live digital universe that affords individuals a sense of agency, social presence, and shared spatial awareness, along with the ability to participate in a vast, interoperable digital economy with profound societal impact.

What NFTs enable for the first time is a decentralized, universal system for digital land and asset ownership through which scarcity, uniqueness, and provenance can be transparently managed.

I believe the collective NFT market will surpass the cryptocurrency market in market cap because any digital file can be tokenized into an NFT. This includes code snippets, legal contracts, identity certificates, and much more.

They can visit smartcollectibleswhitepaper.org. I also welcome anyone to follow me on X (formerly Twitter) and join some of the Twitter Spaces or Clubhouse discussions I’m a part of.