NFTs had the great year of 2021. From Pak’s ‘The Merge’ to Beeple’s ‘Everydays: the First 5000 Days’, many more creators and designers want to join the space to make a fortune. Can they do so?
I explained the 5 stages of the crypto life cycle and where NFT positions itself at.
Crypto Life Cycle Pattern
Similar to forming a country, cryptocurrency creates an opportunity to form a new type of organization or maybe even possibly a type of coalition or even a type of a country. How will a country form then? I started with a small group of people to trade with each other at first. Bunch people gather together to build a town. Each town can form a state and each state will form a country. Therefore, there are 5 phases of the crypto life cycle: Invention of Money, Invention of Creators, Invention of Entities, Invention of Coalition, and Invention of State.
Invention of Money
The first stage of the crypto cycle has almost been completed. With a valuation of cryptocurrencies to become more stable and their related financial products introduced, people can easily use crypto as a currency to trade and earn from.
Invention of Creators
The second stage of the crypto cycle is about recruiting people to work for crypto. The difference between working for crypto rather than working for crypto firms is that people voluntarily spend time contributing to crypto space and they do not necessarily seek monastery compensation. It is an opportunity to integrate side hustlers and gig workers into the workforce without forcing them to receive overpriced education with loan burdens while the job market has no place for everyone to take.
Invention of Entities
Crypto entities will form around the third stage of the crypto cycle. There will be many different styles of entities whether to include DAOs or not. Such entities will integrate crypto into their system and become part of their infrastructure or become their vital structure. Entities then evolve to become a specialization group that provides needs to expand the capability of the crypto space.
Invention of Coalition
In the fourth stage, entities will expand further. The large entity will become a coalition to lead small entities or spinoff their resources into different pieces of small entities while they are working toward the same goal. There will be competition but the coalition will not absorb entities like corporations, rather integrate and become part of the coalition naturally.
Check out my another article DAO The Way Part 3
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Invention of State
Each coalition will form a state eventually. Such a state has the resources to conquer complex issues like social issues or environmental issues. They will spend a long period of time working on the project together and form a state without influence politically. Or some states may have different political agendas that have nothing to do with power struggling but to influence the technology to use for public goods.
NFT is at the second stage of crypto. It is not so much about its valuation but how creators can invent NFTs and build a community that is more sustainable than just monetary rewards.
The next stage of NFT is to form entities. Whether through DAOs or partnerships with corporations, NFT hype will soon cool down.