Aug 27, 2022

NFTs — Transforming ‘Access’

With NFTs, access to economic and social Value — can be more efficiently acquired, easily traded, actually owned as an asset, and benefit from global distribution and activity.

If we look beyond the hype of ultra-expensive JPEGs and odd-looking monkeys and apes — we’ll find that the very notion of ‘Access’ is being transformed. This yields tremendous benefits. With one rather concerning downside. But let’s start with the benefits…

1. Acquisition (of Access) is Simple & Efficient

I like the programmable, rules-based nature of Access-acquisition (to gain entry to Organizations, DAOs, and Online Communities).

We can easily acquire Access to a network, to a community — for tangible, economic, or social benefits. And we can do this without the friction of traditional membership-based governance models.

Take for instance — the registration, validation, and onboarding process of a typical club / society / organization; and compare that with the process of purchasing an NFT that gives instant access to a DAO / online community.

2. Access-Assets Capture & Hold Value of Past Behavior

When an NFT provides access to a DAO / Community / Network, I consider it an ‘Access-Asset’.

And when we buy an NFT to gain access to an Organization / Community, we gain instant access — not just to the present and future value of the network, but we also get access to historical value of the Token.

This allows and incentivizes NFT-holders to create value, and engage in value-creating behavior. This aligns the behavior of Token-holders / Members with the Organizations / Networks — and it creates long-term sustained benefit of the organization. It therefore increases (rather than diminishes) the value of Membership / Ownership of Access over time.

3. Ownership. Not just Membership. And Separation from Identity.

I like how NFTs grant Access that is transferrable — like an asset.

The Access that comes from acquiring an NFT is not bound to my identity as an individual. This enables me to transfer Access easily — and independently of the organization / network that offers the Access.

This retains the value that I would have paid for the Access. Contrast this to traditional organizations in which departing members either have no value attached to their memberships, or have to pay an additional fee imposed by the organizations (for membership-transfer).

4. Global, Open Access for Holders & Providers

With Token-gated inventive systems, those who own Access (i.e. NFT holders) can also benefit from communities / businesses / organizations that choose to attract and reward them.

This also means that innovative communities / businesses / DAOs can extend their reach by creating value that would attract a much broader audience.

Downside

Because so much value can be created in Ownership (of Access) to valuable networks. And because so much value can be easily aggregated, accumulated and transferred (i.e. through use of real-world resources - like cash; and inheritance etc.), this can amplify inequality.

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End

Here, I feel obligated to summarize what I’ve just written. But because I’m simply publishing my coursework for the Wharton Economics of Blockchain & Digital Assets Program — I’m just going to end it, as is!