Thinking Out Loud: The Transfer of Value
If you have been keeping up with the reading for Clout.art, then you will know that one of the fundamental requirements to mint an NFT from one of your social media posts is this:
| You must destroy the original post.
Yes, that’s a scary thought, but it is an essential part of the process, one that protects the value of your assets and ensures that you endow them with the maximum amount of value possible.
In this article, we examine the concept of transferring value. By the end of it, hopefully, you will find that the delete button is your friend and eradicating your presence on Instagram is the most fun you did not know you would have this year.
Note: I am joking. We only want you to pick those memorable and unique posts that have value to you and your followers. The more carefully you select candidates for minting, the more successful your NFTs will be.
If you are not sure what an NFT is, then before you read this, I recommend you read Yes, You Do Want to Burn Your Instagram Posts into NFTs, and Here is Why.
Valuing an NFT
To transfer value from the original Instagram post to an NFT, we have to work out what that value is. We do that by giving the post a score. Like The Colonel, we use a secret recipe known only to us that looks at your following, the age of the post, how old the post is, how much engagement (likes, comments, shares) it received and a few other secret ingredients. That score enables us to put a dollar figure on the initial value of that post should you elect to mint it as an NFT.
While the algorithm is sophisticated, the idea is straightforward. The more people know about or remember that Instagram post when prompted, the more valuable it is likely to be. The value of the NFT assigned by the Score formula gauges the potential popularity of that post as a collector’s item.
How do you, the content creator, realise that value?
While your post sits on Instagram, you can do two things. You can look at it, and you can delete it. But you can’t monetise it within the social media timeline. This post lives in the past, and on social media, you are only as good as your next post, which is probably sponsored.
While it remains on the timeline, it is equally accessible to everyone. As the Blues Brothers noted, “You, me, them, everybody!” The only beneficiary at this point is Instagram.
Mint that post as an NFT, and then everything changes. Collectors can now bid to own that unique point in history, and if they are a fan, they are bidding to own a moment in time that they shared with you.
However, this uneven playing field, where collectors can compete to be the only human alive to own a digital asset (in this case, an NFT of one of your Instagram posts), cannot succeed if it competes with an even playing field where everyone has equal and free access. I am not saying that people won’t see your Instagram Post if someone owns it as an NFT. But holding that NFT comes with rights, such as earning revenue when someone wants to share it or make use of it. It is an asset that can generate an income based on the terms and conditions built into the smart contract that powers it. To ensure the supremacy of the NFT, the alternate channel must go. You must delete the original post.
Here are some examples that demonstrate this principle:
Charlie bit my finger
This famous video of two young brothers from 2007 had over 800 million views. The original poster deleted it from YouTube, so I can’t link to it, at least not the original. Someone paid US$750,000 to own that video in the form of an NFT. Now one person owns the rights to that pivotal moment in Internet history. They hold a piece of art. One wonders what that might resell for in the future, especially with the current explosion of interest in NFTs.
Interestingly, if and when that video NFT is resold, then the brothers will get a cut of the resale, just like Beeple did very famously a few weeks ago. This is because the proof of origination is locked into the smart contract for the NFT.
Injective Protocol and Banksy
DeFi company, Injective Protocol, bought a Banksy called Morons for $95,000. They digitised it. Then they burned it so that this original artwork only existed in digital form. Finally, they minted it into an NFT, which they later sold for $380,000.
They did this to make a point about the transfer of value. As the BurntBanksy Collective, which was part of the stunt, stated:
If you were to have the NFT and the physical piece, the value would be primarily in the physical piece. By removing the physical piece from existence and only having the NFT, we can ensure that the NFT, due to the smart contract ability of the blockchain, will ensure that no one can alter the piece and it is the true piece that exists in the world. By doing this, the value of the physical piece will then be moved onto the NFT.
This transfer is equally valid for a digital asset that originates in the digital domain, such as an Instagram post. For the programmable abilities and protections that an NFT offers to have full effect, the NFT cannot compete with an alternate digital access point to the same content.
Why would people value your content?
Value is a perception, and the perception of value is highly personal and subjective.
This concept is very relatable to a brand, which is nothing more than the manifestation of feelings by the market to a mix of information and prejudices about a company or product. Companies spend a lot on messaging to affect those perceptions in beneficial ways.
The question is, why would someone value your content? If they are a fan and have liked and commented on all, or almost all, of your Instagram posts, they will almost certainly perceive value in the content. Not all people have the DNA of collectors, but many do. Being allowed to be the only person who owns a piece of art, with all the rights and privileges that come with that ownership, is a powerful motivator. This is the reason behind the Clout.art Score, which provides a mechanism to place value on a social media post when it is minted into an NFT. Once you have sold the NFT for the first time, it is up to the marketplace to decide its value.
The availability of bragging rights is a mighty contributor to perceived value and a considerable driver of demand.
One final point. For the total value of the original post to transfer to the new NFT, the essence of the post must remain the same. The experience of digesting that content cannot change. You can’t lose the audio to a video, for example. It must be the same post that was previously freely enjoyable on Instagram (and later Twitter and TikTok).
The more popular your Instagram post was, the more value it is likely to contain. By minting it into an NFT and removing the original version, you can realise that value by tapping into a marketplace where that value will drive demand. By deleting the original post, you ensure that you obtain all the value from that post in a freely transferable digital asset that sits on blockchain in the form of an NFT. As that NFT passes through the hands of collectors, you will consistently profit from your originator’s fee, which is programmed into the NFT itself.
And here is my kicker for this article. If you continue to build your social media presence after minting your first NFT(s), those original mints will also grow in value. And when they resell for a higher price, then your percentage will rise as well. You can increase your income for all your digital assets as you continue to grow your brand from now and forever. Well, until you unplug your keyboard.
Clout.art powers the creator economy of the future by turning the most valuable content, such as your most successful Instagram posts, into unique NFTs. As a microservice, a marketplace, and a staking platform, Clout.art is where creators and fans come together to create, grow or exchange social capital through the $SWAY token.