---
title: 4.5 Future Creator Economy Developments 
description: The disappearance of NFTs and a new intuition for internet assets.
---

# 4.5 Future Creator Economy Developments → The disappearance of NFTs and a new intuition for internet assets.

The goal of this module has been to better understand the future of intangible value - also known as non-fungible tokens or NFTs. Despite the progress of the root technology and the infrastructure surrounding and supporting that technology (Oracles, Indexers, Storage Solutions, etc.), the full application layer of Non-Fungible Tokens (NFTs) has been minimally developed beyond the early digital primitives that encompass digital art, profile pictures, and some early forms of music and content. The focus of this lecture is to better understand how NFTs might evolve into the future: 

## Digital Intangibles

_“There are endless intangibles that can be moved on-chain. The nice thing about intangibles is that they can be natively digital, and you don’t need a bridge to the physical world.”_

Let’s start with the digital intangibles of the future. Digitally, NFT’s will have free reign to expand exponentially for the following reasons: 

* **Regulation free:** Meaning they are able to live exclusively in cyberspace and are not required to pay homage to any specific jurisdiction. While a specific project or team may need to relocate or deal with a regulatory body, the value contained in itself is not accessible beyond the digital realm - and hence is in position to thrive globally. 
* **Instantly Owned:** With account abstraction becoming more important, wallets and addresses are increasingly connected to specific account ID’s. When a user purchases their NFT - irrespective of what kind of NFT it is - the user instantly controls the value of the non-fungible asset. From a financial and usability perspective, this is a major upgrade for users familiar with centralized custodians managing both their digital and physical life. 
* **Representatives of Non-physical Realities:** In being entirely digital, the represented value is much more customizable than only physical realities: Things like time, participation, AI generated art, objects in the Metaverse, objects in Games, assets (and financial products), as well as access to communities, information, and even music - do not require a single atom to move outside of the digital sphere. This means that the velocity of growth is far better positioned to increase relative to physical non-fungibles tokenized on-chain. 

From a development perspective, it is much more likely that digital-first NFTs will find product market fit, revenue, and active users, before physical NFTs. That being said, there are trillions of dollars in locked value, which physical NFTs are poised to disrupt: 

## Physical Intangibles: Assets from that $77 trillion intangible asset sheet

_“We will also trade hotel rooms, and weeks in vacation villa, and billboards, and stadium access. These will also be NFTs. They will be centralized - but for these to happen you the regulatory bridges for the transactions to be enforceable off chain. But there the benefit is, that you are going to move things out of massively fragmented databases, into markets. There is even today, even today in 2022, no market for nights in hotels in SF.”_

As Punk explained in the podcast for a16z, it's clear that there is an obscenely large world of physical non-fungible assets, that await tokenization - with a huge opportunity to create innovative business models at the intersection of Web2 and Web3. 

Take for example, booking of a hotel room and the tokenization of one night in a hotel room at a specific location: While the booking itself was originally open to everyone, there is no current mechanism today to proposition someone with a booking - if you are someone without a booking. Being able to create a market for the booked hotel room creates optionality, from which users (people looking to stay in the hotel at the last minute) now have an option that has hitherto not been possible. Just as Airbnb provided DIY hosting optionality in an industry dominated by hotels, so NFTs have the opportunity to provide individual monetization optionality for the non-fungible choices we make. 

## Physical NFT’s Should Be Understood According to the Following Characteristics

* **Will Require Regulatory Underwriting in Some Manner:** This is to say, that it is virtually guaranteed that any physical activity will be done by one or more physical entities, such that these entities will need some form of guidance or regulatory clarity on how they are allowed (or not allowed) to interact with the product at hand. This would apply to real-estate, finance, shipping, supply-chain, real-world entertainment, dining and hospitality, and so forth. More than anything the relevant framework (most likely differing from country to country) would need to provide the basis to guarantee that the activity conducted via the NFT is actually executed physically. In short, that there is a social buy in, to the value designated to the NFT. 
* **Is widely applicable on a global and fractional scale (baskets of items):** The benefit of physical NFT’s is that instead of remaking the wheel or searching for product market fit in the digital realm, there is an entire world of intangible non-fungible assets, that already exist, and can be readily scaled up - globally. Thus, real-estate, clunky and siloed, can eventually become tokenized, fractionalized, and aggregated globally - such that a single house could be represented by an NFT (and recognized as such) from which it could then be fractionalized into 100 pieces, and combined with 1,000 other houses from around the world with the same structure. These baskets can then be bought or sold, used as collateral, or managed from a distance. The _scale_ of the non-fungible market for physical goods is far larger than that of fungible goods like money or gold. 

_“It is safe to say that the overall addressable market of NFTs are intangible goods and tangible non-fungible goods which can be tokenized - is utterly gigantic.”_


* **Markets for the enablement of price discovery for new social goods. Moving things out of databases and into markets:** This final value proposition is somewhat controversial depending on the nature of the market, how well the market is regulated, and how much the market is manipulated. But the theoretical possibility remains quite evident: With NFT’s representative of the physical world, we can drastically expand the scope of what can be tokenized, and in what situations value can be exchanged. In a similar manner in which the original internet has democratized information and allowed any company to represent themselves on a website, so the token - and specifically non-fungible revolution - will allow any person or company to create a mechanism of value transfer for the non-fungible value in their life. In principle, this can enable the development of new social goods, such as open bidding on the time of day an activity is carried out. 

To date in crypto, there is very limited product market fit and experimentation with physical NFT’s beyond limited pilots in fashion, ticketing, and art ownership. The coming two decades suggest that while digital NFT’s may be easier to implement, and faster in attracting users - there is undeniable value in expanding non-fungible tokenization, into the world of physical assets. 

## NFT’s and Reality: When ‘NFT’ is No Longer Relevant

The original presupposition behind the success of an NFT - and all of crypto for that matter - is that the world has moved on-chain, and native - original content, is being minted in a non-fungible manner. That is to say, gone are the days when YouTube controls a monopoly on video creation, and broadcasters own the full rights to any single event - rather, the event itself, the podcast, the original video - is only accessible to the world, from inside of it’s non-fungible wrapper. 

_“I believe we are well on our way to **NFTs becoming the "port of entry" for every piece of media on the internet**. This includes the 2D audio/visual and text-based work of the web, and the emerging 3D work that will encompass the metaverse of games and virtual worlds tomorrow.” ([Variant Fund](https://variant.fund/ideas))_

While the road to this reality will undoubtedly take time - in a similar way to that it took close to fifteen years for the internet to become a mainstream staple of business, social life, and communication - the culmination point of ‘adoption’ is when the token is no longer even referred to as non-fungible - but simply as the representation of the non-fungible asset or reality that it represents. 

All of this is to say, that Non-Fungible tokens (NFTs) are here to stay, and as we progress in our understanding of the business models and use-cases of Non-fungible tokens - in both the digital and the physical domain, we will develop improved intuitions of the technology until it ‘disappears’ from public consciousness, and lives as intangible value built into the world. 
