This article is authorized to be reprinted from the translated article on ChainNews, titled "", written by Chris Dixon, Partner at Andreessen Horowitz (a16z), translated by Jiangfei Lu.
In 2008, Kevin Kelly, founding executive editor of Wired magazine, wrote a classic article "1000 True Fans," predicting that the internet would change the economics of creative activities. He wrote: "To be a successful creator, you don't need millions—you don't need millions of dollars, you don't need millions of customers, you don't need millions of clients, you don't need millions of fans. If you have a thousand true fans, you only need 1000 true fans."
These "true fans" are fans who can purchase your products. They are the ones who will drive 200 miles to hear you sing, buy your hardcover and paperback books, even pre-order your next unfinished sculpture. They will pay for your "best of" DVD from your free YouTube channel, and faithfully show up at their favorite chef's table each month to savor the cuisine.
Kevin Kelly's ultimate vision is to make the internet the ultimate matchmaker and to enable everyone to benefit reciprocally in the 21st century. Creators—regardless of the size of their niche market—can more easily find their true fans, who are willing to demonstrate their passion by paying in "real gold and silver."
However, sometimes the internet can also "run in circles." For example, some centralized social platforms have become the primary way for creators and fans to connect, but these platforms have now become new "intermediaries"—inserting advertisements and algorithm recommendations between creators and users, while also "capturing" most of the revenue.
The good news is that the internet is evolving back to Kevin Kelly's original vision. For example, many top writers on Substack are earning more than a traditional 9-5 job, with lower platform fees and enthusiastic supporters leading to substantial income. On Substack, if just 1,000 newsletter subscribers are willing to pay $10 a month to the author, those authors can earn over $100,000 in net income per year.
Cryptocurrencies, especially NFTs (Non-Fungible Tokens), can accelerate the trend of creators profiting directly from their fans. While social platforms still play a role in building audiences (and there should be better decentralized alternatives to traditional social platforms), creators are increasingly relying on other methods to monetize (including NFTs and the crypto economy).
NFTs are blockchain-based records that uniquely represent digital assets, which can be any digital form including art, videos, music, gifs, games, text, memes, and code. NFTs contain highly trustworthy documents about their history and origins, and can attach code to execute almost anything a programmer dreams of (currently a popular code feature is to ensure original creators receive income from resale transactions). Moreover, the security technology used by NFTs is the same as Bitcoin's, which is now owned by hundreds of millions globally with a market value exceeding trillions of dollars.
Due to the soaring sales, NFTs have recently garnered a lot of attention. In the past 30 days, NFT sales have exceeded $300 million, as shown in the figure below:
It is important to note that the chart provided in this article is for reference only and should not be the sole basis for investment decisions, as past performance does not guarantee future results.
Cryptocurrencies go through cycles of rise and fall, and NFTs will also experience ups and downs.
So, why can NFTs fundamentally bring better economic benefits to creators? In short, there are three key reasons.
The first reason, as mentioned earlier, is that NFTs eliminate rent-seeking intermediaries. The logic of blockchain is that once you purchase an NFT, you have complete control over it, much like buying a book or a pair of sneakers in the real world. NFT trading platforms and markets exist and will continue to exist, but unlike other trading platforms and markets, the fees on NFT trading platforms and markets will be limited because ownership based on the blockchain will be transferred to creators and users—you can even shop around and force trading platforms and markets to squeeze out their fees. (Note that reducing intermediary fees can have a multiplier effect on creators' disposable income. For example, if you earn $100,000 in income but the cost is $80,000, reducing the commission rate by 50% can increase disposable income from $20,000 to $120,000, a six-fold increase.)
The second reason is that NFTs bring granular price tiering to creators' economics. In an ad-based model, income generation is more or less consistent regardless of the level of fan enthusiasm. Like Substack, NFTs allow creators to offer special items at higher prices to "select" the most passionate users. NFTs go further than non-crypto products because they can easily be divided into a range of price tiers, as seen in NBA Top Shot where NFT card prices range from hundreds of thousands of dollars to just a few dollars. With crypto, you can buy as much as you want, even as little as 0.0000001 BTC—depending on your level of enthusiasm, crypto granular price tiers allow creators to capture more value below the demand curve.
The third reason, and one of the most important ways to change creators' economics, is to make users "owners," reducing customer acquisition costs to near-zero levels. If you visit the U.S. Securities and Exchange Commission's website and look at the S-1 forms submitted by companies applying for listing, you will see that they have invested significant costs in acquiring users/customers, typically flowing into online advertising or sales personnel. In contrast, during the process where the total market value of cryptocurrencies exceeds trillions of dollars, there is almost no marketing expenditure. Neither Bitcoin nor Ethereum has any organization "backing" them, let alone a marketing budget, yet this has not stopped tens of millions of people from using, owning, and loving Bitcoin and Ethereum.
In the past month, the highest-grossing NFT project, NBA Top Shot, has generated $200 million in sales with very little marketing spend. These NFT projects have been able to develop so efficiently because every user feels like an "owner"—it is precisely this feeling that gives NFTs an edge in the "crypto game." With the help of communities, market trends, and ownership, NFTs facilitate genuine peer-to-peer marketing.
Currently, NFTs are still in the early stages but will continue to evolve. As digital experiences around NFTs mature, they will have greater utility covering multiple areas such as trading platforms, social networks, displays, games, and virtual worlds. Other consumer-oriented crypto products that match NFTs are also likely to emerge, such as modern video games like Fortnite incorporating a crypto economy and mixing homogeneous tokens like V-Bucks and NFTs with virtual goods like skins.
The concept of "1000 True Fans" is based on the original idea of the internet: enabling global connectivity between users and creators, free from the constraints of intermediaries, to share ideas and economic benefits. Traditional social media platforms have deviated from this vision as creators are locked into rigid distribution and profit mechanisms. Accordingly, there are now two ways to challenge these social media platforms:
1. Take away users
2. Take away money
Cryptocurrencies and NFTs provide us with a new way to make money, so let's make it happen together!
