Minting NFTs for Social Good
Digital assets have created a whole new avenue for funding social impact
We’ve all heard of NFTs they seem to be everywhere. NFTs are surreal and real at the same time. Anything digital can be sold as a NFT (Non Fungible Token). The currency used to purchase NFT is crypto, mainly Ethereum as NFTs are currently mostly created on the Ethereum blockchain.
In recent months (since March 2021) NFTs have become hugely popular though the technology for NFTs has been around for quite some time. Since the explosion of NFTs into the mainstream they have generated enormous amount of funds for causes. and thus has created a whole new avenue for funding social impact.
Before I deep dive into what NFTs, I’ll highlight a few notable NFTs to give you a sense of how much money is out there for nonprofits to tap on.
Jack Dorsey, CEO of Twitter and Square, sold his first tweet as an NFT for over 2.9 million dollars. He donated all the funds raised from the sale to Give Directly, a nonprofit giving direct cash to people living in poverty Jack converted the proceeds (earned in ETH) to Bitcoin (aka internet gold) and sent it to Give Directly. Why in Bitcoin and not USD? Well that requires another post.
Edward Snowden, the famous whistleblower who now resides in Russia sold his NFT for $5.5 million. The proceeds from the sale of his NFT will go towards his nonprofit Freedom Press, the goal of which is to defend and support cutting edge transparency journalism in the face of adversity
Paul Graham, Founder of Y Combinator and a tech investor promoted and backed NFT created by Noora Health a nonprofit that works in South Asia in the area of maternal and infant care. Paul Graham not only created massive awareness of the nonprofit’s work by promoting the NFT to his network but also bought the NFT himself for a whopping sum of over $5 million
Coming back to…
What are NFTs? The Simplistic Explanation
NFT stands for Non Fungible Token meaning one of a kind token that represents a unique digital product or asset. The transaction of NFT (between buyer and seller) is recorded on the Ethereum blockchain giving the buyer proof of authenticity and ownership.
The way it works is, creators sell their digital products which can be just about anything digital - a tweet, meme, art, music, video clips, photographs, trading cards. Interested buyers bid for the digital product. The one who bids the highest gets the unique token attached to the product. The buyer can represent their collection online. Think of the buyers as collectors, collecting unique digital products to display in their online gallery
There are various platforms that supports NFT transactions. OpenSea is the most popular one and the largest NFT marketplace ranging from digital art to trading cards, domains etc. Then they are the specialized ones like Foundation for digital art and Valuables for Tweets.
Since the NFT tokens are created on the Ethereum blockchain they can only be bought with Ethereum, a cryptocurrency just like Bitocin, Dogecoin etc. There are other blockchains that are now trying to create their own NFTs but so far it’s been in the Ethereum realm.
There is a lot of confusion related to NFTs since the buyer only gets a token and no real-world rights to the art so what is he buying? One way to think about this is imagine you buying an autographed art print from a famous artist. You have not bought the rights to his art, you only have a copy but an autographed copy which makes it special in itself. With NFTs this transaction is authenticated and transparent and if the artist is selling only a limited set, then you have one of them.
Whatever being your thoughts , NFTs are really hot at the moment. There is a NFT being created every minute and buyers looking to spend their crypto. NFTs have the potential to make a real social impact. For influencers and celebrities it provides a channel for them to raise money to support their causes. For nonprofits it's an opportunity to raise money through a new channel that never existed before. Its new money generated from crypto which when converted can be used immediately and if stored in crypto it can potentially grow in value.
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