NFTs stormed the art world with sales and headlines, but they’re now facing a major correction. The ongoing economic downturn caused a significant loss of market value, with 75 per cent of the market value disappearing at one point.
However, experts believe the NFT market will persist and play a crucial role in shaping a decentralised, equitable, and creative economy.
Snowcrash, an NFT trading platform formed in partnership with Sony Music Entertainment and Universal Music Group, is one such effort that aims to empower artists and collectors to create and trade unique digital assets on the blockchain. The firm was founded in 2022 by Walter De Brouwer, Chief Scientific Officer at Sharecare and an adjunct professor at Stanford University School; Jesse Dylan, Founder and CEO of Wondros; and Jeff Rosen, President of the Bob Dylan Music Company.
By using cutting-edge technology, Snowcrash seeks to push the boundaries of the NFT world while also fostering a vibrant community of creators and supporters. Its infrastructure is based on a secure, environmentally responsible Solana blockchain with easy, consumer-friendly, green methods for acquiring and interacting with NFT art.
Recently, Snowcrash announced the launch of National Geographic’s Genesis NFT Collection, GM: Daybreak Around the World in a blind drop. This is expected to attract collectors and investors alike, eager to own a piece of National Geographic’s stunning visuals in the form of NFTs.
In this interview, De Brouwer speaks about the current state of the rapidly-evolving NFT space, his dynamic leadership approach at Snowcrash, and the cutting-edge digital innovations that are on the horizon.
Edited excerpts:
How do you see NFTs changing the art and collectibles markets?
I believe that NFTs have already brought about significant changes. However, as we are currently in a bear market, we may see some people attempting to manipulate the system until regulations are put in place, and the real market emerges.
NFTs are not only about collectibles and art; they represent a larger movement towards tokenisation. This involves placing physical and digital assets on the blockchain, including pictures, movies, money, and even houses. By tokenising these assets, we are creating an Internet-native payment realm that transcends the legacy structures of traditional finance and payment rails.
As the world becomes increasingly digital and virtual, we require a new infrastructure to enable frictionless transactions of currencies, properties, and even identities. Some refer to this as the metaverse, but I believe it is more accurately described as a new infrastructure that facilitates seamless transactions across various asset classes.
How does Snowcrash ensure the authenticity and uniqueness of NFTs, and what measures do you take to prevent fraud or plagiarism?
Our investors, Sony and Universal, have the expertise to help us with copyright management. They have established copyright systems, and we work with their intellectual property. We are already utilising zero-knowledge proofs in our systems, which is poised to revolutionise the entire on-chain movement.
Can you walk us through the process of creating and selling an NFT on your platform, and how do you regulate pricing, royalties, and ownership rights?
Our approach depends on our clients’ needs. They tell us their requirements, such as KYC/AML compliance and the use of specific currencies. We then create a white-label solution tailored to their specifications, allowing them to conduct their business seamlessly.
We cater to a diverse range of clients, from those who require complete freedom to those who prefer walled gardens. Our clients are primarily large corporations in the media industry.
How do you balance the desire for decentralisation and democratisation of NFTs with the need for regulation in the industry?
I believe that everyone desires regulation, but it’s important to strike a balance between centralisation and decentralisation. Both extremes are not ideal, and we need to move towards the middle of that spectrum.
In the evolution of technology, we cannot simply adopt a one-size-fits-all approach of either centralisation or decentralisation. It takes time to strike the right balance.
If I could create an ideal world, it would be decentralised, open-source, and peaceful. Unfortunately, we have to work with the reality we have.
If Snowcrash is an invite-only platform, doesn’t it make it exclusive and not democratic?
I don’t think our platform is invite-only. Some clients may prefer to make their NFTs invite-only, and we accommodate their requests.
The media and entertainment industry is vast and complex, with Hollywood, Bollywood, and many others. Our company is just a small part of that industry, serving our clients. We’ve noticed that most of our clients are moving in the same direction, which is exciting. I believe that 2024 and 2025 will be good years for our industry.
Currently, we’re focusing on building our platform, and as someone with a background in AI, I’m thrilled to see that we can integrate AI into the blockchain and use cutting-edge technologies like zero-knowledge proofs.
There’s no lack of innovation in our industry. Like many things, there was a hype cycle in the beginning, and now we’re at a point where the tourists are leaving, and things are settling down. However, the underlying potential is still there.
Your profile says Snowcrash is working on the Web3 strategies of Sony Music and UMG. Could you please tell me more about it?
Sony and Universal are our investors, and we work closely with them to navigate the ever-changing landscape of the entertainment industry. Hollywood is a bit like a cowboy trail, where someone may shoot in the air to signal a change, but it takes time before someone takes out their gun and shoots. These are large corporations that move slowly but surely they are adapting to new technologies and trends.
The nice thing about Hollywood is that when they do take action, they do so quickly and decisively.
I came across an article that says your company will release NFTs for Bob Dylan and Miles Davis as its initial offerings in 2022. What’s the status of that?
We’re still waiting! Working for large corporations means going through a lot of meetings with innovation groups, product groups, artist managers, artists, and legal teams. It takes patience to navigate these processes.
As I’ve gotten older, I’ve learned to be more patient, even with my students who all have their own journeys. Sometimes it takes two or three years of work before something finally comes to fruition. Success is not just luck — it’s a result of hard work and persistence.
This year is not a good time to launch new products; not much is selling in the market. Others are waiting for next year to focus on building more dynamic NFTs, streaming NFTs, community identity, and soul power tokens. Everyone is just working hard to build for the future.
The industry seems to be in a period of building and innovation, with many large corporations moving slowly but surely towards new developments such as dynamic NFTs, streaming NFTs, community identity, and soul power tokens.
While it may not be a good year for launching, there is a sense of anticipation for what the future holds and many are focused on building for the year to come.
What happens when an artist releases an NFT of their song? Could you explain this using an example of a Bob Dylan song or album? Does a user on your platform get to own the publishing rights to Blowin’ In The Wind?
Well, Dylan has already done that. He made a special version of Blowing In The Wind and sold it for US$1.77 million as a collectible. While everyone can listen to it, only one person can own it.
As someone from a time when we owned physical music, I think there will be a market for owning music as an alternative asset category. People used to discover new music in stores and take ownership of that discovery, and I think something like that could happen again. There may be a market for owning music beyond top hits.
There will be changes in the music industry, such as dynamic NFTs and streaming NFTs, and community identity. After Soul Power tokens, everyone is working to build for the future. There will be new forms of music, such as generative music created by AI, and derivative songs will become even easier to make.
When The Matrix movie was being made, the directors asked every actor to read a French book called ‘Simulacra and Simulation.’ The book introduces the concept of simulacra, which refers to a copy with no original. In contrast, a simulation represents something else, like a photograph of a book.
The idea of simulacra is relevant to our world today, as we increasingly rely on models and simulations to create reality. Instead of basing our understanding of the world on an original, we first create a model and then use it as a reference for reality. This way, we are moving towards a simulacra first world. I have seen several pictures of people during my journey at Midjourney, and they seem to look at me as if they want to live. However, they don’t exist as originals, only as simulacra. This highlights the growing importance of simulacra in our modern world.
The film industry will also be affected. We’re moving towards a world of simulacra, where we first make the models and then create the reality. Software like Midjourney and Runway allows people to make their own video productions from scratch.
Hollywood’s production sets and bureaucracy will disappear, and all the locations, sets, and clothes will become digital repositories. Actors might act against a screen, and faces can even be deeply faked onto them. These changes will revolutionise the industry, and it’s exciting to witness it all.
I can understand people wanting to buy a Bob Dylan song, but why would someone be interested in buying the NFTs of a debut album or a single from an artist who’s just getting started?
It’s true that there are many music lovers out there who enjoy discovering new music and discussing it with others. While you may not be an expert in music, you still have an appreciation for it and understand that others may use different techniques and tools to create their music.
In terms of investing, people are always searching for alternative assets that can potentially provide a return on their investment. Wine and sneakers are examples of alternative asset categories that have become popular among investors. It’s important to take risks, but it’s crucial to combine them with something that you are truly passionate about and enjoy. Otherwise, the risk can become tedious and unfulfilling, and you may end up losing in the end.
What is your approach to community building and user engagement?
This is a difficult one! Some clients come to us without an existing community and ask us to create one for them. However, we cannot pretend to be the artists themselves who are responsible for creating their own community. It’s important for artists to continuously engage with their fans and be in conversation with them.
This is where Web3 comes in. It offers a more fluid conversation with fans and allows for a deeper investment in getting to know the artist. For example, fans can buy an artist’s book, songs, and even tickets to their next event all in one place. Ultimately, we all invest in things we like and share those stories with others, which makes us feel special in our own way.
About your partnership with Nat Geo, NFTs have been receiving a lot of flak from purists. In the end, isn’t a buyer only paying for bragging rights to signify ownership?
It’s bragging power! It’s understandable that owning rare or valuable items can provide a sense of pride and status. Additionally, discussing and sharing opinions on art and collectibles can be a social activity and a way to connect with others who share similar interests. As for investing in art, art can indeed be a valuable asset category, with prices often increasing over time. And owning NFTs, including digital art such as Apes, is becoming increasingly popular in the art world.
There are many reports that crypto is dead in America. What does the crypto winter mean for the NFT space? When do you think the market will kick off again?
We have been in a bear market since 2010, experiencing one winter after another. We’ve weathered many seasons, and even though my focus is on AI now, I’ve made a joke about it, saying that when I was in the summer of my life, I lived in the winter of AI, and now that I’m in the winter of my life, I live in the summer of AI.
But the truth is, everything is cyclical, and people will eventually start focusing on something else. As AI becomes more centralised, people will need decentralisation, provenance, and more. Crypto is not dead, but not every coin will survive.
As a shameless Bitcoin maximalist, I believe that Bitcoin is the future, and I think that the upcoming Bitcoin halving next year will make it even scarcer. In addition, there will be presidential elections in 2025, which will be a great year for Bitcoin.
How is Snowcrash positioning itself to navigate the current bearish trend in the NFT market and emerge stronger in the long run?
We have a great team, a low burn rate, and fantastic investors, so I believe we can weather a few winters while building and developing our platform.
It’s true that the younger generations will inherit the world that we leave behind for them. And it’s exciting to think about what innovations and advancements they will bring to the table. The convergence of AI, blockchain, and the Metaverse could indeed create some fascinating new possibilities.
However, it’s important to remember that these technologies also have their potential risks and challenges, and it’s up to all of us to ensure that they are developed and used responsibly. As for the ageing of previous generations, it’s a natural part of life and hopefully, we can leave behind a world that is better for future generations than the one we inherited.
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Image credit: © TEDx Brussels/Scorpix
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