It is no surprise that Katie Haun is a strong supporter of non-fungible tokens or NFTs. The former federal prosecutor who now co-leads Andreessen Horowitz’s formidable crypto practice has been a student of the technology since at least 2018 when a16z first financed Dapper Labs, which is now worth a lot of money. Dapper Labs, based in Vancouver, was renowned at the time for CryptoKitties, a collectible digital cat game that perplexed people outside the crypto world.
This year, Dapper rose to prominence thanks to NBA Top Shot, a blockchain-based service that allows sports fans to buy and sell collectible highlight clips — but even that is a minor use case in the grand scheme of things, according to Haun, who spoke at a San Francisco event hosted by this editor on Thursday night.
During our in-depth conversation, she highlighted why she believes NFTs’ very modest user base is set to explode, and she dismissed the notion that only a limited number of people who rely on them for revenue will gain from them. She also discussed with us whether all venture firms will or should become registered investment advisors, as a16z did in 2019.
She also explained an innovation that a16z introduced that allows the heavyweight firm to get a 20% discount on the tokens that now make up 75% of its crypto bets, and she discussed with us whether all venture firms will or should become registered investment advisors, as a16z did in 2019. The following are edited excerpts from that chat. You can also see the entire interview in the video below.
I believe that NFTs will fundamentally alter the internet’s business paradigm for both users and content providers… What is the significance of this for consumers? What if you buy a “Fortnite” skin right now and the game goes bankrupt? Consider this: you are a gamer, and you have the ability to transfer your skills to another platform; you can utilize them anywhere. That has a lot of power with customers. It’s redistributing power straight to [their] hands… It is also beneficial to content producers because they can program these tokens, or digitally scarce products, to get financial upside in all future transactions [while cutting out intermediaries who now take 30%]. Consider the impact on the creative economy. [People are focused on digital art today, but] I believe next year at this time we will talk about music and how obstacles the music businesses break down.
A group of admirers on the internet found [Eilish]. However, those early adopters, her loyal followers who her famous, share in her celebrity? Not the least. In reality, they not only did not partake in her celebrity, but their experience was far worse when she exploded. Ticket costs have increased.
Stadium lines have become longer, and musical venues have sold out for her. Imagine if the individuals who found her and helped her become who she is today had access to anything connected to Billie Eilish’s success via an NFT or a smart contract.
It’s possible that she writes a song for Spotify and then makes a companion smart contract NFT that gives fans exclusive access to her gigs in the future, or allows them to tour with her, or even gives them a share of her royalty streams in the future. Instead of simply recording labels, attorneys, and intermediaries, these fans now partake in the economic benefits.
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