Making the creator economy mainstream: Why Coinbase is getting into NFTsJanuary 18, 2022 | By Ben Fox Rubin
NFTs had an explosive 2021.
A term previously known only to a niche crowd of crypto and tech enthusiasts went mainstream. Pringles released NFTs. So did Coca-Cola, the NBA, Paris Hilton, Soulja Boy — the list goes on ...
But while many more people have heard of NFTs, most folks still don’t own them. NFTs, or non-fungible tokens, are digital assets, including art and baseball cards, that use blockchain tech to keep track of who owns them.
Coinbase, one of the biggest cryptocurrency platforms in the world, wants to change that. The company in October announced plans to open a new marketplace where people can buy, sell and collect NFTs.
There are already several NFT marketplaces, but Coinbase could enable millions more people to become NFT owners, just like it did with cryptocurrencies. That change could allow the NFT market to support more artists and musicians, while giving more consumers new ways to collect digital goods and play online games.
To build out this project, Coinbase partnered with Mastercard to give people more payment choices and make it easier for anyone to buy NFTs using a Mastercard card. This collaboration is part of Mastercard’s broader work to support the crypto ecosystem with new tools for crypto wallets and cybersecurity protections. Coinbase’s NFT marketplace is expected to launch soon.
“We’re doing an industry first and taking the lead in the crypto economy for this new and growing class of NFTs,” said Prakash Hariramani, Coinbase senior product director for payments and commerce, about this work with Mastercard.
Ahead of the Coinbase NFT marketplace launch, the Mastercard Newsroom chatted with Hariramani via Zoom about his company’s NFT ambitions, its work with Mastercard and his favorite NFT projects.
Why is Coinbase getting into NFTs?
Hariramani: Our mission at Coinbase is to increase economic freedom in the world. And we believe by enabling more people to join the creator economy and profit from their work, NFTs have an important role to play in this mission.
For example, creators can issue social tokens with a community of fans. And these tokens are like a form of loyalty so I can have, you know, fan clubs, engagements, reward my fans with virtual concerts and so on. More importantly, as a creator, I can have a direct relationship with my fans and keep most of the economic value — unlike Web2 platforms.
From a user perspective, too, NFTs drive economic freedom. If you were using Second Life or other gaming experiences, those were centrally controlled. If you bought assets, you could only use them in that game. With NFTs, you own the assets, no matter which game or metaverse you’re in.
What does the Mastercard partnership mean for Coinbase’s NFT work?
Hariramani: We want to make the process of buying NFTs very easy. Coinbase was basically an on-ramp for crypto for many, many users. Millions of people were able to access bitcoin for the first time by using Coinbase. So we want to do the same thing for NFTs with Mastercard by solving the pain points — to make it as easy as possible to buy an NFT and make sure it’s the best consumer experience.
What are your expectations for NFTs in 2022?
Hariramani: Our chief product officer, Surojit Chatterjee, just released an article, ”10 Predictions for Web3 and the Cryptoeconomy for 2022.” There are two things he called out, which I want to echo, are that NFT-based communities will give material competition to Web 2.0 social networks. Web 2.0 platforms control the experience, they control the economics, they control the relationships. You'll see an evolution of NFT-based communities almost like a different kind of — a more free social network.
You'll also see brands participating more actively in NFTs. You’re seeing brands like Coca-Cola, Campbell’s releasing NFT collectibles in 2021. Adidas just launched a metaverse project. So you're going to see many more brand marketing initiatives as NFTs, in addition to celebrities.
What NFT projects are you personally interested in?
Hariramani: I lean toward NFTs that help build communities. I don’t have one favorite project — I have three favorites, because they can illustrate what you can do with NFTs.
One is in the music world. Kings of Leon is one of the first bands to release an album as an NFT. And what I loved about this project is that they dropped different types of tokens as part of this series called NFT Yourself. One was a special album package. The second type of token was giving you live-show perks like front-row seats, and the third was audio-visual art.
The second project which I really like is ticketing. Live Nation released digital ticket stubs — they’re called Live Stubs — as NFTs. When you buy a ticket for a Live Nation concert, you get a Live Stub, and it’s a really good collector’s item.
The third one I like is more in the metaverse virtual world. Many of these worlds have lots of land, and you, as a player, can build on top of it, bringing NFTs from other projects. What I like in this world — Cryptovoxels — you can create a museum with your NFT art.