The emergence of Web3, a vision of the internet built on blockchain-based, decentralized systems, has many investors licking their chops because of its financial upside. Meanwhile, others are betting on Web3’s downfall. The rise of NFTs, or non-fungible tokens, in popularity and demand may be the clearest indication of Web3’s promise.
“NFTs will be ubiquitous,” Brandon Buchanan, founder and managing partner of Meta4 Capital, a crypto-focused investment management firm, told Yahoo Finance this week. “Everything we're doing now, and we're starting with art and collectives, will shift to gaming and everything from ticketing to events.”
NFTs, which are one-of-a-kind digital assets, surpassed $22 billion in the global market this year, according to data from DappRadar, a firm that tracks sales, easily eclipsing the $100 million market in 2020. Highly sought after collections like Bored Ape Yacht Club turned images into lucrative investment assets. Buchanan bought a Bored Ape NFT with gold fur for a record $3.4 million at auction. The sale came several months after the artist known as Beeple sold an NFT for $69 million.
In many ways, Black Americans, like Buchanan, are leading the crypto revolution. Twenty-three percent of African-Americans own cryptocurrency, compared to 11% of white Americans and 17% of Hispanics, according to two recent surveys conducted by Harris Poll and provided to USA Today. Minority communities, who have historically been left out of growing industries like alcohol, marijuana and more, are now eager to be a part of this latest shift.
For some, owning a piece of this alternate reality is a unique opportunity; others see it as an advantageous play on the vulnerable, or as European tech critic Evgeny Morozov described it, “hustlers looking for suckers.” For his part, Twitter co-founder and current Square CEO Jack Dorsey tweeted Monday that VCs are the real owners of Web3.
But Buchanan disagrees with this assessment. As evidenced by large buy-in from Black culture, he sees Web3 as the future, led by those who have historically been on the outside looking in.
“Black people in particular are very connected to culture,” Buchanan said. “If you think about the internet and you think about memes, all you have to do is check the vernacular. Check what's happening in culture and music and certainly Black folks are on the front foot of that.
“I think where you have this sort of gap is the financial resources to participate in some of these new economies that are starting,” he added. “I think some of the folks that are early in the technological world and have been buying crypto for a long time have an advantage and when you're looking at new products and new participants in the space you have to think about African Americans and minorities broadly who are interested in getting involved in the space.”
As the narrative on NFTs shifts, Buchanan says, so too will the broader buy-in on its opportunity. Buchanan plans to build Meta4 Capital into the pre-eminent Web3/metaverse focused fund by acquiring the rarest NFT pieces that will pay dividends. The company has already invested tens of millions into highly sought after NFTs from rare digital avatars like Cyberkongz and CrypToadz, to several plots of digital land in varying metaverses.
“I think the infrastructure that's being built … and this movement from Web2 to Web3, where things are decentralized, will be to the benefit of the broader community,” Buchanan said. “So I don't think there's any danger in that. If anything, it's important for us to educate people on it now because I think new industries and new jobs and new roles will sprout out of this.”