How NFTs will Revolutionize Africa — Forever (pt 1)
NFTs are all the rage. But why will they be ground breaking for Africa?
This article focuses on the value for artists and fans. Parts 2 and 3 will cover other use cases and industries (including real estate, infrastructure, etc.)
DISCLAIMER: The following should not be considered investment advise.
NFT Basics
NFTs stand for non-fungible tokens. Without getting too technical, think of them as a key 🔑 that represents ownership of a digital asset. Each NFT is unique, authentic, and differentiated by a special token encoded on the blockchain, aka strings of code. The blockchain tracks NFT ownership as it changes hands. Assets can range from media and intellectual property (like art, games, music, books, films), infrastructure (like land, real estate, cities), identity (like ID cards and passports), and more. Imagine all of this being traceable online across strings of code. This decentralization, aka the spread of information, ownership, assets, and experiences without concentrated power, is the future of the internet — aka Web 3.0
There can be one or many NFTs available per asset. If there’s just one, you’d own “one of one (1/1).” If there’s many (X), you’d own “one of X (1/X).” Each NFT can have one or many owners.
If one of the NFTs is purchased by many people, this is an example of “fractional ownership.” This means that several people pool their money together to own a single NFT. It’s similar to a susu/sousou, group economics, or passing the offering plate at church lol #samedifference. The crypto equivalent is a DAO, or decentralized autonomous organization (more on this in Parts 2 & 3).
The key takeaway is that you and your KINfolk, aka the homies, fam, village, tribe, community, can own valuable digital assets together, forever.
That’s intergenerational wealth for the whole squad 🙌🏾 #gang
Burna Boy and His 1000 True Fans
To help you better understand, let’s use Grammy Award winning artist Burna Boy as an example. If Burna released a song as an NFT and made only 1000 available for purchase, his 1000 true fans who buy the NFT can claim ownership of the rare and exclusive Burna Boy song. The song would be considered a collectible because of its limited supply.
If Burna sells each NFT for the equivalent of $50, he earns $50,000 directly from his fans — for just one song. Emphasis on directly. That’ll be important later.
Now, let’s look at why this is meaningful for everyday Africans.
1. Everyone Wins: Ownership & Intergenerational Wealth
The Burna Boy collectible is an example of community ownership. Fans of Burna have a stake in his success and legacy forever. Here’s how:
Likened to a stock (but not exactly the same), NFTs are initially purchased in the primary market and resold in the secondary market.
If you buy the Burna NFT for $50 in the primary market, you can hold onto it forever or sell it hours, months, or decades later. Let’s say you sell it for $1000 in the secondary market. You then pocket the profit on that $ale.
Note: The price of the NFT in the primary market is set by Burna. The price in the secondary market is set by you. Ultimately, it’s bought based on the perceived value of Burna Boy at the time of sale. So the secondary market is a buyer’s market, aka based on what the buyer is wiling to pay.
In moments, Burna’s audience flips from consumers and fans → owners and investors 🤯.
This investment now offers a life changing wealth creation opportunity for Burna Boy and his fans. In moments, Burna’s audience flips from consumers and fans to owners and investors. His fanbase builds wealth off of what they love, believe in, and create together. That’s revolutionary.
Note: Like any investment, NFT secondary prices can dip in value and sell for less than the original purchase price. This is the investment risk fans take on. Key is buying an NFT that you speculate, aka you believe in/have conviction, will increase in value over time. A few influencing factors include Burna’s consistency, streaming numbers, growth and loyalty of his fan base globally, and awards. For example, Burna’s stock price, aka value in the market, went up after winning his GRAMMY this year (shout to all the African GRAMMY award winners putting us on the map 🙌🏾). In short, so long as Burna makes music that moves the world, his price will increase well after his last show and he and his fans win together — forever (did I say that already? 🤔)
2. A New Era: Revenue & Royalties
2 things are true about Africans:
- We create significant value for the whole world through music, fashion, sports, food, natural resources, labor, and intellectual property #braindrain.
- We rarely capture that value.
The wealth we create for others doesn’t convert to wealth for us. For example, many of the world’s supply chains start in Africa (ie cocoa, coffee, cobalt, diamonds, oil, etc). Supply chains are driven and controlled by intermediaries and large companies that influence the price of goods and services. Their cut and profit margins drive the ultimate purchase price. As such, original value creators or laborers are the source of lucrative opportunities but don’t pocket from them.
The wealth we create for others doesn’t convert to wealth for oursleves.
Fortunately 🙌🏾, NFTs change this by giving us the chance to capitalize on our own value and generate new revenue streams and royalties. Here’s how:
Today, an African writer can release a book manuscript as an NFT or a village chief can sell plots of land via an NFT. They’d receive most of the money from the primary sale. A small-ish percentage would likely go to the marketplace that hosts the NFT sale. Because the NFT lives on the blockchain and traces the asset back to the original owner, the writer and chief always get royalties, aka a percentage of resell revenue, for…you guessed it…forever.
This direct relationship with original asset owners and investors removes middle men and allows Africans to increase our income/revenues. Long term, we capture our value in the market. NFT royalties are revenues, forever moods.
Back to the Burna example. When you/your tribe sell your $50 NFT song for $1000, Burna Boy gets a cut of that too. For the first time in history, artists directly profit off of their work whenever it’s bought and sold into perpetuity.
NFT royalties are revenues. They’re forever moods.
3. Self Driving Money: Liquidity, Collateral, and Financial Freedom
Probably the most fascinating and unexpected benefit of NFTs is its pathway to liquidity, aka easy access to money.
An NFT is fundamentally a financial instrument. It represents a micro economy centered around a valuable asset/creator. The asset can be leveraged, aka used for something else, in financial transactions.
Another area of crypto that is incredibly innovative is decentralized finance, or DeFi. DeFi represents the democratization of money and financial tools. NFTs are DeFi. A digital asset like a song or deed becomes a pseudo stock. Best of all, an NFT can be used as collateral to borrow or lend money while earning interest AND accruing value.
Imagine leveraging your Burna NFT, now valued at $1000, as collateral to get a low interest loan to pay your school fees. Because Burna keeps dropping those hits 🔥 and the NFT price goes up, you can sell it to pay back your loan. Or, assuming your education affords you more financial success, you can pay back your loan and keep your NFT.
This is the future of money and freedom.
4. Creator Economy: African Youth Transform Global Perceptions
One of Africa’s largest and most untapped markets is the creator economy. Because of NFTs, creators across art, film, gaming, sports, etc can monetize their followers and intellectual property (i.e. ideas, copyright). They can have royalties and revenue streams across multiple assets. They can leverage their work to earn interest or borrow capital to create even more value.
Africa has the youngest population in the world but rampant unemployment. NFTs provide wealth creating opportunities for young people who create content that builds global networks of admirers and investors committed to their success. Artists Lethabo, Osinachi, and Micah Johnson are all examples of this.
Africa NEEDS young people to lead the crypto revolution. Viral NFT content attracts owners and investors worldwide and becomes a new source of foreign direct investment (FDI), economic stimulus, and wealth creation.
Controlling and profiting off our own narrative shifts global perceptions of who we are and what it means to be African. We need artists, young people, and small businesses (which are one in the same) to adopt NFTs because they will increase our collective success and value.
African Giants Rise Up! ✊🏿💪🏽
We’re stomping through the future 🚀 like 💃🏽…
WAIT ✋🏾 Before you go…
Hit the green FOLLOW button for notifications about Parts 2 and 3 😁 Also, assemble your crypto crew so you don’t miss the 🌊:
- GANG: Crypto for Black Economic Empowerment (CBEE) the black/African crypto community leading the crypto revolution worldwide. Several folks mentioned in this article are CBEE familia. Join here
- INVEST: If you’re a founder, investor, or artist, I’d love to hear from you. LMK how I can be helpful. Always exploring new projects, companies, artists, and communities to invest in. DM me on Twitter @heyerikan or email at Erikan@welcomekin.com.
- CREATE: If you’re an artist looking to launch an NFT, message Black NFT Art. They represent some of the best artists in the world. Tell them I sent you 👋🏾
- MINT: Apply for funding at Mint Fund to “mint” your first NFT.
- PROTECT: Secure your intellectual property and legacy! Consult with crypto, blockchain, and legal extraordinaire: Professor Tonya Evans
About the author:
Erikan Obotetukudo is the Co-Founder and President of Crypto for Black Economic Empowerment (CBEE) — a global black/African crypto community on a mission to redefine the financial futures of black people worldwide. Representing 20 countries and 6 continents, CBEE has created its own economy. Members have helped each other generate $1MM in NFT sales in 1 Min, secure a historic Hollywood film deal, grow crypto investment portfolios by 75x, get featured in international press like the Wall Street Journal, Vogue, CNBC, Cointelegraph, and launch new crypto careers, startups and funds. Erikan is a Nigerian-American who’s been a strategic advisor to executives and leaders across finance, tech, and media including Linkedin, Conde Naste’s WIRED & The New Yorker, Tastemakers Africa, She Leads Africa, Ingressive, Future Africa, and more. She considers herself an artist in finance and has traveled 24 countries following the papertrail of multi trillion dollar economies driven by multicultural communities. She leverages this exposure to co-build CBEE, the “Crypto Black Wall Street,” with other young Black/African crypto leaders. She invests in crypto projects worldwide and dreams of building the next 💯 years.
