Newsletter NFTs, Stackloot, and Twiloot

NFTs for newsletters, inspired in part by Loot

This is not financial advice; NFTs may involve risk; NFTs may be regulated in your jurisdiction; do your own research; etc.

[Update, October 4, 2021: I will be posting a Part II of this article, likely this week.]

Problem: Creators Need Money!

Substack is an opportunity for writers and other creators to gain audience and income.

But many Substack creators have a dream more than a large audience or income for their creative work. (As Li Jin has explained, the creator economy lacks a middle class.) How will creators sustain their dream for the months or years it might take to achieve it?

Potential Solution: NFTs

NFTs: Representations of files or objects, which can have utility and value

Before addressing how NFTs can have value for newsletters and in general, I feel I should provide a short introduction to NFTs. (If you'd like a more detailed introduction, you might read guides from ethereum.org and Decrypt.)

An NFT, or non-fungible token, is a representation on a blockchain (such as Ethereum) of a certificate or entitlement pertaining to a digital file (such as an image or text) or physical object. Cryptocurrency such as bitcoin is fungible – one bitcoin is interchangeable with any other bitcoin. In contrast, each NFT is created (“minted”) as a distinct item and might have different value or use from another NFT.

NFTs may be sold and – if the new owner chooses – resold, usually via a cryptocurrency wallet (such as MetaMask) in an NFT marketplace (such as OpenSea). The NFT belongs to and can only be used or sold by the person with the wallet address recorded as owning the NFT.

In minting the NFT, the creator may provide (or not provide) that each resale of the NFT yields a royalty – a percentage of each resale – to the creator. Minting, selling, transferring, or buying NFTs might (or might not) involve a fee charged by the cryptocurrency network – “gas,” the cost of computational resources, on Ethereum – or by the marketplace.

NFTs have attracted significant attention and money in 2021. Several examples are NBA Top Shots, Beeple's art, CryptoPunks, Axie Infinity, and Bored Ape Yacht Club. Of course, NFTs may range significantly in economic value, from zero, to modest amounts, to the large sums noticed by the media.

Let's leave aside NFTs with high sale prices due to famous creators, luck, or an investment bubble. How might an NFT have value?

The buyer of a typical NFT can't sell the associated file or use the intellectual property beyond a limited (implied or explicit) license. The file’s creator typically retains most of the IP rights. (For more, see these pieces about NFTs and ownership.)

To that extent, the value of NFT acquisition is pride and prestige. For example, someone might buy the NFT for a CryptoPunk, one of 10,000 digital character images prized in the crypto, tech, and art worlds. Anyone can view or download a copy of the image. But only the NFT owner may say that he or she “officially own[s]” (as the creator of CryptoPunks puts it) that CryptoPunk.

An NFT may also unlock benefits from the creator or others who want to provide benefits. OpenSea allows the creator to include “unlockable content” for the buyer of the NFT, such as an additional file or an access code. Blockchain-compatible applications may recognize the NFT (its token ID, metadata, and/or “smart contract” terms programmed into it) and supply rewards such as property in a virtual world, participation in an exclusive community or event, or use of the NFT as collateral for a loan. The more valuable the NFTs, the more likely others will want to entice the NFTs’ owners – who are presumably good consumers – to use their services.

NFTs have several use cases, whether anticipated by creators or added later. The usability of NFTs might increase with new initiatives such as fractional ownership of NFTs and modular NFTs.

NFTs for Newsletters

What if Substack publishers created NFTs related to their newsletters?

There are prerequisites to minting NFTs: typically a cryptocurrency wallet, some cryptocurrency, and basic understanding of the process. Some NFT markets such as OpenSea and Hic Et Nunc have set up a relatively inexpensive and easy process. (I've used OpenSea's process; it allows changes to an NFT prior to sale or optional freezing of metadata.)

Many NFTs are based on images. Kyle Chayka, creator of the Substack newsletter Dirt, had a notable success selling Dirt NFT GIFs and has followed up with more NFTs. Several other Substack creators, including 42, Li Jin, and John Hamilton Farr, have based NFTs on images from their newsletters. (You can search for “Substack” on OpenSea to find additional Substack-related NFTs.)

NFTs may also be based on text. Anonymous writer crypto.leibniz created NFTs from portions of a Substack post. Jack Dorsey, co-founder of Twitter, sold an NFT of the first tweet. New York Times writer Kevin Roose based an NFT on one of his articles. Some authors and publishers are selling books as NFTs. Loot, discussed below, is essentially words bundled into NFTs.

I’ve minted an NFT for this newsletter – represented by its logo – as an example.

The Sub Pub Logo

A fan or investor – or someone else who could benefit – might buy an NFT of newsletter content. The price would likely be far less than for the first tweet ($2.9 million), but still something, as long as there is a buyer!

The market for NFTs is evolving and can fluctuate significantly. We won't know what the market for newsletter-based NFTs might be unless we create one.

A fan might be proud of a kind of ownership of a newsletter or content in it, or a connection to the creator, and might show the NFT and associated content to other people on the internet. As Joan Westenberg recently suggested, NFTs represent support by fans for creators who make meaningful content.

An investor might hope the NFT would appreciate in value as the creator or content becomes more well-known.

The NFT could yield additional utility or enjoyment. For example, the NFT could be useful in an online game, or allow a fan to obtain a perk from the creator (such as a shoutout, a private chat, or special content).

NFTs of Words and Numbers

Other possibilities for NFTs may be derived from Loot.

Loot: NFTs made of words

Loot is a collection of several thousand text-based NFTs. A Loot NFT (or “Loot bag”) is a list of words or phrases in eight categories. For example, a Loot bag might contain “Quarterstaff” as a weapon, “Linen Robe” as chest armor, and so on for the other categories:

Bag #2491

The composition of each Loot bag is public – though use is limited in some ways to its owner. Accordingly, Loot bags and items have become the basis for games, art, maps, and even communities.

The Loot collection is called “Loot (for Adventurers).” The name suggests a limitation: it's a set of items for an adventure game like Dungeons & Dragons. What if you’re not interested in items for adventurers? Or what if you don't like the categories? And why eight categories? What if eight isn't enough?

Answers may be found among various uses, tools, derivatives, and other resources that expand upon Loot. These include NFTs with other categories and text, which could facilitate new ways of using Loot.

The n project: NFTs of numbers from 0 to 14

Taking inspiration from Loot, the n project is a collection of NFTs listing eight integers in the range from 0 to 14.

The n project is more abstract than Loot. Its numbers could stand for any set – or eight sets – of 15 things, or more if you were to add or multiply the numbers.

The n project also has limitations, most obviously that the highest possible number on the list is 14. Also, some people might be less intrigued by numbers than by adventure items.

Stackloot

NFTs of words (not just for adventurers)

Substack creators typically create with words. Accordingly, I've come up with the term “Stackloot” to mean NFTs based on words, either in arbitrary categories or in specific categories related to a newsletter or post.

The creator – or group of creators, or newsletter community – would decide the categories and words/phrases for each category. The words for each Stackloot bag could be chosen either randomly or not. (Non-randomness in Loot and the n project resulted in rarity for certain items.)

As an example of Stackloot – not just for my newsletter’s community but potentially for anyone to use and enjoy – here’s a bag of words in the categories of animal, plant, object, planet, occupation, hobby, food, and beverage. You might, for example, create a strange story from these words.

Stackloot #1

If there's enough interest, I'll make a collection of NFTs with words in the same categories. I could also make other collections, whether general or specific to my newsletter. You might create your own categories and collections.

I'd suggest not using trademarks or people's names without permission, unless you are knowledgeable about an exception in IP law. A corporation or person might object to use of their name for purposes they don't want. (Sorry, you probably can't replicate Pokémon games via Stackloot.)

Anyone could create Stackloot. But newsletter creators would likely have advantages. They’re presumably very good with words in general and on their topics specifically. Creators should know which words, phrases, and categories might appeal to the communities for whom they create.

As with Loot, a creator might get notice for a set of words and phrases that a community likes and wants to use. Games are a possibility. Real estate gave rise to Monopoly; fantasy to Dungeons & Dragons… Perhaps there's a good game or simulation to be made for your topic.

Interesting topics, intriguing sets of words, and rare words might create more value. In other words, people might find certain words or sets of words aesthetically pleasing, enjoyable to “own” and discuss, fun to play with, useful in a community, etc. Clever adaptations, as seen with Loot, might show that the words are useful beyond their obvious meanings.

Twiloot

NFTs of 8-bit numbers, for adaptability

The n project suggests that numbers can yield more adaptable NFTs. Numbers can potentially stand for and be used for anything: categories, items, properties, etc. Technically, any word could also stand for anything. But the flexibility of numbers is more immediately obvious. Also, numbers can be easily transformed into other numbers or used for different things as needed.

The eight binary numbers in the “loot bag” below are each eight bits (either 0 or 1) aka one byte. The numbers are random, in the range from 00000000 to 11111111 (0 to 255) inclusive.

Twiloot #1

This set of numbers would fit nicely in a tweet. (Or in a short Substack post.) And they’re related to powers of two.

Notice the “tw” in both “tweet” and “two.” Thus I'm calling this project “Twiloot.”

Because Twiloot is based on numbers rather than words, it’s not especially related to newsletters. But I figure that other Substack writers and readers might, as I do, enjoy considering how numbers can relate to components of newsletters – words, images, sounds, etc. – and other digital works.

I've minted 2^4 (16) Twiloot bags to start with. I’m keeping one and offering 15 (starting with Twiloot #2). If they sell well, I'll go up to a total of 2^8 (256) bags – and if interest remains high, up to 2^12 (4096) or even 2^16 (65536). That should result in enough users for a community that application developers will notice and want to attract. (To get to 65536, I'd need to automate the creation of Twiloot. Whether manual or automated, I'll ensure quality control. If any bag is flawed, I'll replace it for free.)

I'm getting the numbers for Twiloot bags from the true random number generator RANDOM.ORG. In the NFT’s image and its metadata (the Properties section on OpenSea), the numbers are listed in binary (base-2) form and the equivalent decimal (base-10) form.

Any one of 2^64 permutations of binary or decimal numbers could appear in a Twiloot bag. To get other numbers, one could add, multiply, divide, subtract, or otherwise manipulate Twiloot numbers.

What would determine the value of one Twiloot bag relative to another? Maybe a 255 (11111111 in binary) will be most prized. Or 00000000. Maybe the same number twice. Or prime numbers. Or favorite or lucky numbers.

As computers demonstrate, with binary numbers (bits and bytes), anything is possible. Games, generative images, music, seeds for virtual worlds… For example, the numbers could be used for colors, styles, and other features of distinctive art works – potentially increasing the value of the NFT or serving as the basis for other NFTs!

Swiper, No Swiping!

Regarding an NFT of a newsletter or its content – as far as I'm aware, another person can't legitimately create or authorize an NFT of your content. Only you can. Otherwise, anyone could mint and sell an NFT of anything!

I've described why newsletter creators would have advantages in creating word-based NFTs (Stackloot). A copycat wouldn't know the topic or community as well. The community would presumably prefer the originator to the copycat.

Regarding number-based NFTs: I plan to keep control over Twiloot (which, as I noted, isn’t particularly Substack-related). The creators of Loot and the n project have apparently done the same with their NFTs. Otherwise there's a danger of NFTs with inconsistent or conflicting metadata or provisions, making the NFTs useless or less useful. Of course, there are other possible number-based NFTs. I've got a couple in mind myself (which you can steal if you can read my mind before I publish the ideas 😉).

I suppose that each creator will benefit mainly from his or her own NFTs, and audiences from buying and obtaining value from them. But maybe we can generate some benefits for other Substack creators and subscribers, especially if they provide help such as good uses for or feedback about the NFTs. I've got a few ideas. But I'd like to hear first what you think.


I welcome your thoughts and ideas regarding NFTs and this post.

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