NFTs are making rapid advancements in the cryptic space as people use loads of money to buy a GIF, artwork, videos, etc. Everyone would be aware of news such as 'XYZ bought a GIF of a flying cat for $Y Million.' In this process, the ownership rights for the GIF go from one entity to another using NFT or non-fungible tokens. An NFT will register an entry into a ledger, run on some blockchain, and help eliminate the mediators as the transfer of ownership is recorded in an immutable structure (called blockchain).
To people who do not know, NFTs or Non-Fungible Tokens are the digital assets that represent real-world collectibles recorded in smart contracts. A smart contract is a piece of code stored on a blockchain that executes after meeting certain conditions. NFTs are such a revolutionary technology that enables creators to sell tiny bits of content (fractional NFTs) without any middlemen and retain a certain level of control on how this content is being used and monetized.
Content and Content
Content is everywhere. Content is a new song by your favorite singer, code an engineer added to an open-source project, or the WhatsApp message you sent to your friend. However, not all the content is valuable. While we can potentially turn a song into an NFT, the code lines or WhatsApp messages are not a work of art. Therefore, it would be pointless to turn them into an NFT.
Consider an analogy; most humans are either overpaid or underpaid for their work. While one employee contributes more than the other to the company's overall success, they both take home the same salary.
Have you ever wondered why two employees earn the same salary?
Because it is difficult to keep track of each person's specific contributions. Even if we devise a way to keep track of contributions, it is not practical to compensate each person for every idea. Now consider the same scenario on a much bigger scale. Every thought, project, and workpiece comprises smaller pieces that other people created. It is infeasible to track these ideas' provenance or compensate their originators for their use in an instance.
How would the world look if we could keep track of each person's contribution and automatically pay them each time it is valid?
How can we track individual compensation?
The industries with high awareness of intellectual rights can witness a primitive version of this scenario. The music industry is one such example where multiple people are eligible for royalties — the singer, the lyricist, the bass player, the producer, the composer, and more. The contributors will also receive compensation if the song contains their sample. However, keeping track of a person, amount, and when to pay royalties is not practical even in the music industry.
In modern times, the software we use is the work of thousands of people, including entrepreneurs, employees, volunteers, and members of open source communities. As each code has a specific function in the software, monitoring each person's contribution to a project becomes easy.
Do we have the technology to escalate the process?
NFTs and smart contracts open up a way to integrate the above scenarios with a proper compensation mechanism. It gets easy to add every person's contribution according to the work done. Each time someone uses the code, or song, the concerned people will earn royalties; the contributors even get a chance to make a proportional piece of the acquisition price if the code is part of a big startup exit.
Final Thoughts
Technological advancements enable us to keep track of every person's economic contribution at a granular level. It helps compensate each person for that contribution and all instances in which it is useful. If we start compensating each person for their exact contribution, we would not have to pay everyone the same salary. And if that happens, the exceptionally productive or innovative will get paid more than ever.