Speaker 1  0:00  
Good afternoon and welcome to today's spotlight session webinar, blockchain and FTS and universities how to navigate and monetize presented by Autumn. My name is Sammy Spiegel, autumns Professional Development Manager, and I will be your staff host for today. We're continuing the great discussion started at our autumn annual meeting in New Orleans with a new online opportunity autom spotlight sessions. During today's session, you'll watch a popular panel recorded at the annual meeting then participate live with our panelists for dynamic question and answer session. All lines have been muted to ensure high quality audio and today's session is being recorded. If you have a question for our panelists, we encourage you to use the q&a feature on your zoom toolbar. If you have a technical question or a comment, please feel free to use the chat. Should you need closed captioning during today's session zoom closed captioning features turned on and available on your toolbar. Before we begin, I would like to take a moment to acknowledge and thank autumns online professional development sponsors, Marshall Gerstein, IP and the Michelson Institute for intellectual property. We appreciate your ongoing support. I now have the opportunity and pleasure of introducing you to our spotlight session presenters. We're joined by two of the three presenters today. But I'll introduce all three since you know that they will all be presenting during the recording. Mike Cohen is the director of innovation ecosystem development at University of California Berkeley. Charlie Macedo, a partner with AMSI, Rothstein, and Ebenstein LLP is a physicist by training and helps universities research institutions, public and private companies and individuals in all areas of IP law. And Patrick McLaren is the Chief Operating Officer of nifty gateway, which was founded with a simple mission to make NF T's accessible to everyone. Welcome, Charlie and Patrick, and thanks to Mike as well for the content that he's presenting. I will now launch the presentation that was delivered at the autumn annual meeting in New Orleans attendees. Please submit your questions for our panelists throughout the presentation. And we will get to those When the presentation concludes. And now I'm going to switch the screenshare and make sure that this works. If you can't hear the audio when I start just throw that in the chat and we'll get we'll get that solved right right away.

Speaker 2  2:29  
Blockchain and and we're going to give you a little bit of an explanation about NF t. So our agenda is NF T's in the blockchain and a little bit of the metaverse since that's become much more important. We're going to talk about where I can monetize my NF Ts. We're going to talk about UC Berkeley's experience with NF Ts. And then we're going to talk about whatever else comes up, and we will have plenty of time for questions at the end. So I'm going to begin by just what are NF T's and blockchain technology. And I'm going to do it with lots of pictures and hopefully very few written words. Just because I can, although I'm going to violate that with the very first slide, which is starting off with what is a non fungible token. And this comes from crypto pedia, which is one of my favorite sources. Patrick, do you know I want to Gemini. Gemini is the owner and affiliate of nifty gateway. And they provide a tremendous amount of information and crypto pedia about all things blockchain and it is an ever growing list. And here you can see their summary of what a non fungible token is, and they call it a cryptocurrency token that's indivisible and unique. One NFT cannot be interchanged with another NFT. And the whole cannot be broken down into smaller parts and us and T's offer a myriad of options of creating and trading digital assets such as original artwork and blockchain integrated collectible games like crypto kitties. And if T's are useful for proving the scarcity and prevalence of rare assets, and both digital and in the real world and non fungible tokens are mainly built upon the Ethereum using ERC 721 token standard, I would say that it's probably expanded a little bit now. So there are other blockchains that are involved, but that is certainly the route that we're in FTS are in case you didn't follow all that. That's where the pictures come in. We're going to look break it down and make it easy to follow. Etherium the Etherium is a blockchain it is a blockchain that was developed after Bitcoin I would say probably it is the number two traded blockchain in terms of the basic tokens but it really was Bitcoin two point out, and the reason why I say it was Bitcoin 2.0 was because the Ethereum blockchain provided what's known as smart contracts. And here you can see on ether scan.io, an example of where there's a picture of smart contract information. And in the blockchain, you have the underlying blockchain, which is Aetherium. And then you have tokens that are built on the blockchain using smart contracts. Those smart contracts are technological software code that govern the provenance of those tokens. And it's important that you understand that because that is sort of at the heart of non fungible tokens, which are a token they're based on smart contracts written on top of another chain. Like I said, Ethereum is the main one. There are other ones. I'm sure Patrick, you probably talked about Solana, other, some other ones in there. But 80%, of what you're doing in terms of non fungible tokens, or tokens is built on top of the Etherion. Blockchain. They're fungible. So what does that mean? If I have $1 Bill, and you have $1 bill, and we trade those dollar bills, we both have $1. Bill, right? That's fungible, one is as good as another. But if I have an original Van Gogh painting on the wall, and you have a different original Van Gogh painting on the wall, they're not necessarily fungible, right, because each one has its unique intrinsic value, mine may be worth more, yours may be worth less on it. And that is a fundamental feature of what we're talking about with non fungible tokens. There's something where each one is unique. And even when you have a non fungible token, which may be one of five non fungible tokens. They're still unique, just like those prints that you may have gotten from a famous artists, where it's 1052, or five, three, or five, four, or five, and five, and five, each one is unique, there could be a greater value to having one or five, than there is to having three or five or five of five. And if there's a second series of identical tokens made, and it's the second series with six of 12, there still could be a greater value from having it from the first series than from having it from the second series. So just like in traditional artwork, whatever you would go by a Christie's or Sotheby's that fungibility or non fungibility, that uniqueness of quality, which is all in the eye of the beholder, maybe exists in non fungible tokens. And right now, I'm talking about non fungible tokens in the context of art, but I will talk about other applications down the road. So one of the points that was made is non fungible tokens are not divisible. So when you get a Bitcoin, one bitcoin is worth I don't know, it was 50,000. Now it's probably 20,000, maybe 30,000. It depends tomorrow, it'll be worth 5000 or less or whatever. It's volatility nightmare. But you can you can break Bitcoin down to 10 to the minus eight Bitcoins, a Satoshi named after Satoshi Nakamoto, the the pseudonym of the great inventor of Bitcoin. $1 bill can be broken down into pennies, right. So if I have $1 Bill, I don't rip it into pieces, but I can have quarters and nickels and dimes and pennies and 50 cent pieces with them. A non fungible token is not divisible. It is one token, that token has whatever purpose or utility or or desirability you want put behind it, and it is worth one token. This is a fundamental difference between non fungible tokens as currently implemented, and the typical tokens or cryptocurrency that you may otherwise be dealing with where that can be broken down. So when I originally made this presentation, I thought of NF T's as collectibles and that certainly were Patrick's business lies isn't a collectible concept. This is one of the earliest and most popular use cases of using NF Ts. And you know, I thought of it like the trading cards that we used to play with and get with the bubble gum. You know, that's still bubblegum which you know, was probably like 10 years old, but you had a great trading card. You may have a baseball player on it, you may have a pokey mod on it or whatever. Or it could be the fake earrings and my fingering is more valuable than your figurine or your figurines more valuable than my figurine, but the value of the collectible was based on the eye of the beholder. The cost of making a Willie Mays trading card was maybe a penny or a fraction of a penny. But the value of that if you had a first edition Willie Mays trading card from a year where he won the World Series, maybe worth 100,000 or 20,000, or 2000, or whatever it may be, not because there's an intrinsic value to the paper and the ink of the Willie Mays card, but because there is a value in the eye of the beholder, to having a Willie Mays card, and that is for Patrick's business. One non fungible token based business is about is there, an eye of the beholder collectible view of what that non fungible token is worth? Fungible, we have fungible tokens and coins, and we have non fungible tokens and coins in the crypto space. I gave you the dollar bill, for example, versus a piece of paper, right? Well, in terms of fungible coins, Bitcoin and Aetherium are examples of fungible coins. If I have one Bitcoin and you have one Bitcoin, and we trade them, they're still worth one Bitcoin, even though that value may change every day. It's the same value whether I hold it or you hold it. But for non fungible tokens, it's an eye of the beholder Type value. And I like to go to crypto kitties, because crypto kitties was probably the first valuable use case, right. And I went to a conference once, which was Cornell's blockchain conference. And sitting in the audience was Austin, who's Austin. Austin's, the guy who came up with crypto kitties. And I was trying to convince a bunch of software crypto geeks on the value of IP. And I said, as this thing, how many people here think patents are good?

Speaker 2  12:27  
Oh, yes. Yuck. Terrible. We believe in open source. We believe that everyone should have everything for free. Everything's wonderful. Then I said, How many of you like crypto kitties. Yay. It's wonderful. It's great. I love it. Crypto kitties, by the way, are little digital images of kittens, like you can see, which has some pretty cool technology that I'll come back and talk about, but you can breed them. So if I have the yellow crypto kitty and you have green crypto kitty, I can end up with a yellow and green striped crypto kitty by breeding it all using, you know, computer science. But I said you guys think what Austin did is cool. Right? And they're like, absolutely. And do you think that Austin should be able to profit from the ability to have crypto kitties out there? Absolutely. So you think it would be all right for Austin to be able to monetize and make money and protect and and develop what he did with crypto kitties? Absolutely. That's what patterns are. And all of a sudden, they're like, maybe that's not so bad, because they saw it in a pragmatic real world space. Right. The fungibility of Bitcoin versus the non fungibility of crypto kitties, was the first use case of non fungible tokens. And they brought to it using the smart contract cool features. So what are the benefits and risks of using NF T's? Right? You know, is it all good? Or is there bad and what happens on that, and we're gonna have a wonderful debate later between these two gentlemen, on this topic, particularly in the collectible space. biggest benefit, blockchain technology is secure. It uses the same type of encryption, the private key public key encryption that you use to keep track of your money at whatever bank you deal with. Because of that secure benefit. You have a secure a very high level of security and trust that if you have your private key to access the public address that is associated with your crypto, Kitty or your non fungible token Again, it is yours. And what you do is yours. biggest, strongest, most important benefit, right? It is easy to verify, particularly if they're an Aetherium based token, you go to ether scan.io, you type in crypto kitties on top, and I see all the transactions that occurred, I can see the blockchain address that it was purchased from and that was transferred to, if they attack, if they did a specific method, you can see that they did it with the atomic match, versus a bid versus deposit. Crypto kitties are telling you exactly all this wonderful information about it. They tell you, it's a non fungible token. So what do you need a token ID? Because you have to know that that's your token versus someone else's token, in contrast to Bitcoin, right? So it gives you all that information. And you can click on anything that you see in blue, and drill down and learn about it. And you can do it in real time. And you can see right now, who's buying what, and you can see where what the province was, where did that come from? When was it generated? Who bought it, who sold it next, who sold it after that. And the smart contract also has contract instructions. So here we see there are contract instructions. And you know, it has standard things like total supply, how many crypto kitties Will we allow there to be right there, but it also has the ability to create, and to breed. I don't know if I have the breed one in here. But you can put in new innovative, smart contract, programming, and develop cool and different technology using non fungible tokens which by the way you can do with regular tokens to fungible tokens. But that that technology that you put in there can become rules of governance that are self enforcing, and don't require a court of law to do it just requires the magic of the blockchain to do it. And so that's a different province than where we are now. Because right now, if I had a piece of artwork, and I sold it subject to some rule of law on it, I'd have a terrible time enforcing that the fourth time and sold. But if I have a smart contract with a token, and I build into it, that doesn't exist unless and in accordance with the rules that I build those rules stick with it forever. And ever. And people see what the rules are, and they know what they are, they're on notice. All those things we used to argue about in the court of law, when we were doing things and paper and pencil or even when we were transferring desks are now suddenly have this greater level of protection that does not require unfortunately, people like me that were that had members of the bar, but allows us to develop unique strategies. One of the other things is it's really hard to destroy. The only person who can destroy it is the person who has the keys to the kingdom, the private key to generating crypto kitties, they may have a god mode, they may not have a god mode. And and it will be there forever. And when Bitcoin when we started working Bitcoin back in 2013, one of the most common thing is is the precursor of smart contracts was messages. Just like in Twitter, you could do 144 characters and send the message. But But Twitter could take down the messages if they were inappropriate. You didn't get to take down the messages that went on the blockchain. So a lot of times, what people would do is they would send to the federal government's address, some Bitcoins that they confiscated one Satoshi, which at the time was worth 10 to the minus a times maybe 100 bucks. And they would use an explicative with it, usually followed by FBI or federal government or something like that. And those words remained on the blockchain forever, and they couldn't be taken down. And so the one of the great benefits, but it's also one of the great detriments is once it's done, it's done. And it's hard to undo. So that's an important part of non fungible tokens and blockchain technology. And here we see the example that I've been referring to where they are breeding. So the crypto kitty website actually created a marketplace. And just like you might start your horse You could stun your crypto kitty, and you can offer to breed for some sum of money your crypto kitty with their crypto kitty, and make a new crypto kitty. And, and it just shows the innovation that occurs. As universities, you can bring your art students with your computer students together to develop cool new projects. Right? The whole multimedia aspects of of which you never got to monetize as tech transfer offices. Here's one of my favorite, and our law clerk put this together. So I promise you no violation of copyright laws. In a traditional model, when I had a painting, the artists would paint the painting, the artists would sell the painting to the first buyer. And the artists may retain rights in the image and stuff, but that painting is gone. And if the artist sold it for $10, and the next one sold it for a million, and the next one sold it for 20 million, and the next one sold it for 100 million, the artist got $10. Alright. So in the NFT space, there's this new business model. And under the new business model, they want pay it back. So every time the digital non fungible token of some artwork is being sold, there is a logical and moral promise. There's like a moral promise that you will pay back some percentage of the revenue to the original artists. Let's fast forward using smart contract technology, that more promise could potentially be a technologically enforced contract. Right? Using technology to say every time there is a transfer of token 5943 on the crypto kitty chain, that they're that a portion of the economic value associated with that transfer gets transferred back. Of course, it requires that there has to be

Speaker 2  22:20  
something done on the smart contract to track the payment or to allow the payment to occur. But how that technology develops, how it gets implemented, whether they do this business model or some other business model, all that can be done using technology. years ago, there was a case called register.com. And in registered.com, there was a huge problem. Every time people would try and registered the domain name, it would be available on the intranet, and registered.com would have robots come crawl the intranet steal all the data and and then they would lose a valuable asset of all that data. So they brought a lawsuit, they came up with a very creative theory, trespass to chattel, just like when they used to steal with cattle and or they would, you know, do something to that back in the 1800s. And they said when you come to my server, and you start mining my data on my server, you are taking trespassing my channel my server by stealing just an infantile small amount of data processing time. And therefore I have a tort. Very clever theory, wonderful legal theory cost your millions of dollars to get to the end result of someone stealing. What did we do today? We put CAPTCHA on, we use technology instead of having to rely upon the legal framework to achieve the same result of blocking robots from mining databases online. That's what smart contracts give you. They give you the capture solution to online technology issues. There also are ready and existing markets and marketplaces for these things as well as non markets. Just because you have an NFT doesn't mean anyone wants it. I can paint a painting doesn't mean I'll get the same amount of money that people gets when he paints a painting. Okay. But there are places where if people want it, I can do that. Patrick is going to tell us a little bit about marketplaces. But you know, this was a little dated Patrick but I thought you'd appreciate that this was when they were asking 7,777,000 for one of your NF T's live the dream What's the biggest difference between an NF t as it exists today, and a painting you can hang in your wall? Well, a painting that I can hang in on the wall is in a room, that room, I can let anyone come into like the museum. Or I could let no one come into like my private home. As the owner, and physical possessor of that painting, I can restrict access to who can see it, and when they can see it, and how much they get to see and what they can do if they're in the room. Right, you know, I went to the loo rode by saw Mona Lisa, no flash photography, right, they could restrict us on what we could do on that stuff. That doesn't really exist with non fungible tokens. I think technology will come at some point that will do that. But today, it doesn't. And one of the debates these gentlemen will have will be about the fact that people can just steal the underlying NFT, potentially, depending upon how you possess it, and you present it in terms of the image that is presented on there. copyright and trademark law apply to non fungible tokens the same way they apply to any other digital image on the internet. Remember, when we're talking about non fungible tokens, we're often talking about whether it's a steal, or movie, or an audio, video, or song, or some other digital media that's out there. You know, Patrick, and I spend time where they had a variety of NF T's that made Fair Use of people's images. And whether or not people liked those images, and what the fair use supplied was the same type of legal analysis that you would otherwise have if you posted it on your university website. Right? If you start using people's trademarks, you can have issues with trademarks if you start selling. Or the apes called board IPs, more names. Yeah, board apes, if you start selling your own board, apes, you're going to start having trademark issues or copyright issues that may or may not be resolved by authority or lack of authority in doing that. So everything that you've done whenever you were dealing with electronic files on the internet applies, except what's the big difference? You can take down from your website and image but you can't take down from the blockchain? Right? It gets much, much harder. Although there are creative solutions that Patrick and I have dealt with over the years. When we originally did this lecture, we were thinking about it in terms of artwork. But maybe some of you have heard of a company that used to be called Facebook, just like the artist formerly known as Prince, right? What are they called? Now? They're called meta why are they called meta? Because they are trying to be part of the virtual worlds that are going to be created. And there's a major battle occurring in what will be a or the metaverse as to who gets to own it, and who gets to monetize what's in it. And that battle. If you believe in a decentralized version, or an interoperability version, will be fought using non fungible tokens. So non fungible tokens will be used to have your avatar what you appear as in that Metaverse it with the buildings and the objects, the fashion accessories, the goods and services, the tickets to attend the marshmallow concerts. And all of that stuff will be using non fungible tokens and why are non fungible tokens really, really good for that purpose? Because they are secure, they are reliable, they are easy to verify. All of the wonderful things that you want in a database exists with non fungible tokens. And in contrast to Bitcoin and ether, they're non fungible. So my avatar is my avatar. Your avatar is your avatar, and the province is verified using Blockchain technology. So this is a lecture you're going to get a different time on the metaverse but this is a precursor that while we're discussing collectibles and art and objects and and putting digital images on there, that's not even version 1.0. That's version point one. Non fungible tokens and block chain technology. The real game will be fought in the metaverse and how NF T's will be used. And one of the things that you're going to be challenged is how your organization's and your professors and your stakeholders and your inventors and your schools are going to participate in the metaverse innovate in the metaverse and transpose what occurs in the metaverse with what occurs in the real world. When you buy the Nike shoes in the metaverse, will you get the Nike shoes delivered to your house? Right? We have no idea. Just like in 2008, I attended a conference where the speaker said, we're all immigrants to the internet. We haven't even gotten a passport yet to immigrate into the metaverse. But our kids kids, they're going to be natives. And they're going to have a whole different life than that. So the last thing I want to say is, Where can I monetize my NF Ts. And I use this as a lead in just because I wanted to point out, he's here. And he's going to tell you all about what they do and how they do it and why they're doing it. And Patrick, is with nifty gateway, which is owned by Gemini is one of the Winklevoss related entities. And they were, I'd say one of the early leaders on collectibles in the space using non fungible tokens. And their mission at infancy, was really democratizing it and making it so anyone could easily generate an access artwork as a non fungible token. And they've done pretty well, particularly last year was a good year. So at this point, I'm going to hand over to Patrick. And when Patrick's done, we'll let Michael talk about Berkeley's experience. And then we're going to open up for lots of questions at that point. Okay. So anyhow, at this point, I'll hand over to Patrick and Patrick, Monnet.

Speaker 3  32:24  
Thank you, Charlie. So yeah, like you said, I'm Patrick McLaren. I work for a company called nifty gateway. Nifty gateway is an NFT marketplace, generalized NFT marketplace. But as Charlie said, we're our main focus is on art and collectibles. big reason is because that's where the demand is that right now I'm at the end of the day, we're probably going to sell NF T NF T's that are popular. So today, I'm going to talk to you a little bit about how you can monetize NF T's. I think that's a big question of that sort of the headline grabbing question for everybody, right? Everyone sees multimillion dollar NF T sales and says What the heck is going on? Well, I want to talk to you a little bit about what is going on. So my agenda real quick, I'm going to talk a little bit about buyer and seller motivations. I think that's really important. why someone would buy an NF T or why someone would sell an NF T is an important part of monetizing, and Charlie touched on some of the points, I think some of the reasons that NF T's are useful. So I'll touch on them as well, but probably go a little quicker. I'll talk about venues that you can sell your NF T's. I'll give a brief market outlook, and then we'll think forward with some of the innovations that Charlie mentioned earlier. So yeah, the big question, the biggest question here is, Why buy an NF t? Of course, you can't sell something no one's going to buy. So it's important to answer this question first. Charlie touched on a couple of these. So utility is one there's an obvious use case for it. Patronage is another I think that's really important. Patronage meaning I want to support my favorite creators. That's why websites like Patreon exist. And traditionally, it's been actually really challenging to monetize, especially digital media. Especially from an ownership perspective, digital artists in particular, have had a lot of challenges doing that over the years it only a couple years ago, you couldn't actually sell a digital photo the same way you can today. So NF T's provided an efficiency. There are other reasons maybe you're into collections, maybe you're into collectibles, much like Pokemon cards or baseball cards. You might buy an NF t because it represents provenance and authenticity, either have a digital good, or have a visual of a physical good. So there's, I can tell you, I'm having a lot of conversations with especially people who sell very expensive physical goods about using NF T's to represent ownership for those physical goods. They also you might buy an NF T for access, like Charlie mentioned, either to events or to online communities, you might buy it for visual enjoyment. That's actually my primary motivation. I really like art. I've always been a really big fan of digital art. I've been looking at digital art for you know, 2020 plus years. It's always really interested me to be able to display it on my wall. Do To know that I own it, and to know that I'm supporting the person who's making it is really important. To me at least the last point, I think social value and community are really important. social value, you can almost say is like, one aspect of it is bragging rights. But there's also I think, an actual, you know, social importance for art in particular, and for many different collectibles. And then the aspect of community, I would actually say social value and community are two of the biggest drivers of the recent NFT. Boom. There are large communities, mostly digital communities, but also in person around NFT projects. I actually I put up here, awkward astronaut number 9259. This is one of my NF T's. This is a unique, like Charlie mentioned before, this would be maybe an avatar. This is one of my favorite ones. I know that I have this as my profile picture on Twitter, which now verifies nfts. Just pretty cool. I know that other people who have awkward astronauts will have a certain camaraderie. There's an online space for us to talk. There's a Twitter, Twitter threads that we can all work in. And you know, I have like an emotional attachment to this thing that is so specifically mine. I think it's quick, it's a good idea to pause real quick and just talk about why art and collectibles are valuable. In general, Charlie mentioned a couple of the reasons. But I think the biggest values, the biggest drivers are social value and the cultural significance. So this is I'm talking like all time, right? For 1000s of years, people have purchased art made art. And I think one of the main drivers of value is that cultural significance, what it's saying about the current moment, what is saying about culture, but what it means to the individual who owns it. And I think a really key component is that physical inputs do not necessarily equal the monetary outputs. At the end of the day, the Mona Lisa is really just some colored dirt on a piece of paper. I don't know no offense standing looking like it's a great, it's a great painting, of course, but it doesn't mean that it's only worth what we've put into it. It's all based on this sort of social value. Also, art has for a long time been artificially scarce. Anybody who is involved with the art world knows that supply is generally constrained to protect value for artists, this the same thing applies for NF T's. And then another question, which I think we're going to talk a lot about today is does exclusive use provide a tangible value? So this idea that other people can view it? Does that actually reduce the value? I would argue in many cases now, but I also think that it's a matter of personal opinion. Some people don't actually care whether or not other people can see the thing that they own. Some people really do. And I think it's a question of, okay, is this going to be shown in a museum or gallery? Can I have a perfect print digital replica, even down to the brushstrokes you can make replicas of certain paintings, that doesn't necessarily make it as valuable as the original painting? And it doesn't necessarily diminish the value if it can be replicated. Patrick,

Speaker 2  37:53  
if you can just explain for a minute about the interplanetary system and why we're saying it's not unique, even though it's on a blockchain.

Speaker 3  38:04  
Yeah, sure. So actually, I have said a little bit about that. But there are ways to essentially verify via third parties, and images authenticity. And not only that, but there are infrastructure solutions being developed now. And in the future, that will make sure that even if the creator of the the asset goes away, even if it is hosted on a private server, there are backups, there are sort of community controlled backups to these images. That's what Charlie was referencing with IPFS. I'll go into a little bit later. Also want to talk a little bit about hype driven markets. I think I know Mike's going to talk about this a little bit as well. I would say that this is a non scientific term, to be sure. But I think it's important to recognize that, you know, this is not a new concept whatsoever. Many markets have been driven by sort of social value and, quote, unquote, hype. A great example, I think, is streetwear. I didn't actually forget the image. I just knew Charlie would kill me if actually, but supremum logo on this slide. But as you will know, you know, there are companies like supreme or making street wear, and you might pay $1,000 for a pair of socks just because it has that logo on it. So I think the question that we're looking at here is, what is valuable to people and why, at the end of the day, if someone will pay $1,000 for a pair of shoe cream socks, and they will. It's worth $1,000, at least to some people. traditional art I think is very similar traditional collectibles are very similar. Big Question is, well, how sustainable is something like this? Can I resell my $1,000 pair of socks? Maybe not? It's again, it's a question of whether or not the market exists. I would I would argue it's on a case by case basis. Beanie Babies not that valuable anymore. But a baseball card from 1995 could still be very, very valuable. A painting could go up The value or the artists could, you know fade away and not be significant anymore and the painting loses its value. So I would say, you know, value whether or not something is overvalued is an individual opinion. I'll go through this relatively quickly. But one of the reasons why someone might buy an NF T is for utility. Charlie touched on a couple of these points, digital identity is a big one, access is a big one and get into events, you could potentially use it NFT as a proof of attendance poll app, you can Google it later, if you're interested in happy to answer some questions as well. But conceivably autumn could say, hey, everyone who went to this conference gets an NF t that verifies that they were physically there. It allows for a deeper level of engagement with the people who are running the event, I can see hey, this person has all five, we can call them badges from going to the last few and Autumn might send them a special commemorative NFT. Or, you know, it's just a fond memory that you have a souvenir, if you will, you can use NF T's and games online spaces, you can use them to get into events, you can use them for display as I do, you can even use them as financial collateral the same way that you can use traditional art as a collateral to get a loan, I would argue it's a lot easier because art is very tough to store, generally speaking, and very tough to move around. You don't have to worry about the physical logistics if you're using NF T's for financial collateral authenticity and provenance is another big reason why somebody might buy an NF T. It has that distributed authenticity on the blockchain, you can have image verification with IPFS. And there's even start starting to be blockchain native image storage, which is really cool. A lot of people talk about okay, with NF Ts. Oftentimes, the image associated with NF t, if it's an image based collectible, is stored on some sort of centralized server. As we're seeing computing costs go down, as we're seeing blockchains become more efficient, it's becoming increasingly viable to either store the image on the blockchain itself, or generate the Image via smart contract. Which is kind of the next point here. And if keys are also dynamic, they can change based on external variables. Charlie mentioned this a fair bit. Because they are at the end of the day pieces of code. And because they're interacting with a digital ecosystem, the NF T's themselves do not necessarily have to be static, either as an image or as a product of their actual functionality. A funny example, we did a project called merge recently with digital artists POC, the merge project and ended up actually selling $92 million worth of NF T's which is a pretty big sale, what the merge project was, and it's almost challenging to explain, but it basically everyone who bought the merge project received what we call what's called a unit of mass, the unit of mass was represented as an image of a circle in the middle of a square. Basically, as you acquire more units of mass, you're buying these unique tokens from other people, what happens is the NF T's are actually combined into one. So if I have maybe three units of mass, and I buy one unit of mass from someone in this room, I would have an NF T, that's called four units of mass. And the actual image itself would change based on the number of units that you bought and the number of units that are in a specific wallet, which is just an example of the dynamic nature of NF T's. The art project, I think, did a great job of pushing forward a little bit with what NF T's can do, but also, you know, as a statement on social dynamics to a large extent. In other and other use cases and probably much more realizable gamification, the sort of variable nature of NF T's themselves lend very well to gamification. And like I said, you can have self or network generated traits based on external variables. We've created an FTS with artists and designer Daniel Arsham, that actually erode over time. Unlike a traditional piece of digital art, this INFP knows what time it is. So not only does it know what time it is, but it knows what season it is, as well. And you can see the background of the NFT change and the sculpture that's digitally represented slowly erode over time. This is really fun, because it just shows a little bit about how the smart contract based dependencies can really create something entirely unique that couldn't have been done as easily previously. The last reason someone might want to buy an NF T is for investment. I would say, if you're looking at a piece for investment, technically, you could represent a financial product with an NF T. But it's not very, it's not very common right now. For the most part, I would say it's analogous to other art and collectibles investment out there, which means that it also can be somewhat volatile and unpredictable. There's a bunch of innovations being made and how people can interact with invest in FTEs, including Dows or decentralized organizations, indexes of NF T's or basket of goods that can be shared the same way. stock indices can be shared. And then lastly, actually, NF T's can represent physical back goods. So a good example, there's a distillery in Ireland that's selling NF Ts that represent whiskey barrels. So I in the US can buy a whiskey barrel. That's right presented as an NF T. And if I want to, I can redeem that NF T for whiskey at some point. It's pretty fun. So, talk a little bit about why someone might buy an NF t. Well, why would you sell one? It's a little easier to answer that side of the question, honestly, because you want to make money, it's probably the number one reason. But besides that, it's a question of why would you use an NFT to sell something, reasons that you might use an NF T, for IP monetization, you have some IP that you want to sell, you know, probably worth noting, Disney can sell their IP pretty easily, there's a high demand for that, there's probably lower demand for any IP that I have than what Disney has, which I think Charlie mentioned as well. If your content is digitally native, if there isn't a physical version that exists, or if it just doesn't make sense to create a physical version, like if you're a digital artist, you might want to sell an NF t, if you're a brand, and you want to have some sort of social engagement, especially in an increasingly, digital social environment, and NFT can be a useful tool, you can do it for novelty purposes, simply because it's new, it's fun, it's different. A lot of people think that blockchain is fun, just in general. So it's a fun way to interact. And as Charlie mentioned, there's transferability and ease of access are really important, it's a lot easier for me to send an NF T to somebody than to send physical painting or physical goods. And then the last point, I think, cross border value transfer, this is really cool. One of the maybe the easiest way to explain it is an NFT is worth one Aetherium, regardless of where you are, if you're in Thailand, or if in the US, the NF T is worth the exact same amount. One thing that this actually creates his really cool opportunities for people from economically depressed areas. In particular, we've seen artists who were able to sell their work digitally, from areas where they wouldn't even have a market. And even if they did, it would be so much smaller, but all of a sudden, you're putting them on par with digital artists from all over the world and giving an incredible opportunity. So we know why to sell an NF? T. How do you do it? Mike's actually going to go into this in much greater depth later. And he's gonna go through the process of his NF T creation. But it's a couple of simple steps you conceptualize what you want to sell. You choose the blockchain the protocol, you choose the marketplace, probably nifty gateway. That's what I would use. You create the smart contract, and then you decide, well, am I going to sell it on a marketplace? Or am I going to do an on demand mint,

Speaker 3  47:18  
I want to take a quick pause to focus on one portion of it, which is I said, Hey, you have to choose your blockchain or your protocol. Charlie alluded to this as well. Right now, the most popular blockchain is a theory and because it is the most popular network and it has the strongest infrastructure. But there are other solutions that might be a little bit cheaper, a little bit a little bit lower computing power, a little bit easier to use. And I think we're gonna see increased adoption for either other solutions or greater efficiency with the theory of network as time goes on. You can also use what's called side chains or layer twos to reduce transaction costs. As far as protocol, Charlie mentioned, ERC 721 Earlier, that's the most common. There's also ERC 711 55, which is for sets. And then lastly, I want to talk about EIP 291, which was something that we worked on, Charlie alluded to it earlier, that's the royalty sharing protocol. If you choose to participate in this VIP, you're able to continue to get royalties, regardless of venue, which is really, really exciting. This is all to just say, there's a ton of development being made. I think this royalty sharing protocols, really official as of, you know, less than a year ago. So I'm sure that we're going to see a lot more, we're going to see a lot more innovation in the near future. When you're thinking about monetizing NF T's it's a good idea to think about what other projects are successful and why it's usually a combination of the variables that I spoke about earlier. I have here a picture of board apes Yacht Club, this is not mine, I wish these things are worth like two and $50,000 or something. But the I'm sure many of you guys have heard of this, lots of celebrities are buying them think Neymar is using board apes as his profile picture on Twitter, probably Steph Curry. I think some other people who are very famous, have purchased this, it can act as like I said before social value. And this idea of community as well as access board apes had a yacht party and a blink 182 concert in New York a few months ago that you could go to if you had a board game that was your ticket. You can use another successful project xe infinity uses in game items. So it has some sort of utility to it. Both the items and the characters in game are NF t's the merge project, which I focused on plays on social dynamics and the dynamic nature of smart contracts themselves. Nf T guilds is a very interesting use case. Very similar to what Charlie mentioned with crypto kitties where you can actually pay other people to play games for you and get those rare items and get those new NF T items. That sounds kind of crazy. But if any of you guys know the size of the gaming market, how much money people spend in game to get these rare items, or how much money people spend on mobile games. That shouldn't come as too much of a surprise to you. It's actually cool. You can have this efficiency I know especially in economically depressed areas, this is a much this is an awesome option. You can play games all day to make money, which is pretty cool. And Charlie mentioned also decentraland. The last one I want to just give a give a shout out to is the UC Berkeley Nobel NFT project, which Mike is going to talk about a little bit later. Definitely a cool and novel use case for NF T's. Okay, so last thing I want to talk a little bit about is the market outlook and our innovations in the future. So the market outlook last year was estimated to be about 25 to $30 billion in NF T straight, which is huge, gigantic leap from the previous year. And we're projecting about $50 billion. Not me, Reuters, just projecting a $50 billion market in 2022. To give just a little bit of, you know, a benchmark, the traditional art market is about 30 to $60 billion. Um, I personally have full confidence that the NFT market will outstrip the traditional art market very quickly, both because it's a little bit more accessible, but also because it's going to be a lot wider than art and collectibles. And then this is more just a fun thing. I saw my slide. Sorry. JP Morgan predicts a $1 trillion, metal Metaverse market by 2050. You can just Google JP Morgan Metaverse, and you'll see a new report that they put out. Honestly, I think that's kind of crazy prediction. But as Charlie alluded to earlier, the metaverse is not necessarily going to be just digital collectible. There's going to be a lot more to it. And now the big question, how much can you make if you're monetizing your NFT? Some people make a lot. So like I mentioned before, a digital artist pocket cost about $340 million since he started selling NF T's that makes him one of the most successful living artists, which is pretty cool. Board apes Yacht Club has done a billion dollars in trading volume since they launched last year. Also making those creators you know amongst the most successful living digital media creators, the mean price on my website and if the gateway is about $600. But I think the most important thing is the average price for NFT. The most common price for an ft is a better way to say it is $0. Most NF T's you're most likely to not sell your NF t if I'm being honest. So that's one of the reasons that I started with a why would someone buy it. Just because it's an NFT does not mean someone would buy it, you have to have something valuable beyond just the token mechanism itself in order to make it valuable. That said, I just want to I just want to point out, nothing is your daughter nifty gateway, we always say we're a curated marketplace. But another good point I think is anything in between zero and a million dollars is what you can sell your NFT for it really at the end of the day is going to be based on the market for whatever your it is that you're selling based on those variables that I spoke about earlier. Where to sell Charlie mentioned earlier, nifty gateway. We're a curated marketplace, we offer custody. So we'll actually hold NF T's for people, you don't have to have your own wallet. We offer Fiat you can pay with credit card, you can pay with your Gemini exchange balance as well. You don't necessarily have to engage in cryptocurrency. But we're a curated marketplace. We don't have literally everything out there, we only released a couple NFT projects every day, another great option is open. See, they're the largest NFT marketplace, they are based on Aetherium you do have to understand how to use cryptocurrency and how to use a crypto wallet, which might limit your audience. But it's still the biggest marketplace on the list. You could do a direct sale smart contract based. So you could also make your own custom marketplace. I kind of talked about this a little bit already some of the marketplace differentiators. The level of centralization and whether or not they have custody, how easy it is to use for the end user whether or not they understand the theory on whether or not they're blockchain native consumers is a really important part. And then what blockchains they run with most run with a theory but there's more compatibility coming on a daily basis. Now, I think it's important to point out NF T's are not necessarily all designed to be monetized. There's a use case for non monetized or free and FTS, either as a souvenir or as a utility for other reasons. Not everything has to be sold right now most people try to sell on a piece because they're expensive to make. But in the future, I think with lower costs, we're going to see more NF T's that are free or more used for utility purpose rather than for monetization. The long term outlook, it's really just the beginning, for utility for usability, but the user experience, I think we're at a point where right now it's not a very approachable market. Frankly speaking, you have to know too much about blockchain to engage in the market as a whole. I kind of liken it to cloud infrastructure. Another big buzzword from like 15 years ago, when cloud computing started coming out, you heard the word Everybody saw it in commercials, not everybody really understood what it was from a tangible perspective. But at the end of the day, and now everyone uses cloud infrastructure, whether or not they realize it or whether or not they understand it, I predict a very similar paradigm for NF T's and blockchain. I mentioned before the current value, the value for an IoT projects, it's probably going to fluctuate. And then last thing I want to leave off with is just innovations and future opportunities. So I talked a little bit about What's going on in the IP space right now, Charlie talks about something innovations that are coming. I think with blockchain network efficiencies with decreased energy cost or decreased energy usage, decrease computing costs, we're going to see more NF Ts, or NF T's featured more prominently in digital in digital ecosystems, especially with increased web three ecosystem development. Like Charlie said, we're really kind of at the beginning of this web three or Metaverse, ecosystem development, where NF T's will probably play a large role. Okay. With that, I will go ahead and kick it off to Mike, who will explain how he and Berkeley made their app.

Speaker 4  55:45  
Okay, let's get tangible here. How many people are represented research institutions that are thinking about doing an NFT of one of their historic artifacts? Excellent. I'm going to talk you off to crip the cliff here. So first, what I'm gonna talk about here is what's an NF? T? It's a little different than Charlie's description. Second, what's the Berkeley noble NFT? Why we did why we optioned the NF t up at UC Berkeley. And then should you as a research institution also do an FFT and then I'll leave a lot of my content for q&a. So first, let's talk about what an NF t is, because it's really crucial that you understand what it is in order to make a good decision about how to use it, and I'm going to describe it to you in three pages, starting with first principles. I think everyone here knows what a ledger here is. A ledger is a list or database of transactions that are recorded or recorded in chronological order. So an online ledger can be distributed, decentralized, shared and Synced by blockchains are essentially a type of online ledger with a lot of very interesting attributes like immutability and provenance. Bitcoin and Aetherium are two types of blockchains. Okay, page two of three entries in a blockchain can be referred to as a token Aetherium tokens, not Bitcoin tokens can be programmable or simple. So Ethereum tokens can be fungible or non fungible. And one way to describe foggy moment non fungible tokens is okay. These are fungible these $2 bills, even if I do this it's clean. It's the same value, it's the same value. Now, if this were a Willie Mays baseball card in this world, Willie Mays baseball card, they would not have the same value anymore. That's non fungible. So Aetherium has these types of crypto cryptocurrency based on Aetherium fungible tokens. And the third slide is okay. Eg theory of non fungible token is unique and then very distinguishable. Each NFT has metadata that can record who owns it through through an E wallet, and also can point to something in the cloud, like, for example, digital art, on the interplanetary file system IPFS. So in digital art can be of course, a lot of different things. One thing digital art can be is online documents, message articles, and so forth. And so they've been attracting a lot of attention. So now let's talk about Berkeley's noble NFT. This is also going to be in three slides. So as almost everyone knows here, when university researchers developing innovation, they submitted an invention disclosure to their university IP Office, and that documents the information about the invention. In 2006, Berkeley researchers invented cancer immunotherapy and submitted a corresponding invention disclosure. In 2018. Those researchers in particular James Allison won the Nobel Prize in medicine. The veteran Allison describes his invention as the fourth pillar against cancer with surgery, chemo and radiation being the other three. Okay, so now, Burton created an online digital image named the fourth pillar dot png. And it's based on historical documents from that cancer. Immunotherapy mentioned disclosure. In May of 2020, we created an E wallet using meta mask and deposit $100 worth of eath via Coinbase into that meta mask. And then on May 27, we took that digital art and we minted it as an NF T on the Ethereum blockchain using another website that can do this called a foundation dot app. It's kind of like open seas or if the gateway Okay, so we named that NFT the Foursquare Miller and I met NFT. We connected it to the UC Berkeley e Wallet. So that shows that we owned it. And then we also pointed it to the artwork on the interplanetary file system. Now, just to dispel a really big myth here among all these IP experts, the fourth pillar NFT is not ownership of the cancer immunotherapy invention, or even ownership of the disclosure documents. Its ownership of an image. That's it. Okay, so then less than three pages I in June, we listed that fourth pillar NFT for sale starting at four eath, which was another big debate internally about what how we should we should price it out. Now, the way the the auction works on foundation is the you auction lasts for 24 hours when someone makes the first bid at the price you're offering your for. And so and then, in the last 15 minutes of the auction, if someone makes another bid, the auction is extended another 15 minutes. So what happened is, the auction went for six bids and extended several 15 minute lengths, and it went for at the time 50,000 US dollars in the form of eath. Now, one of the things about NF T's is that the way the smart NFT contract works is 85% of that first auction went to UC Berkeley 15% went to the foundation. So we netted out 50,000 effectively. And then here's the other issue forever, forever. That NFT of the fourth pillar. So let's say 100 years from now $100 million, Berkeley gets 10% UC Berkeley gets 10% and the foundation dot app gets 5%. And one more interesting thing about the auction. The The winner was a dao a distributed autonomous organization that is a another manifestation of the smart blockchain Ethereum blockchain. And so that was kind of wild. And we had $2 bidding for that NFT. And by the way, the Dow that one was a Berkeley alumni group. So there's a lot of detail here that I've talked about 12 universities, one on one, about all this detail, but that was another fascinating part about the this project. So let me just say in retrospect, let me tell you what our objectives were. And you think about that, in the context of what your objectives are. The first and foremost objective was to, was to do an experiment that was novel and therefore newsworthy. And on that newsworthiness, we were gonna, we wanted to just mark at UC Berkeley as a community of innovators, and a campus of changemakers. And we had a huge amount of I mean, this is not like, worldwide. I mean, I don't know how many people in this room knew about it. But among our world, got a lot of press from the New York Times to nature. The second very distant objective was to fund research and education. But we knew when there was a lot of speculation about what was going to happen here when we're putting this project together. But we knew it wasn't going to move the needle of a billion dollar research budget. But what it did bring in is 50,000, Most of that went to the student groups, the blockchain at Berkeley is a large student grouping for that, and that was real money. And then the additional requirement, which was part of this, the project was we needed to be first in a category in this category of digital art based on science, historic scientific documents, and we knew some other universities were planning something like this. So then our assessment, you know, after was all done, we did a little post mortem. And so here's some things we concluded. The value, again, of this project was as an experiment was on the cutting edge of culture, of technology, of research institution. So there's a lot of reasons why we really kind of caught momentum within the UC Berkeley campus to make this happen. We also got a lot of favorable PR, again, some of our PR people who finished worth millions. We did some funding again, for example, especially for the student groups, we stoked a lot of innovation of staff culture at UC Berkeley, because this this involved there's no one at UC Berkeley that has a title NFT in their job description. And so there was a lot of people that came together, including alumni to figure this out and make it happen from idea to auction in four weeks. It was the first alumni dial that was interesting. We had grappled with a carbon footprint. And by the way, I did a bunch of research on this in the end, and I don't think the carbon footprint amounted to more than 1000 Couple $1,000 at most and get I can I documented that and if anyone wants to send me an email, I can send you the how I did that online. Now then, there was this notion of artificial scarcity online in the Berkeley image So that's something I'm going to come to in a moment here. And at the time, we were thinking of doing several more NF T's, we had the CRISPR, cast nine NFT, that was invented at UC Berkeley. Also, it resulted in the 2020 Nobel Prize in Chemistry. And then we had something called a near zero knowledge proof, which is one of the protocols that's at the foundation of blockchain. And that was also invented UC Berkeley in 120 12 Turing Award. So we were actually putting together documents to maybe do some of that. But in the end, we decided to put them on hold. So a couple of things to consider here, before we turn over to q&a. First of all, as Patrick and I were talking, what is the value of the NFT Image option beyond just the experiment that we had at Berkeley? Is their use value?

Speaker 4  1:05:45  
Not really sure. By the way, anyone, anyone can take our our fourth pillar dot png, grab it off the if the interplanetary file system and then use it themselves. Of course, they can't use it in commerce, maybe, because they don't have the copyright, but anyone can easily use it. Is their social status value? Well, maybe. And that's kind of what Patrick was talking about. There are groups where this is a fun thing. Is there a resale speculative value of value, that's also very speculative. I don't know if anyone remembers the 2017. Ico market, the initial coin offering markets, but you know, those aren't around anymore. And also just come up with things consider like, if you do a web search on Freakonomics, there's a series of podcasts on the hidden side of the art market. And a lot of what they claim is there's lots of monkey business in the in the conventional art market. And I think a lot of that same monkey visits happening in the in the NFT are in the digital mark our marketplace. So you know, that's that's some uncertainty. And then finally, I'm gonna there's a quote here that I'm actually reading verbatim because I think it's so interesting if you do a search on artificial scarcity online. This is a quote from this article, NF T's and the explosive rebirth of artificial scarcity by ludorum. Nf T's are on some level, patently absurd. users aren't buying a work of art that they alone can enjoy, they are purchasing a non exclusive addition to a public record that associates their name with a virtual item on a ledger that virtually no one will ever read. It's like a strange, hyper capitalistic parody dreamed up by William Gibson. But like the macro story at the heart of most tech bubbles, they have a truthiness to them that makes them resonate. And so that's something for you to follow up and research if you're thinking about doing this at your research institution. And I'll leave you with one more thought before we go into the q&a. And that is using NF Ts and your research institution for other things besides our of your historic documents, for example, like your intellectual property, and let me give a shout out to my colleague Ruben at USC tomorrow at 830. He's hosting a forum session with IBM and they're talking about using Blockchain NF T's for IP in general. And I think it's also just a fascinating area. But here's why it's fascinating. So there's a very popular MOOC massively online course. That's from professors at Stanford, Berkeley, and a few other universities. And if you go to lecture two, and listen to the professor in the first two minutes, you'll see okay, what is the value of blockchain and he sums it up very simply, Blockchain provides coordination between many parties when there is no single trusted party. If there is a trusted party, then you don't need blockchain. And there's so many better solutions. And when you think about intellectual property, especially patent rights, I think I trust the US Patent Office and their website pretty well. And I also trust a lot of these research institutions when they're talking about licensing their own IP. So I've been on several work groups, for example, IP with a bunch of other university tech transfer people and we just grappled with, how can we as university tech transfer, people use blockchain for our IP, and I frankly, I never, we haven't come up with a killer app at all. So in the q&a, I'd be happy to talk about if you how we put the team together, how we design our NF t, which is just with a crazy story, all the legal issues, I can pull it through just some of the legal issues at your institution, as a nonprofit is going to have to grapple with if you do an NFT. The finance issues also are passing because a lot of this stuff is in the crypto space how many universities have cryptocurrency, arson, the marketing, the marketing was also kind of really wild. We fortunately we had, again, we had experts, and they mostly were university alumna who are helping us and for example, in the marketing, you know, you can't have an auction once you have several bidders give one bidder it's not an auction. And not only that, you have to have several what they call wails and maybe at least two and preferably three, and you have to put all that together before you actually, otherwise, you're gonna look at anyone from Yale here. Good. So GAIL VALE did an NFT. Soon after ours, we are recorded all public internet access to an after hours, and it was from their data science group. And, and so basically they listed it and got one bid. And the bid was at the asking price, and it was probably kind of an internal purchase. But also they they did an NFT that, again, when we when we were designing this NFT one of the things our experts are telling us is, it can't just be a simple like poster, it can't be something that you can do in the real world, it's got to take advantage of the digital canvas. And so for example, the Berkeley NFT it's something that if you look at it from far away, it looks kind of like an interesting piece of art. But if you zoom in, you can actually read the historic comments like you can read a fax from the inventor, saying, here's why I thought it was fascinating look at these mouse models, and it's a fax with, you know, people handwriting on it. So that was kind of taking advantage of the digital canvas to create something interesting. Whereas just putting up a poster is among the culture of the NFT world that can that can create a meme that was not too favorable. So getting the marketing to finance the legal it's really fascinating. So you're welcome to bring it up during the q&a, and then turn it back over Charlier.

Unknown Speaker  1:11:29  
By the way, great job with these guys, right.

Speaker 2  1:11:37  
So one of the things that I like to explain is, a hammer is a tool. A hammer is a very useful tool and you can use a hammer to put a nail in the wall and hang a picture on it. If the picture is Mona Lisa, then that tool is very useful to store something very valuable. And if the picture is maybe my scribbling it may not be very valuable. It doesn't make the tool any less of a tool. It doesn't make it any less effective as a hammer. That doesn't make it any less effective at putting nails on the wall. It just means that you have to use the right tool for the right purpose. Blockchain non fungible tokens, Metaverse, all those are tools. Nobody's going to go to a meta verse, which is boring, nobody is going to buy your patent. And because you did it using a non fungible token if they weren't going by it. Otherwise, if you need a database that tracks what you weren't doing. Blockchain and non fungible tokens are fungible tokens may be a very valuable option to you, just as Mike was saying, there are inherent values of blockchain technology as it exists today, which makes it useful in some cases and not useful in others. But that doesn't mean that it will turn something valueless into something valuable. So that's a big lesson. And the other thing that I want you to have as a takeaway, is we focused a lot on the art work aspect of non fungible tokens. But non fungible tokens can have utility, they can be securities. Mike described why the non fungible token was worthless with that last quote. But that's the same thing you could say about what DTCC does with stocks. They're digital representations that are recorded and have no value other than the fact that you think that they have value of stocks, right? I'm not saying non fungible tokens are securities don't miss read me. But the point is, is it's a database, and it's a database or ledger that serves a database or ledger purpose. But

Speaker 5  1:13:56  
it's with a kick, it has software on it. And that software allows us to enter into technological contracts that enable us to have self enforcing technology for whatever bargain we can we make.

Speaker 2  1:14:12  
So at this point, we're open to questions but

Speaker 1  1:14:23  
Sorry, I was on mute. Welcome back, everyone. Thank you, Patrick, and Charlie for listening in and refreshing your memory on that session from the last conference attendees, please feel free to submit your questions into the q&a box. And while we get those submitted, I'll let Charlie and Patrick kind of riff and comments on any updates or changes or just thoughts that they've had since reflecting on this session.

Speaker 5  1:14:52  
Thank you, Sammy, and thank you to autumn for replaying this. We always forget what we said and now we know it For first of all, I thought it'd be nice to run through some update type questions with a little q&a between me and Patrick. And one of the, I'd say, downsides right now is we're in what's called a crypto winter. That all the hype and glory that we were talking about in February and when when Bitcoin was breaking 50 $60,000 in Bitcoin has come crashing down two times below 20,000. Recently, it has caused a chilling on the blockchain technologies and markets and investors. But yet the market still exists. The Metaverse is still out there, and other things are going on. And I still want as Patrick to give us his good, bad and ugly on NF T's from nifty gateways perspective, during this crypto winter. And, Patrick, your mic? Yeah,

Speaker 6  1:16:10  
yeah. Fair enough. Sweat. Yeah, happy to talk a little bit about it is certainly crypto winter is the right term. And I think crossover with general economic market depression we're seeing right now, I think people absolutely either have lost money investments, especially if they're cryptocurrency investments, or simply don't have as much disposable income or feel as comfortable spending their disposable income, I would say, probably last year, the NFPs are luxury goods and almost every single case, right? They're only things that people will buy if they have a little bit of extra money at the end of the month. Certainly, I think wallets are tightening right now. So we're seeing that reflected in the markets. You know, I would say, from nifty gateways perspective, we are unique in that we're not just a marketplace, we also publish NF T's and we actually build our own NF T content, mostly art, and collectible focused. But I think a big change that we're making, which we actually we've been working on behind the scenes for a little while, was since since actually I gave Well, before I gave this talk last year, we have been working on building out infrastructure use cases for NF T's. I actually think that's probably one of the more unique one of the more important cases, art and collectibles, like I just spoke about, especially digital art are certainly reasonable use cases for non fungible tokens. But there are a million and a half other ones, I think the biggest thing is the infrastructure just isn't there. This is a market that is for all intents and purposes, a year and a half old, we saw a ton of investment money getting poured into pretty much any business that could fit the word NFT in last year, which to me says that there's a lot of new businesses out there, I think what nifty gateway is going to do and when many other businesses are going to do our focus on other use cases outside of art and collectibles are these tokens.

Speaker 5  1:18:15  
Patrick, I think the infrastructure point is one that's useful for the audit audience. And in particular, when we think about autumn, we think about universities doing research that can be monetized and sold in the commercial world. And when we're talking about nfts, and and the problems that exist and gaps in technology and infrastructure, when you mean infrastructure, you mean blockchain technologies, like, for example, turning the the moral promise to to pay on resell to a real promise for or or an enforceable promise that gets implemented automatically in the blockchain. For universities, what do you see as the technical logical research areas, which if their faculty address become something which the TTS can monetize, versus if the faculty addresses it's just a claim to fame? And I sort of would draw that distinction with what Mike referred to as, you know, the zero knowledge proofs which you know, get embedded for free versus maybe other technology, which may be more proprietary and sold. Does that make sense? Yeah,

Speaker 6  1:19:44  
that does make sense. I mean, yeah, that that's a really good question as well. I think that's something that's interesting about the blockchain space in general. There tends to be a lot of open source development where People build out infrastructure that they expect to profit off other people using in some way, but not necessarily that they expect other people they expect profit off of by, you know, specifically, I'm trying to think of the right way to say it. But I think that there's not necessarily an expectation of profit from selling the IP directly, all the time. Whereas you might build infrastructure around a blockchain layer that you would monetize like nifty gateway, we have minting facilities that allow us to emit NF cheese at A T is for very cheap. People pay us to be on our on our website, both because of that minting infrastructure and because of other interesting things that we offer, like custody infrastructure. So I would say building around blockchain ecosystems as opposed to maybe like, building a specific point of a blockchain yourself, like as your knowledge proof might be an effective way to look at it. And that's pretty general, I'm talking through maybe use cases that I think would be worth worthy to focus on. I think a really cool example, in UK recently, a court just ruled that they will accept legal documents submitted as NF T's now it's probably more of a marketing or like sort of a flash than anything else. But at the same time, there's certainly promise for delivering what delivering NF T's for their authenticity, for instance, I also think that other prominent use cases that absolutely deserve a good look would be things like ticketing, access, generally speaking, loyalty and program rewards, as well as general consumer interaction, sexual assault, there's a question q&a lined up about his little badges. That can kind of relate to that a little bit. I don't know if that answer your question, Charlie.

Speaker 5  1:21:54  
Yeah, no, I mean, I think it's interesting because like, when you talk about the UK example, and Beth, we'll get to you in a few minutes. When you when you talk about the UK example? Well, it's it's basically a digital Docusign. When when we approved documents, whether we use holo or DocuSign, or some other signature services, the blockchain offers a secure mechanism to verify that the person who signed it is the person who signed it. So the fact that the UK Government would allow the use case of allowing you to post and sign documents on a blockchain makes a lot of sense. That's that's a good utility example of what can easily be done with a smart contract. But I think that the lesson that we used to say before 50s was the subject in blockchain, instead of blockchain was the subject is if you're improving a blockchain as a blockchain, generally, that stuff is the open source and the stuff that you're doing for academic value, not not for monetization. It's the on and off ramps to the blockchain, or the layers that go on top of the blockchain where where the money comes in. And it's the difference between making the Internet the Internet or building Facebook on the internet.

Speaker 6  1:23:19  
Yeah, I think it's a great way to say it. Yeah, for sure.

Speaker 5  1:23:22  
So So Beth wants to know, would you consider digital badges that are becoming popular in higher ed, as a specific kind of NFT? Or are they fundamentally different? And what one question I have about that. And maybe you can text when you say digital badges are they on a blockchain?

Speaker 5  1:23:53  
And Beth, I don't know if you can type it in the chat. Because when you talk about NF Ts, NF TS or something that is usually a blockchain enabled technology. Patrick, have you heard of an entity like credibly?

Unknown Speaker  1:24:19  
You're on mute Patrick.

Unknown Speaker  1:24:24  
You have to unmute yourself, Patrick.

Speaker 6  1:24:29  
Nice. Thank you so much. All right. Yeah. I think I understand what you're saying. I know what you're talking about. You're talking about credential badges, right? Like saying things like I'm certified to, you know, or I'm certified with, like, you know, this level of Python, perhaps something along those lines. I think that NF T's would be an awesome case for those badges. To from the sort of authenticity standpoint, it definitely makes sense, especially as NF T's end up being lower cost Just to have those sort of tab those represent those credential badges. You wouldn't that I think the point is, and the whole point of an NF T in general is that you wouldn't necessarily need a third party to verify that information. So you're talking like you could, as a university issue that to somebody's personal wallet to their personal keys, and that person can walk around then with this token that represents their credentials, as opposed to having to use a third party service that might verify those credentials. So I definitely think that's an interesting case.

Speaker 5  1:25:33  
Well, actually, Patrick, I think that that would go along the lines of when you're combining NF T's to like LinkedIn, or Facebook and something like that. Yeah. So we discussed a little bit of this, I think, in the q&a, or maybe off topic, back in February. But you know, one of the issues is how do you get how do you buy like a board apes NF t, and then turn it into your avatar on Facebook, or Twitter, or whatever the social media of the day is. And that's one of the technologies that people are working on and trying to commingle next. The the certifications, that that you're talking about, can also be verified in your example, by the University of Michigan, as well as by you. So you could mention NF t that is a badge that is cosigned by Michigan, and have that NFT then be something that could be displayed as part of your avatar in social media, for people to know that this is this is a certification that is indeed an authentic certification. One of the great things about blockchain technology, whether it's fungible or not fungible, is that it is a great technology for authenticating data. And so if you're, if your digital badge needs to be authenticated, a blockchain solution is a useful way of doing that. And the difference between it being an NFT or just being a smart contract, is whether the certification is unique to Beth, or whether the certification is the same whether it's Beth or Charlie. Beth does actively give you what you're looking for. Do you have more on that?

Unknown Speaker  1:27:37  
Okay, great. Is there any other questions we have out there?

Speaker 5  1:27:46  
Patrick, I'll give you one more. And then if not, if we don't get any more than we'll let everyone have the rest of their day back. So, Patrick, what can you share with us that we'll see from nifty or Gemini in the metaverse that will pique her interest and say, Wow, that's cool.

Speaker 6  1:28:11  
That's good. stuff, because I think the coolest stuff, honestly, I think the coolest stuff I can't share yet, I think you're gonna see a, an announcement in the news, you know, over the next month or so, but can't share the very cool stuff. Some of the this is maybe more technical, a little bit nerdier. But something that I'm really excited about is decreased transaction costs. I mentioned it during during my talk last time. And since then, we've actually made substantial progress, our transaction costs versus last year have been lowered by 96%, which is pretty incredible. It's one of those sort of like exponential computing improvements. The cool thing is that's not the blockchain getting better. That's us getting better at using the blockchain, I think we're going to see convergence sort of from both directions, where we're also going to see the blockchain improved to kind of beat us in the middle. The implication of a decreased transaction cost is that a lot of the current downsides of NFT start to sort of diminish and evaporate to an extent. Often it's, you know, slower and more costly to use a blockchain but as we get better and better, and as we get more and more efficient, that will start to change and it will start to become more viable on a day to day basis. The other cool tech innovation that we're making and somewhat related is cross chain infrastructure. So allowing one blockchain to talk to another blockchain and having them interact very smoothly. Hopefully, one of the issues again, there's efficiency and making efficiency improvements there, I think allows for, you know, a wider variety of opportunity in the future, especially when you consider things like private blockchains For or just blockchains for different use cases, able to seamlessly and programmatically interact with one another. So those are two things that I'm really excited, maybe a little less tangible, but I think they're gonna lead to some pretty cool innovations down the road. So

Speaker 5  1:30:14  
one of the things that I would come into is not withstanding the crypto winter, we still are seeing a growth of litigation in the nifty space. So one of the things that we've seen is a little dispute over board apes and who had the right to the different board apes. Nifty is that we're out there and FTEs that were out there. We also have ongoing litigation over Pulp Fiction between Quentin Tarantino and whether his reserved rights on the screenplay versus Miramax and their rights on everything else. We didn't see the the meta Birkins fight over the Birkin bag sort of disappear. But we we are get resolved. But we still see hints of of First Amendment arguments fighting, you know, traditional IP ownership. So the we may be through a winter, but I don't think that the ground is totally frozen over and what we're seeing. And on the IP front, we see that as a university since a lot of times what you develop will not be monetized until maybe a year or two years down the road. This may be the time to think about what you want to develop and protect for those on your own on ramps and off ramps and, and be ready for when the winter thoughts. So on behalf of Patrick and Mike is not here. We thank God for having us and look forward to doing more.

Speaker 1  1:31:57  
Absolutely, thank you both so much, Charlie and Patrick for this informative presentation and attendees. Thank you all so much for joining today. As a reminder, a recording of this session will be available for viewing on the autumn Learning Center within a few days of the event and it was recorded included in your registration fee. And I believe we have slide handouts from the annual meeting, Charlie, I will get with you on that. If we do we'll have a handout available as well in the autumn Learning Center. And please forget don't forget to complete your webinar evaluation which will open up when you close out of this session. It's super quick and helps us serve your needs in the future. And our second spotlight session is next Friday on evaluating startups. So we hope to see you all then. And with that I will say thank you once more for joining us and I hope everyone has a great rest of their afternoon and a good weekend.

Transcribed by https://otter.ai