YouTube is the latest tech giant to explore the possibility of using NFTs on their platform, joining the likes of Meta and Twitter.
YouTube CEO Susan Wojcicki recently recognized the potential of Web3 technologies such as NFTs to create an additional revenue stream for Youtubers. Just last May, one of YouTube’s most viral videos of all time, “Charlie Bit My Finger,” sold for $760,999 as an NFT via Origin Protocol. After being auctioned as an NFT, the original video was deleted from Youtube.
This was a wake-up call: YouTube is missing out on potential opportunities to profit from NFT sales. It’s also at the risk of losing some of its most viral videos that could follow a similar trajectory.
YouTubers have experienced their likeness being used without their permission in staggering numbers, sold as NFTs on external marketplaces. Having the ability to sell unique tokens right on their channels would help deter bad actors from stealing their images and content. There would be no confusion regarding the source of those NFTs if they were auctioned directly from a creator’s verified channel or adjacent marketplace.
The NFT market is a bit like the Wild West at the moment. It’s operating outside a set of boundaries that have yet to be set through court precedent. Lawsuits will no doubt be plentiful, as creators look to suppress the possibilities of their likenesses being stolen. The ability for creators to profit off tokenizing their videos and clips would be a potentially lucrative revenue stream.
Perhaps prices won’t come close to that of “Charlie Bit My Finger,” especially after the marketplace was flooded with the content people have uploaded throughout YouTube’s existence. However, the appetite is clearly there for digital collectibles, and YouTube would be the first marketplace to focus on videos as a form of digital collectibles.
Meta and YouTube could be tempted to build marketplaces separate from their existing sites in an effort to appease their existing users who are skeptical of the technology. This would be a mistake. These companies should aim for seamless integration into their already existing platforms in some capacity.
The potential for a YouTube NFT marketplace is massive, based on the scale of the platform, and a lack of competition in video-specific marketplaces. OpenSea has captured 97% of all NFT sales and has proven to be the dominant platform at the moment. However, pictures and GIFs are the vast majority of content being sold on OpenSea and similar platforms.
While current marketplaces do offer the ability to mint and sell videos, it’s not their main function. File uploads are capped at smaller sizes, and their streaming capabilities are subpar. It’s obvious YouTube would instantly become the best place to mint and distribute video-specific tokens. Their upload capabilities, steaming services, and reach are second to none.
YouTube could simply be exploring NFTs with features similar to the verified token profile picture on Twitter. However, they should aim higher, given the potential market. Their existing video library already represents a gold mine for the company and YouTubers alike.
NFT skepticism is understandable at this point. Emerging technologies are always rife with scams, lack of legal clarity, and regulatory concerns. Copyright infringement is an ongoing concern for NFT buyers, and they rarely understand the fine print of what they truly “own” when they make a purchase.
YouTube, Meta, and Twitter can bring instant legitimacy and security to the NFT market, but there are some major decisions ahead of these companies as they start exploring this market. They need to decide which underlying blockchain technology to use, whether to create their own tokens or use an existing one, and what to do about wallet integration, to name a few challenges.
These issues are all crucial for a seamless user experience, but there is no company better suited to tackle them, bring trust to NFTs, and monopolize video tokenization than YouTube.
Daniel Yurcho is an NFT entrepreneur.
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