7 Jan

Instagram & NFTs: Digital Gallery Marketplaces

NFTs may have fallen out of the headlines, but this new asset class has clearly enjoyed a remarkable year. In 2021 NFT sales totalled over $12bn – a huge growth from just $340m in 2020.

And we haven’t seen the last of them.

NFTs have revolutionized many industries, from the art world to gaming.  Now social media platforms are looking to get in on the action. The Head of Instagram, Adam Mosseri, let slip the company were actively exploring an NFT integration onto the platform.

If they pull it off 2022 could be another big year for NFTs. Whether social media users are interested in “blockchain galleries” is another question.

But what are NFT’s? 

First, a quick refresher. NFTs (Non-Fungible Tokens) are unique and non-interchangeable units of data stored on the blockchain. Essentially, NFTs allow you to create a digital proof of ownership certificates. While they are often associated with reproducible digital assets like images, clips, or audio files, NFTs might also be used to parcel up ownership shares of more valuable single assets. (Shares in the world’s most valuable stamp in the world might soon be offered as NFTs).

While NFTs have often been treated like trading cards (here’s a clip of YouTube Star Logan Paul doing just that), their lasting appeal lies with their ability to “enable new markets” by creating a new form of ownership.

To the MetaVerse and Beyond

Instagram’s parent company Facebook has recently rebranded. As its new name might suggest, Meta is focussing on the Metaverse. And it seems like the NFTs have a big part to play.

Pitched as a 3D virtual world that you can access via headset or augmented reality, the Metaverse promises to integrate users into an entirely digital world. Mark Zuckerberg has backed this rebranding effort with a $10bn investment last year. It seems like it might be paying off. Their headset, Oculus, which will grant users access to this virtual world, enjoyed record sales during the festive period. Indeed the Oculus mobile app hit number one on the App Store on Christmas day.

As the guarantor of “digital ownership”, NFTs will be key to monetising this transition. In a virtual world, NFTs will allow us to buy and ensure access to “exclusive” digital goods.

Digital Galleries on a Marketplace

In the here and now, Instagram is looking at introducing an e-commerce type platform for people to bid on NFTs in a new form of marketplace called “Collectibles”. One app developer shared some preliminary plans of what this could look like. In essence, the plan seems to be to create a digital gallery, where users can display the media that they own via-NFT. In metaverse terms, this is a bit like buying art for your home, only in this case the walls will be pixel, not plaster.

But a marketplace is really just the start. Once the bedrock has been laid, Instagram will have a basis from which to totally revamp the way we connect with each other. NFT avatars? VR reels? Collectable stories? Even an Instagram cryptocurrency?

The possibilities are endless, but doubts remain. For one thing, on a platform built to offer endless free content, will its users be inclined to buy? And will investors see the value? The jury’s out.