Thread by @TheHypeMan2019

1/ NFT discussion series by @paji_a #9: "NFT and fanfics are compatible" #NFT #NFTcommunity #anime #japan #pajiEnglish

2/ Today, I'm going to write about why NFT and fanfics are so compatible. The reason is simple: a character business called PFP has emerged as a powerful way to utilize NFT.

3/ Where there is a character, there is a secondary creation made by a fan, and it goes hand in hand with the activities of fans in the community, which is important for the success of NFT works.

4/ NFTs may be able to distinguish digital data into 'real' data and replicas, but they are still easy to duplicate. It is more difficult to crack down on and restrict the illegal distribution of data that is copied.

5/ If this is the case, then it would be better to open up the "field of vision" to co-creation, or secondary creation, for fans to enjoy together.

6/ We live in an age where social networking services (SNS) allow individuals to deliver information instantly to the world, and "works" such as illustrations, videos, and cosplays drawn as fanfics can function as word-of-mouth diffusion devices among fans.

7/ Word of mouth is the best way to increase engagement, and it is the most cost effective way to advertise without spending a fortune.

8/ As is the case with the Internet, individuals are becoming more and more empowered by NFT (blockchain technology) and have the power to move the world.

9/ Individual creators and small teams of creators are becoming more and more brilliant, and "collaboration" through secondary creation can have an effect that surpasses that of large corporations.

10/ If fanfics are officially opened up, not only fanfics by amateurs but also those by professionals can be attracted from all over the world, and "official collaborations" can be realized simultaneously and have a dramatic effect.

11/ This is in contrast to the old model of "collaboration" where contracts must be signed one by one.

12/ When opening up to derivative works, in most cases, all the character IP holder has to do is provide guidelines for derivative works.

13/ In a sense, it's like deregulation, as it creates an environment that allows fans to expand the "original" in a massive and permanent way in proportion to their popularity, without needing permission.

14/ In the anime industry, a lot of anime produced are based on manga and light novels. Mangas and light novels are the source material. Anime adaptation can be considered a kind of secondary (or fanfic) creation by professionals, so to speak.

15/ Games/merchandising is also an extension of the fanfic creation by professionals. It is just a matter of making the business size appropriate, and these examples of the global and long-tailed version of it are secondary creations.

16/ Characters that were created before the development of the Internet and the spread of social networking services are difficult to be officially recognized as fanfics because of the existence of interested parties.

17/ This is because the character business is a highly gambling investment, and sharing the rights to a successful IP is not a sensible decision.

18/ However, with the development of the Internet and the spread of social networking services, it has become clear that a new branding method that involves co-creating with fans and nurturing the character together is effective, as exemplified by "Hatsune Miku."

19/ NFT is a technology that will further accelerate this trend, and is also effective as a differentiator from existing popular characters.

20/ And when the number of characters originating from the NFT continues to grow indefinitely, opening up or restricting secondary creation will affect competitiveness.

21/ When there are new and old characters in the market, there will be a huge difference in the growth of the IP/brand depending on whether you have to sign a contract for each and every collaboration or whether the fans collaborate on their own. To be continued tomorrow.

22/ Today, I'm going to continue writing about why NFT and derivative works are the best of both worlds. When fanfics are allowed, co-creation is born in proportion to the popularity of the work and the ease of secondary creation.

23/ More detailed illustrations, anthropomorphization, side stories that fans want, etc., can expand the "original" in a more three-dimensional way and add depth to the work.

24/ If it works well, it will be possible to sell illustrations of fanfics as NFTs, or combine original and fanfic NFTs as music NFTs, or fanfic NFTs with fanfic NFTs.

25/ NFT characters, by their very nature, have a certain degree of asset value; every time a large number of NFT derivative works are created, the value of the "original" NFT may be amplified,

26/ creating a "complicity" between the owners of the "original" NFT and the creators of the derivative works. Complicity is born between the owner of the original NFT and the secondary creator. This will be the driving force to boost all aspects of the NFT character.

27/ The possibility of amplifying the value of NFTs through secondary creation is something that was unthinkable for digital data in the days when there were no NFTs.

28/ This characteristic can be said to be a technology that can become the "core engine" of the creator economy, where content is created in a fan-driven, bottom-up manner.

29/ NFTs with a high level of purity, such as full-on chains, have a very small record size and are limited in terms of expression, except for those that are created in an expensive manner.

30/ To put it simply, when a character is drawn with pixels or a simple NFT, there is more room for creativity/imagination, and thus a secondary work can be the perfect combination to make up for the missing information.

31/ Since NFT characters will be developed globally from the beginning, overseas fans and creators will be able to connect and co-create with each other through secondary creation.

32/ If the old "permission is required" custom is maintained, it will become a major bottleneck in distribution. On the other hand, if we trust the fans and the community, we can maximize the distribution of fanfics as permissionless.

33/ The fact that NFT is global is synonymous with the existence of a language bottleneck. Many of the secondary character creations are visual-centered,

34/ and the fact that fans of NFT characters from around the world can enjoy each other's secondary creations will continue to inspire the community and have a positive effect on global engagement.

35/ NFTs are digital entities, so even if you regulate them, they will start copying and creating derivative works on their own anyway. It is a matter of weighing up the costs, advantages and disadvantages of

36/ taking it to court and cracking down on it. It depends on the premise, but even if it is a reluctant and pragmatic choice, opening up secondary works can also be the "right" answer.

37/ Fans can work together and utilize their fanfics to keep the popularity of a character growing. It's similar in the way a DAO functions. This makes the charcter more like a public good.

38/ 99% of companies currently owning characters have not adopted this style yet. So in this new era, new characters that don't require permissions to distribute fanfics can stand out.

39/ The copyrights that are acquired by policing regulations and rules,created by people of that era who are not utilizizing the current technology,

40/ may become a very centralized idea that conflicts with the blockchain philosophy. The new Web3 era will encourage growth different from the old ways.

41/ The NFT has created a means of monetization that does not depend on copyright, such as the ability to sell the data itself in the true sense of the word on the open world of the Net,

42/ and the ability to add a system that returns royalties for transactions after secondary distribution.

43/ We have also created a service called "Nijiso (niij.so)" that allows users to sell their officially approved secondary NFTs and receive royalties. The idea is to allow creators to sell secondary illustrations as NFT works after receiving official approval.

44/ With the birth of pre-NFT success stories such as Hatsune Miku and the Touhou Project, we've seen that community-driven excitement can be long-lived and the engagement with fans can be very high,

45/ so even from a medium- to long-term perspective, secondary creation can have the effect of extending the life of characters.

46/ By declaring CC0 (Creative Commons Zero), which has been adopted in Nouns, the ultimate NFT, regulations are being established that allow anyone in the world to use it commercially without permission, in line with the Web3 context. CC0 would not have worked without NFTs.

47/ Of course, CC0 has its own issues: if a CC0 character is used in a way that is offensive to public order and morals, such as child pornography in other countries, there is a possibility that the company or individual providing the original character will be sued.

48/ In any case, I hope I've conveyed the merits (along with the demerits) of the idea that the secondary characters are very compatible with the new Web3-like philosophy that expands the possibilities of NFT,

49/ and that it's worth considering how to utilize them, including with existing characters. See you soon.

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