This is a developing story of how a digital entrepreneur, Jack Butcher, created nearly $250,000 (and growing) out of thin air in less than 3 weeks.

Do I have your attention yet?!

Now I’m not saying you and I could replicate this, but we need to know what’s possible in this beautiful world.

Prop up your feet and let’s cater to your optimistic, greedy soul.

The Simplified Overview

Because this is in part an NFT story and I have a tenuous grasp of NFTs, I’m going to strip away all the crypto and give you the simple version of what happened and what continues to happen.

A digital artist created digital art and sold prints for 24 hours.

Because the artist is acclaimed in the digital world, there was enough demand to sell 16,031 prints in those 24 hours.

The price of each print was $8 for a one-day total of $128,248.

Because this is art, these prints are collected and auctionable on a secondary market.

The artist earns 2.5% on every secondary sale.

At the time of this writing, there has been $5MM in secondary sales earning the author an additional $125,000.

The author’s total earnings so far are over $250,000.

That mind-blowing total is the least interesting part of the story.

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The Meme and the Moment

You may have noticed the $8 price.  Hang onto that number for a second.

Now have a look at the art piece:

And finally, the art was introduced with this on Twitter:

This artwork may or may not be notable

I’ll bet you don’t need me to tell you what’s going on, but since this is my newsletter, I feel like I gotta.

So obviously, this is a riff on Elon Musk’s pay-to-be-notable plan for Twitter; pay $8 and you get a blue checkmark.

This is a meme that’s having its moment.

Distribution Network as Asset

I’m about to get to the unexpected part of this evolving story, but I want to point out something essential before moving on.

To reiterate, the availability of the art was made available on Twitter.

If you or I had made this announcement for our art, I think we’re lucky to sell even a single print and I give you better odds than me.  However, our artist has a Twitter following of ~231K who are hungry for his art and ideas.

His Twitter following itself is a huge asset that enables all of this even to be possible.  No distribution, no sales.  Big distribution, lots of sales, and exciting possibilities.

In future newsletters, I’ll talk about strategies to build distribution assets, but just know you’re in the presence of one right here.

Okay, let’s get to the good stuff.

That Disappointing 5000% ROI?

Okay, I’m finally to the point where I’ve gotta tell you that everywhere I used the word “print”, I was really referring to an NFT.

NFT stands for Non-Fungible Token which gives it a digital authenticity thereby enabling a collector to absolutely own a provable edition. 

These are akin to limited edition giclee prints if you find that relatable; the print is numbered and comes with a certificate.

So someone owns the first edition and someone else owns the 16,031th edition.  The lower the edition, the more valuable it is on the secondary market.

You can see the value disparity below in the 1st vs. 1592nd edition:

That 1st edition is worth quite a bit more than the 1592nd edition, but all is not lost.  Recall the original just-minted price was $8.  The ROI for 1592 is 5000%!  And for the 1st edition, let’s just say the ROI is…good enough.

The individual investor-collector does pretty well.

Gamified Trading

The project would be successful if it stopped right here.

But the artist decided to let gameplay and human behavior become an extension to the original art.  He did so by exploring what’s called a burn mechanism for the NFT editions.

What is a burn mechanism?

It’s the destruction of one or more of the NFT editions to reduce the supply and potentially increase the value of those remaining.

So in this case, the ultimate goal is to get to one of three possible NFTs that have a single Check design; this is a different NFT altogether that is received in a sort of digital trade.  Getting one of these requires the acquisition of existing Checks and burning these in an ordered and formulaic way (the digital trade).

I’m sparing you the details, but 4096 Check editions would need to be acquired and then burned to eventually get 1 of the 3 special single Check NFT editions.

I probably lost you. Just know that the ultimate goal is to get a very rare art piece that will have value from the “chase” to get it.

What will people do to collect those special editions? Will they team up and work together? Or will they sabotage the game to further reduce the supply of the special editions? Who knows?

Therein lies the art that will play out over time.

It’s brilliant.

Takeaways and Follow-Ups

I abbreviated many of the rich details of this project because I intend for this newsletter to be short and digestible.  Here are some places to go to learn more:

• The tweet that started it all.
• The ongoing ideation Twitter thread for the project.
• The OpenSea Checks project collection page.
• The Checks project website.
• A Twitter summary thread.

I wrote about this project in hopes you’d take away the following:

• Money can be created out of thin air
• NFTs are more than just jpeg files and are worthy of your attention
• Projects like this cannot happen without building a following.

If you had no idea this type of thing was possible, I’m here to suggest to you that money is made in all kinds of wild ways—this is but one.

— Bill

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