NFTs and blockchains: a beginner’s guide

If you’re baffled by non-fungible tokens (NFTs) and blockchain technology, you’re not alone! James Faktor of BookVolts explains how it all works.

1. What are blockchain technology and NFTs?

Blockchain technology is essentially an update on how the web can function. A simple way to think of it is as a digital ledger that many people can access, yet no single entity owns. When anyone adds information or makes a transaction, the ledger is updated automatically for everyone to see. This digital ledger is supported across multiple computers rather than one, making it very secure and transparent, and it’s only possible to add new signatures to the ledger, not to change or delete previous ones.

A non-fungible token (NFT) is a token that denotes ownership of a certain digital asset within this blockchain ecosystem. NFTs can be bought and sold as part of blockchain transactions. Blockchain’s transparency mean users can irrefutably own a digital item or product—something that was previously impossible.

2. How do these two concepts relate to books, and why should publishers, authors and book buyers be interested?

NFTs present the opportunity for digital-first editions of books to be created (or ‘minted’ in blockchain jargon). This allows readers to own the digital books that they buy rather than rent them. Blockchain books can never be lost, hacked or suppressed.

Authors should also be interested in NFTs for the secondary sales market, because they can continue to make royalties if their work is sold on. Blockchain technology allows for automatic royalty splits through smart contracts, so if a reader chooses to sell their copy of an NFT on the secondary market, the author can get a portion of that sale in perpetuity.

NFT editions can include bonus content like new text, audio, video, artwork, author introductions, fan messages and exclusive covers, as well as the opportunity to join a unique community of fans, often with direct access to the author. Fans and collectors get a new and exclusive product and an experience that goes well beyond the simple purchase of a mass-created ebook.

3. How can publishers and authors use NFTs to create and sell books?

Publishers and authors can now mint digital books as NFTs to produce these special editions. They can release them in drops of however many copies they like—1,000, 100 or even just a single copy—or as an unlimited supply based on a click-and-pay model. Only those who buy an NFT copy will ever be able to view it; if you tried to send the book to a friend without making a sale on the blockchain, they won’t be able to view the content. Publishers and authors can set their price—in pounds or dollars rather than cryptocurrency if they prefer.

All of this might make NFT copies sound similar to ebooks—and in many ways they are. But NFTs operate on a decentralised system and cannot be taken down or deleted from an owner’s blockchain wallet. This means readers own NFT books in a way that they do not own ebooks.

4. What would you say to anyone who is sceptical of NFTs?

A lot of the scepticism derives from misinformation that connects NFTs to the volatility of crypto markets. In reality they operate in very different ways. It’s true that a lot of NFTs and cryptocurrencies can be bought for purely speculative reasons, but an NFT book has genuine value as a product for readers and fans. In many ways it is immune from this kind of market turbulence because fans will set the price, not the crypto market. Environmentally, the technology has improved carbon efficiency. The cost to mint an NFT has also fallen substantially, making it more accessible to the mainstream.

The potential to tap into a new market in the very early stages should outweigh any wariness. NFT books target a new readership that can only grow total interest. Just as audiobooks tapped into podcasters, so NFT books can tap into blockchain enthusiasts along with more traditional fans—all at no conflict to existing print, ebook or audio formats.

5. How can BookVolts help with all of this?

We provide publishers and authors with the expertise and market platform to publish books as NFT editions and support the whole process from start to finish. Authors earn 85% of initial sales of their work through BookVolts, as well as royalties of up to 10% on all secondary sales.

For readers we have made it simple to buy and access their NFT books by building the free BookVolts reader app. This looks and feels very much like any other ebook reader, but it also comes with the tools to access bonus content across different formats. We remove any complications for blockchain newbies by setting up their wallet for them and can handle royalty payments behind the scenes if required.

James Faktor is co-founder of BookVolts. For more information, visit the BookVolts website.