Facebook, sorry, Meta CEO Mark Zuckerberg announced yesterday that in the coming months it will become possible to mine and trade NFTs on Instagram. It is an attempt by Zuckerberg to stay relevant to young people and appease the stock markets, dwarfed by TikTok on the one hand and, on the other, the huge market value of NFT marketplaces like OpenSea.
Engadget reports this about the session with Zuckerberg at the leading festival SXSW:
"We're working on bringing NFTs to Instagram in the near term," he said. He didn't detail exactly how that would take shape, but suggested people would be able to show off their existing NFTs and potentially mint new ones. "I'm not ready to kind of announce exactly what that's going to be today. But over the next several months, the ability to bring some of your NFTs in, hopefully over time be able to mint things within that environment."
It was never a poet.
SXSW has increasingly changed from the springboard where revolutionary tech talents take the axe to the carrot of ruling powers such as the Facebook empire, into a kind of bar-dancing where mom and dad also have a dance after Friday afternoon bingo. That can be a lot of fun, and Uncle Frackers himself has organized regular dings during SXSW. But it was no coincidence that the session with Zuckerberg, who likes to present himself as a great technological visionary, was also open to convention attendees with a film and music badge, with the recommended knowledge level: "beginner.
Meta's biggest money-maker was always Facebook, which has now turned into a kind of online SBS6 for people over 50. Instagram is also moving hard in that direction, while Whatsapp remains difficult to monetize. The playful vistas Zuckerberg paints about the Metaverse have already spooked investors: this year, FB (short for Meta, cough) shares fell as much as 43%. That came after Meta estimated revenue figures for 2022 much lower than the market expected, primarily a result of Apple's tightened privacy measures. In short, Apple is making it harder for Meta to track and stalk you everywhere online.
With that have come some new problems for Zuckerberg. First, it is clear that his weapon in the battle for youth, Instagram, is being completely outpaced by TikTok. Every successful feature of TikTok is copied by Instagram while it itself hardly introduces any innovations that TikTok adopts. Instagram also turns out not to yield good conversions for advertisers, in other words: nice for branding like a billboard along a busy highway, but not a marketplace where people make transactions on which Zuckerberg pockets a percentage each time.
But there is a fast-growing marketplace achieving huge revenues and good margins: OpenSea, the marketplace for NFTs that was recently valued at over $13 billion. Zuckerberg has obviously followed the rise of TikTok and OpenSea closely and hopes to kill two birds with one stone with NFTs on Instagram. That desire is not surprising, as young TikTok users are largely crypto users and the primary target audience for NFTs. TikTok is a meeting place for the digital vanguard, just as OpenSea is for traders in NFTs.
Zuckerberg's announcement about NFTs on Instagram is very reminiscent of the puffed-up marketing copy he churned out about Libra. That was that crypto currency from Meta that was going to be the whole thing and died a quiet death within three years. For as unimaginably long as it seems, Libra was only announced three years ago, in 2019, and has already been buried without fanfare.
It's not to say that NFTs on Instagram are definitely going to fail, just that all the conditions for total failure are there: a poorly converting medium for transactions, an aging target audience that comes for very different things than NFTs, and stronger competitors on the chessboards where it counts: the active youth at TikTok and the NFT merchants at OpenSea. The wait is for TikTok to do something with NFTs. Perhaps in a partnership with OpenSea, the dream scenario for traders who go short on Meta.
No, the more important crypto and NFT news of the past few days was elsewhere than Meta. Singapore announced it was going to impose income tax on NFTs, very pragmatic and logical. It shows how big NFTs already are in Southeast Asia. And Consensys, maker of tools like Metamask, raised $450 million from investors. Now if Consensys would use those tokens to develop user-friendly crypto wallets, the breakthrough of crypto and NFTs to the general public is near.