A guide to NFT pre-sales and whitelists
Before we dig through NFT whitelists and pre-sales, if you know absolutely nothing about NFTs, check our NFT Glossary.
What are pre-sales and whitelists on NFTs?
An NFT pre-sale, as the name implies, allows community members or early supporters of an NFT project to mint before the public, usually via a whitelist or mint pass.
Coin collectors can use mint passes to claim NFTs during the public sale. Because the mint pass is executed by “burning” an NFT into a specific crypto wallet, the collector is not concerned about gas price spikes.
A whitelist is used to approve a crypto wallet address for an NFT pre-sale. In a similar way to an early access list, it guarantees a certain number of crypto wallets can mint one (or more) NFT.
New NFT projects can do a pre-sale without a whitelist, but whitelists are good practice to avoid gas wars and a fair shot at minting an NFT before launching in competitive NFT marketplaces like Opensea, Magic Eden, or CNFT.
Should NFT projects do pre-sales or whitelists? 👇
The reasons to do pre-sales or a whitelist for NFT creators:
Time the market and gain traction.
Pre-sale or whitelists can help NFT projects gauge interest early on.
Whitelist spots filling up quickly is usually a sign of a successful launch, though it does not guarantee NFT longevity (more on that later). Also, full whitelists create FOMO and momentum for the public sale among non-whitelisted NFT collectors.
If whitelist signups are low or slow, projects may need to work on their vision, community, or product. Or the market is in a bear cycle. In either case, it aids NFT projects in market timing.
Reward the early NFT Community members.
Pre-sale and whitelists can help NFT creators reward early supporters.
First, by splitting the minting process into two phases, early adopters get a chance to mint one or more NFTs from their collection at a discounted or even free price.
Did you know that BAYC started at 0.08 eth each? A serum that allowed you to mint a Mutant Ape has become as valuable as the original BAYC.
(2) Whitelists encourage early supporters to help build a project's community in exchange for a slot or status. If you invite 10 people to the NFT Discord community, you get a better ranking or even a whitelist spot.
Pre-sale and whitelisting have become popular ways for new projects to grow their communities and secure future buyers.
Prevent gas wars.
Most new NFTs are created on the Ethereum blockchain, which has the highest transaction fees (also known as gas) (Solana, Cardano, Polygon, Binance Smart Chain, etc).
An NFT public sale is a gas war when a large number of NFT collectors (or bots) try to mint an NFT at the same time.
Competing collectors are willing to pay higher gas fees to prioritize their transaction and out-price others when upcoming NFT projects are hyped and very popular.
Pre-sales and whitelisting prevent gas wars by breaking the minting process into smaller batches of members or season launches.
The reasons to do pre-sales or a whitelists for NFT collectors:
How do I get on an NFT whitelist?
- Popular NFT collections act as a launchpad for other new or hyped NFT collections.
Example: Interfaces NFTs gives out 100 whitelist spots to Deadfellaz NFTs holders. Both NFT projects win. Interfaces benefit from Deadfellaz's success and brand equity.
In this case, to get whitelisted NFT collectors need to hold that specific NFT that is acting like a launchpad.
- A NFT studio or collection that launches a new NFT project and rewards previous NFT holders with whitelist spots or pre-sale access.
The whitelist requires previous NFT holders or community members.
NFT Alpha Groups are closed, small, tight-knit Discord servers where members share whitelist spots or giveaways from upcoming NFTs.
The benefit of being in an alpha group is getting information about new NFTs first and getting in on pre-sale/whitelist before everyone else.
There are some entry barriers to alpha groups, but if you're active in the NFT community, you'll eventually bump into, be invited to, or form one.
- A whitelist spot is awarded to members of an NFT community who are the most active and engaged.
This participation reward is the most democratic. To get a chance, collectors must work hard and play to their strengths.
Whitelisting participation examples:
- Raffle, games and contest: NFT Community raffles, games, and contests. To get a whitelist spot, invite 10 people to X NFT Discord community.
- Fan art: To reward those who add value and grow the community by whitelisting the best fan art and/or artists is only natural.
- Giveaways: Lucky number crypto wallet giveaways promoted by an NFT community. To grow their communities and for lucky collectors, NFT projects often offer free NFT.
- Activate your voice in the NFT Discord Community. Use voice channels to get NFT teams' attention and possibly get whitelisted.
The advantage of whitelists or NFT pre-sales.
Chainalysis's NFT stats quote is the best answer:
“Whitelisting isn’t just some nominal reward — it translates to dramatically better investing results. OpenSea data shows that users who make the whitelist and later sell their newly-minted NFT gain a profit 75.7% of the time, versus just 20.8% for users who do so without being whitelisted. Not only that, but the data suggests it’s nearly impossible to achieve outsized returns on minting purchases without being whitelisted.” Full report here.
Sure, it's not all about cash. However, any NFT collector should feel secure in their investment by owning a piece of a valuable and thriving NFT project. These stats help collectors understand that getting in early on an NFT project (via whitelist or pre-sale) will yield a better and larger return.
The downsides of pre-sales & whitelists for NFT creators.
Pre-sales and whitelist can cause issues for NFT creators and collectors.
NFT flippers
NFT collectors who only want to profit from early minting (pre-sale) or low mint cost (via whitelist). To sell the NFT in a secondary market like Opensea or Solanart, flippers go after the discounted price.
For example, a 1000 Solana NFT collection allows 100 people to mint 1 Solana NFT at 0.25 SOL. The public sale price for the remaining 900 NFTs is 1 SOL. If an NFT collector sells their discounted NFT for 0.5 SOL, the secondary market floor price is below the public mint.
This may deter potential NFT collectors. Furthermore, without a cap in the pre-sale minting phase, flippers can get as many NFTs as possible to sell for a profit, dumping them in secondary markets and driving down the floor price.
Hijacking NFT sites, communities, and pre-sales phase
People try to scam the NFT team and their community by creating oddly similar but fake websites, whitelist links, or NFT's Discord channel.
Established and new NFT projects must be vigilant to always make sure their communities know which are the official links, how a whitelist or pre-sale rules and how the team will contact (or not) community members.
Another way to avoid the scams around the pre-sale phase, NFT projects opt to create a separate mint contract for the whitelisted crypto wallets and then another for the public sale phase.
Scam NFT projects
We've seen a lot of mid-mint or post-launch rug pulls, indicating that some bad NFT projects are trying to scam NFT communities and marketplaces for quick profit. What happened to Magic Eden's launchpad recently will help you understand the scam.
We discussed the benefits and drawbacks of NFT pre-sales and whitelists for both projects and collectors.
Finally, some practical tools and tips for finding new NFTs 👇
Tools & resources to find new NFT on pre-sale or to get on a whitelist:
In order to never miss an update, important pre-sale dates, or a giveaway, create a Tweetdeck or Tweeten Twitter dashboard with hyped NFT project pages, hashtags ( #NFTGiveaways , #NFTCommunity), or big NFT influencers.
Search for upcoming NFT launches that have been vetted by the marketplace and try to get whitelisted before the public launch.
Save-timing discovery platforms like sealaunch.xyz for NFT pre-sales and upcoming launches. How can we help 100x NFT collectors get projects? A project's official social media links, description, pre-sale or public sale dates, price and supply. We're also working with Dune on NFT data analysis to help NFT collectors make better decisions.
Don't invest what you can't afford to lose because a) the project may fail or become rugged. Find NFTs projects that you want to be a part of and support.
Read original post here
More on NFTs & Art
Jayden Levitt
3 years ago
Starbucks' NFT Project recently defeated its rivals.
The same way Amazon killed bookstores. You just can’t see it yet.
Shultz globalized coffee. Before Starbucks, coffee sucked.
All accounts say 1970s coffee was awful.
Starbucks had three stores selling ground Indonesian coffee in the 1980s.
What a show!
A year after joining the company at 29, Shultz traveled to Italy for R&D.
He noticed the coffee shops' sense of theater and community and realized Starbucks was in the wrong business.
Integrating coffee and destination created a sense of community in the store.
Brilliant!
He told Starbucks' founders about his experience.
They disapproved.
For two years.
Shultz left and opened an Italian coffee shop chain like any good entrepreneur.
Starbucks ran into financial trouble, so the founders offered to sell to Shultz.
Shultz bought Starbucks in 1987 for $3.8 million, including six stores and a payment plan.
Starbucks is worth $100.79Billion, per Google Finance.
26,500 times Shultz's initial investment
Starbucks is releasing its own NFT Platform under Shultz and his early Vision.
This year, Starbucks Odyssey launches. The new digital experience combines a Loyalty Rewards program with NFT.
The side chain Polygon-based platform doesn't require a Crypto Wallet. Customers can earn and buy digital assets to unlock incentives and experiences.
They've removed all friction, making it more immersive and convenient than a coffee shop.
Brilliant!
NFTs are the access coupon to their digital community, but they don't highlight the technology.
They prioritize consumer experience by adding non-technical users to Web3. Their collectables are called journey stamps, not NFTs.
No mention of bundled gas fees.
Brady Brewer, Starbucks' CMO, said;
“It happens to be built on blockchain and web3 technologies, but the customer — to be honest — may very well not even know that what they’re doing is interacting with blockchain technology. It’s just the enabler,”
Rewards members will log into a web app using their loyalty program credentials to access Starbucks Odyssey. They won't know about blockchain transactions.
Starbucks has just dealt its rivals a devastating blow.
It generates more than ten times the revenue of its closest competitor Costa Coffee.
The coffee giant is booming.
Starbucks is ahead of its competitors. No wonder.
They have an innovative, adaptable leadership team.
Starbucks' DNA challenges the narrative, especially when others reject their ideas.
I’m off for a cappuccino.
Eric Esposito
3 years ago
$100M in NFT TV shows from Fox
Fox executives will invest $100 million in NFT-based TV shows. Fox brought in "Rick and Morty" co-creator Dan Harmon to create "Krapopolis"
Fox's Blockchain Creative Labs (BCL) will develop these NFT TV shows with Bento Box Entertainment. BCL markets Fox's WWE "Moonsault" NFT.
Fox said it would use the $100 million to build a "creative community" and "brand ecosystem." The media giant mentioned using these funds for NFT "benefits."
"Krapopolis" will be a Greek-themed animated comedy, per Rarity Sniper. Initial reports said NFT buyers could collaborate on "character development" and get exclusive perks.
Fox Entertainment may drop "Krapopolis" NFTs on Ethereum, according to new reports. Fox says it will soon release more details on its NFT plans for "Krapopolis."
Media Giants Favor "NFT Storytelling"
"Krapopolis" is one of the largest "NFT storytelling" experiments due to Dan Harmon's popularity and Fox Entertainment's reach. Many celebrities have begun exploring Web3 for TV shows.
Mila Kunis' animated sitcom "The Gimmicks" lets fans direct the show. Any "Gimmick" NFT holder could contribute to episode plots.
"The Gimmicks" lets NFT holders write fan fiction about their avatars. If show producers like what they read, their NFT may appear in an episode.
Rob McElhenney recently launched "Adimverse," a Web3 writers' community. Anyone with a "Adimverse" NFT can collaborate on creative projects and share royalties.
Many blue-chip NFTs are appearing in movies and TV shows. Coinbase will release Bored Ape Yacht Club shorts at NFT. NYC. Reese Witherspoon is working on a World of Women NFT series.
PFP NFT collections have Hollywood media partners. Guy Oseary manages Madonna's World of Women and Bored Ape Yacht Club collections. The Doodles signed with Billboard's Julian Holguin and the Cool Cats with CAA.
Web3 and NFTs are changing how many filmmakers tell stories.
1eth1da
3 years ago
6 Rules to build a successful NFT Community in 2022
Too much NFT, Discord, and shitposting.
How do you choose?
How do you recruit more members to join your NFT project?
In 2021, a successful NFT project required:
Monkey/ape artwork
Twitter and Discord bot-filled
Roadmap overpromise
Goal was quick cash.
2022 and the years after will change that.
These are 6 Rules for a Strong NFT Community in 2022:
THINK LONG TERM
This relates to roadmap planning. Hype and dumb luck may drive NFT projects (ahem, goblins) but rarely will your project soar.
Instead, consider sustainability.
Plan your roadmap based on your team's abilities.
Do what you're already doing, but with NFTs, make it bigger and better.
You shouldn't copy a project's roadmap just because it was profitable.
This will lead to over-promising, team burnout, and an RUG NFT project.
OFFER VALUE
Building a great community starts with giving.
Why are musicians popular?
Because they offer entertainment for everyone, a random person becomes a fan, and more fans become a cult.
That's how you should approach your community.
TEAM UP
A great team helps.
An NFT project could have 3 or 2 people.
Credibility trumps team size.
Make sure your team can answer community questions, resolve issues, and constantly attend to them.
Don't overwork and burn out.
Your community will be able to recognize that you are trying too hard and give up on the project.
BUILD A GREAT PRODUCT
Bored Ape Yacht Club altered the NFT space.
Cryptopunks transformed NFTs.
Many others did, including Okay Bears.
What made them that way?
Because they answered a key question.
What is my NFT supposed to be?
Before planning art, this question must be answered.
NFTs can't be just jpegs.
What does it represent?
Is it a Metaverse-ready project?
What blockchain are you going to be using and why?
Set some ground rules for yourself. This helps your project's direction.
These questions will help you and your team set a direction for blockchain, NFT, and Web3 technology.
EDUCATE ON WEB3
The more the team learns about Web3 technology, the more they can offer their community.
Think tokens, metaverse, cross-chain interoperability and more.
BUILD A GREAT COMMUNITY
Several projects mistreat their communities.
They treat their community like "customers" and try to sell them NFT.
Providing Whitelists and giveaways aren't your only community-building options.
Think bigger.
Consider them family and friends, not wallets.
Consider them fans.
These are some tips to start your NFT project.
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Sam Hickmann
3 years ago
Token taxonomy: Utility vs Security vs NFT
Let's examine the differences between the three main token types and their functions.
As Ethereum grew, the term "token" became a catch-all term for all assets built on the Ethereum blockchain. However, different tokens were grouped based on their applications and features, causing some confusion. Let's examine the modification of three main token types: security, utility, and non-fungible.
Utility tokens
They provide a specific utility benefit (or a number of such). A utility token is similar to a casino chip, a table game ticket, or a voucher. Depending on the terms of issuing, they can be earned and used in various ways. A utility token is a type of token that represents a tool or mechanism required to use the application in question. Like a service, a utility token's price is determined by supply and demand. Tokens can also be used as a bonus or reward mechanism in decentralized systems: for example, if you like someone's work, give them an upvote and they get a certain number of tokens. This is a way for authors or creators to earn money indirectly.
The most common way to use a utility token is to pay with them instead of cash for discounted goods or services.
Utility tokens are the most widely used by blockchain companies. Most cryptocurrency exchanges accept fees in native utility tokens.
Utility tokens can also be used as a reward. Companies tokenize their loyalty programs so that points can be bought and sold on blockchain exchanges. These tokens are widely used in decentralized companies as a bonus system. You can use utility tokens to reward creators for their contributions to a platform, for example. It also allows members to exchange tokens for specific bonuses and rewards on your site.
Unlike security tokens, which are subject to legal restrictions, utility tokens can be freely traded.
Security tokens
Security tokens are essentially traditional securities like shares, bonds, and investment fund units in a crypto token form.
The key distinction is that security tokens are typically issued by private firms (rather than public companies) that are not listed on stock exchanges and in which you can not invest right now. Banks and large venture funds used to be the only sources of funding. A person could only invest in private firms if they had millions of dollars in their bank account. Privately issued security tokens outperform traditional public stocks in terms of yield. Private markets grew 50% faster than public markets over the last decade, according to McKinsey Private Equity Research.
A security token is a crypto token whose value is derived from an external asset or company. So it is governed as security (read about the Howey test further in this article). That is, an ownership token derives its value from the company's valuation, assets on the balance sheet, or dividends paid to token holders.
Why are Security Tokens Important?
Cryptocurrency is a lucrative investment. Choosing from thousands of crypto assets can mean the difference between millionaire and bankrupt. Without security tokens, crypto investing becomes riskier and generating long-term profits becomes difficult. These tokens have lower risk than other cryptocurrencies because they are backed by real assets or business cash flows. So having them helps to diversify a portfolio and preserve the return on investment in riskier assets.
Security tokens open up new funding avenues for businesses. As a result, investors can invest in high-profit businesses that are not listed on the stock exchange.
The distinction between utility and security tokens isn't as clear as it seems. However, this increases the risk for token issuers, especially in the USA. The Howey test is the main pillar regulating judicial precedent in this area.
What is a Howey Test?
An "investment contract" is determined by the Howey Test, a lawsuit settled by the US Supreme Court. If it does, it's a security and must be disclosed and registered under the Securities Act of 1933 and the Securities Exchange Act of 1934.
If the SEC decides that a cryptocurrency token is a security, a slew of issues arise. In practice, this ensures that the SEC will decide when a token can be offered to US investors and if the project is required to file a registration statement with the SEC.
Due to the Howey test's extensive wording, most utility tokens will be classified as securities, even if not intended to be. Because of these restrictions, most ICOs are not available to US investors. When asked about ICOs in 2018, then-SEC Chairman Jay Clayton said they were securities. The given statement adds to the risk. If a company issues utility tokens without registering them as securities, the regulator may impose huge fines or even criminal charges.
What other documents regulate tokens?
Securities Act (1993) or Securities Exchange Act (1934) in the USA; MiFID directive and Prospectus Regulation in the EU. These laws require registering the placement of security tokens, limiting their transfer, but protecting investors.
Utility tokens have much less regulation. The Howey test determines whether a given utility token is a security. Tokens recognized as securities are now regulated as such. Having a legal opinion that your token isn't makes the implementation process much easier. Most countries don't have strict regulations regarding utility tokens except KYC (Know Your Client) and AML (Anti Money-Laundering).
As cryptocurrency and blockchain technologies evolve, more countries create UT regulations. If your company is based in the US, be aware of the Howey test and the Bank Secrecy Act. It classifies UTs and their issuance as money transmission services in most states, necessitating a license and strict regulations. Due to high regulatory demands, UT issuers try to avoid the United States as a whole. A new law separating utility tokens from bank secrecy act will be introduced in the near future, giving hope to American issuers.
The rest of the world has much simpler rules requiring issuers to create basic investor disclosures. For example, the latest European legislation (MiCA) allows businesses to issue utility tokens without regulator approval. They must also prepare a paper with all the necessary information for the investors.
A payment token is a utility token that is used to make a payment. They may be subject to electronic money laws.
Because non-fungible tokens are a new instrument, there is no regulating paper yet. However, if the NFT is fractionalized, the smaller tokens acquired may be seen as securities.
NFT Tokens
Collectible tokens are also known as non-fungible tokens. Their distinctive feature is that they denote unique items such as artwork, merch, or ranks. Unlike utility tokens, which are fungible, meaning that two of the same tokens are identical, NFTs represent a unit of possession that is strictly one of a kind. In a way, NFTs are like baseball cards, each one unique and valuable.
As for today, the most recognizable NFT function is to preserve the fact of possession. Owning an NFT with a particular gif, meme, or sketch does not transfer the intellectual right to the possessor, but is analogous to owning an original painting signed by the author.
Collectible tokens can also be used as digital souvenirs, so to say. Businesses can improve their brand image by issuing their own branded NFTs, which represent ranks or achievements within the corporate ecosystem. Gamifying business ecosystems would allow people to connect with a brand and feel part of a community.
Which type of tokens is right for you as a business to raise capital?
For most businesses, it's best to raise capital with security tokens by selling existing shares to global investors. Utility tokens aren't meant to increase in value over time, so leave them for gamification and community engagement. In a blockchain-based business, however, a utility token is often the lifeblood of the operation, and its appreciation potential is directly linked to the company's growth. You can issue multiple tokens at once, rather than just one type. It exposes you to various investors and maximizes the use of digital assets.
Which tokens should I buy?
There are no universally best tokens. Their volatility, industry, and risk-reward profile vary. This means evaluating tokens in relation to your overall portfolio and personal preferences: what industries do you understand best, what excites you, how do you approach taxes, and what is your planning horizon? To build a balanced portfolio, you need to know these factors.
Conclusion
The three most common types of tokens today are security, utility, and NFT. Security tokens represent stocks, mutual funds, and bonds. Utility tokens can be perceived as an inside-product "currency" or "ignition key" that grants you access to goods and services or empowers with other perks. NFTs are unique collectible units that identify you as the owner of something.
Mangu Solutions
3 years ago
Growing a New App to $15K/mo in 6 Months [SaaS Case Study]
Discover How We Used Facebook Ads to Grow a New Mobile App from $0 to $15K MRR in Just 6 Months and Our Strategy to Hit $100K a Month.
Our client introduced a mobile app for Poshmark resellers in December and wanted as many to experience it and subscribe to the monthly plan.
An Error We Committed
We initiated a Facebook ad campaign with a "awareness" goal, not "installs." This sent them to a landing page that linked to the iPhone App Store and Android Play Store. Smart, right?
We got some installs, but we couldn't tell how many came from the ad versus organic/other channels because the objective we chose only reported landing page clicks, not app installs.
We didn't know which interest groups/audiences had the best cost per install (CPI) to optimize and scale our budget.
After spending $700 without adequate data (installs and trials report), we stopped the campaign and worked with our client's app developer to set up app events tracking.
This allowed us to create an installs campaign and track installs, trials, and purchases (in some cases).
Finding a Successful Audience
Once we knew what ad sets brought in what installs at what cost, we began optimizing and testing other interest groups and audiences, growing the profitable low CPI ones and eliminating the high CPI ones.
We did all our audience testing using an ABO campaign (Ad Set Budget Optimization), spending $10 to $30 on each ad set for three days and optimizing afterward. All ad sets under $30 were moved to a CBO campaign (Campaign Budget Optimization).
We let Facebook's AI decide how much to spend on each ad set, usually the one most likely to convert at the lowest cost.
If the CBO campaign maintains a nice CPI, we keep increasing the budget by $50 every few days or duplicating it sometimes in order to double the budget. This is how we've scaled to $400/day profitably.
Finding Successful Creatives
Per campaign, we tested 2-6 images/videos. Same ad copy and CTA. There was no clear winner because some images did better with some interest groups.
The image above with mail packages, for example, got us a cheap CPI of $9.71 from our Goodwill Stores interest group but, a high $48 CPI from our lookalike audience. Once we had statistically significant data, we turned off the high-cost ad.
New marketers who are just discovering A/B testing may assume it's black and white — winner and loser. However, Facebook ads' machine learning and reporting has gotten so sophisticated that it's hard to call a creative a flat-out loser, but rather a 'bad fit' for some audiences, and perfect for others.
You can see how each creative performs across age groups and optimize.
How Many Installs Did It Take Us to Earn $15K Per Month?
Six months after paying $25K, we got 1,940 app installs, 681 free trials, and 522 $30 monthly subscriptions. 522 * $30 gives us $15,660 in monthly recurring revenue (MRR).
Next, what? $100K per month
The conversation above is with the app's owner. We got on a 30-minute call where I shared how I plan to get the app to be making $100K a month like I’ve done for other businesses.
Reverse Engineering $100K
Formula:
For $100K/month, we need 3,334 people to pay $30/month. 522 people pay that. We need 2,812 more paid users.
522 paid users from 1,940 installs is a 27% conversion rate. To hit $100K/month, we need 10,415 more installs. Assuming...
With a $400 daily ad spend, we average 40 installs per day. This means that if everything stays the same, it would take us 260 days (around 9 months) to get to $100K a month (MRR).
Conclusion
You must market your goods to reach your income objective (without waiting forever). Paid ads is the way to go if you hate knocking on doors or irritating friends and family (who aren’t scalable anyways).
You must also test and optimize different angles, audiences, interest groups, and creatives.
Thomas Smith
3 years ago
ChatGPT Is Experiencing a Lightbulb Moment
Why breakthrough technologies must be accessible
ChatGPT has exploded. Over 1 million people have used the app, and coding sites like Stack Overflow have banned its answers. It's huge.
I wouldn't have called that as an AI researcher. ChatGPT uses the same GPT-3 technology that's been around for over two years.
More than impressive technology, ChatGPT 3 shows how access makes breakthroughs usable. OpenAI has finally made people realize the power of AI by packaging GPT-3 for normal users.
We think of Thomas Edison as the inventor of the lightbulb, not because he invented it, but because he popularized it.
Going forward, AI companies that make using AI easy will thrive.
Use-case importance
Most modern AI systems use massive language models. These language models are trained on 6,000+ years of human text.
GPT-3 ate 8 billion pages, almost every book, and Wikipedia. It created an AI that can write sea shanties and solve coding problems.
Nothing new. I began beta testing GPT-3 in 2020, but the system's basics date back further.
Tools like GPT-3 are hidden in many apps. Many of the AI writing assistants on this platform are just wrappers around GPT-3.
Lots of online utilitarian text, like restaurant menu summaries or city guides, is written by AI systems like GPT-3. You've probably read GPT-3 without knowing it.
Accessibility
Why is ChatGPT so popular if the technology is old?
ChatGPT makes the technology accessible. Free to use, people can sign up and text with the chatbot daily. ChatGPT isn't revolutionary. It does it in a way normal people can access and be amazed by.
Accessibility isn't easy. OpenAI's Sam Altman tweeted that opening ChatGPT to the public increased computing costs.
Each chat costs "low-digit cents" to process. OpenAI probably spends several hundred thousand dollars a day to keep ChatGPT running, with no immediate business case.
Academic researchers and others who developed GPT-3 couldn't afford it. Without resources to make technology accessible, it can't be used.
Retrospective
This dynamic is old. In the history of science, a researcher with a breakthrough idea was often overshadowed by an entrepreneur or visionary who made it accessible to the public.
We think of Thomas Edison as the inventor of the lightbulb. But really, Vasilij Petrov, Thomas Wright, and Joseph Swan invented the lightbulb. Edison made technology visible and accessible by electrifying public buildings, building power plants, and wiring.
Edison probably lost a ton of money on stunts like building a power plant to light JP Morgan's home, the NYSE, and several newspaper headquarters.
People wanted electric lights once they saw their benefits. By making the technology accessible and visible, Edison unlocked a hugely profitable market.
Similar things are happening in AI. ChatGPT shows that developing breakthrough technology in the lab or on B2B servers won't change the culture.
AI must engage people's imaginations to become mainstream. Before the tech impacts the world, people must play with it and see its revolutionary power.
As the field evolves, companies that make the technology widely available, even at great cost, will succeed.
OpenAI's compute fees are eye-watering. Revolutions are costly.