There is nothing like a barrage of blockchain news to make you wonder, “Um… what’s going on here?”. That’s how people felt when the news broke about Grimes getting paid millions of dollars for NFTs, or Nyan Cat being sold as one. By the time the world figured out what was going on, Twitter’s founder had uploaded an autographed tweet for sale as an NFT. In this article, we help you understand what an NFT is and how it can positively impact your company.
What is an NFT
A digital asset that depicts real-world elements like; art, music, in-game items, and films is known as an NFT. They’re typically bought and traded online, using cryptocurrency. NFTs are one-of-a-kind and contain unique identifying codes.
Individual images can be viewed for free on the internet. So, why are people prepared to spend millions of dollars on something that might be easily screenshotted or downloaded? Because a non-financial transaction permits the buyer to keep the original object. It also comes with built-in authentication, which acts as proof of ownership. The “digital bragging rights” are almost as valuable as the item itself to collectors.
What is a smart contract?
Smart contracts are essentially programs that run when certain criteria are satisfied and are maintained on a blockchain. They’re typically used to automate the execution of an agreement so that all parties can be certain of the conclusion right away, without the need for any intermediaries or time loss.
What Makes NFTs So Valuable?
NFTs in the form of digital art, such as CryptoPunks, have amassed enormous valuations that may leave users perplexed. But, beyond digital art, NFTs provide value by proving ownership in a way that can’t be destroyed or counterfeited but can be easily transferred or sold. On the blockchain, ownership is publicly verifiable for anyone to observe.
How Businesses Can Use NFTs
NFTs are still in their infancy as commercial technology. They are currently being used by businesses to increase brand awareness, create unique experiences, and boost promotions. NFTs/smart contracts can be used to show digital ownership of physical high-ticket objects outside of NFT marketing. Here are some examples of how your company can use NFTs to drive innovation and grow;
1. Build an Engaged Community with NFTs
For years, a network of ardent NFT followers had been waiting. Those communities didn’t break into the mainstream until 2021. NFTs are now being used by intelligent marketers to engage with a new fanbase, resulting in next-level fandoms.
The National Basketball League established NBA Top Shot as an NFT community. It allows fans to purchase iconic in-game moments starring their favourite NBA players and teams. NBA Top Shot reimagines sports memorabilia, one of the oldest forms of collectables, for the internet age. NBA superfans can now own a moment in history instead of a game-worn jersey or rookie card.
Mclaren Racing of Formula One gave away free NFTs to superfans ahead of the US Grand Prix. Each NFT stands for a distinct automotive component, such as a mirror or a wheel. Fans may collect all of the pieces to create their own virtual McLaren race vehicle. These kinds of one-of-a-kind fan experiences give brands a fresh and exciting opportunity to communicate with their most devoted fans.
2. Raise Money and Awareness for Causes with NFTs
NFTs provide a unique fundraising potential if your company is affiliated with a non-profit or cause-oriented group. To interact with the blockchain community while raising awareness for your cause, your company can auction or raffle off uncommon NFTs.
The Friendship Lootbox NFT collection from Coca-Cola sold for more than $575,000. Multisensorial NFTs highlight the brand’s link with friendship in the collection, which supported The Special Olympics. The winning bidder also gets a custom-made Coca-Cola fridge in addition to the NFT collection.
3. Run Smarter Promotions & Events with NFTs
NFTs can be in the form of blockchain-based discounts, offers, and access codes that are easy to track and can’t be faked. Use the NFTs to give your community member-only promotions or to bundle collectables with new product purchases.
Streetwear brand The Hundreds is paving the way to global success. The digital art series was a huge victory, with 25,000 pieces sold in less than an hour. Holders of the NFTs use their proof of ownership to get exclusive merchandise, early access to new clothes, and VIP privileges at in-person events.
4. Track Ownership of Rare and High Ticket Physical Items
While digital art has been the most prominent application of NFTs so far, they can also be used to represent tangible goods.
Nike was granted a patent for “CryptoKicks” in 2019, allowing them to track both digital and physical sneakers on the blockchain. For high-end objects such as a Rolex watch, a Birkin bag, or a Louis Vuitton dress, this form of tracking might be utilized instead of receipts and certifications of authenticity.
5. Be an Early Pioneer of the Metaverse
NFTs are giving brands access to a whole new market: the metaverse. High-end fashion houses such as Gucci and Balenciaga have experimented with selling virtual items in various digital forms and simulated worlds.
At Under Reality, we help our clients navigate through the virtual world – by embracing new technologies – giving them a competitive advantage. We focus on driving outcomes and making a difference. Want to learn more about how we can lead your company to success? Call, email, or drop by! We have great coffee.
