Have you heard people rave about non-fungible tokens (NFTs)? Have you heard them state that they can be used in business? What are NFTs actually?
A Non Fungible Token (NFT) is a digital asset created using the blockchain and can be used to represent ownership of a unique object. Different NFTs have different identification codes and metadata that distinguish them from other NFTs. NFTs can represent objects such as images, songs, videos, and in-game items. These objects can be bought using cryptocurrencies or fiat money.
Key Components and Elements of NFTs
A peer-to-peer network with a decentralized ledger that manages transactions, stores them and allows smart contracts to be executed. Ethereum is the most widely used blockchain platform for NFT initiatives.
A special code that enables users to send and receive content. A pair of public and private keys are used to generate a number of alphanumeric characters, which is how it typically looks.
Automated programs that run when certain criteria are fulfilled. Decentralized parties and parties with no prior relationship can conduct fair transactions without the use of middlemen thanks to smart contracts.
a place where users can safely store their tokens and currencies. NFTs can be securely exchanged and stored using crypto wallets.
How NFTs Benefit Businesses
NFTs have a significant impact on business. Since the introduction of social media, we haven’t witnessed an innovation’s impact or level of excitement be this significant. It reminds me of the very beginning of Twitter or Facebook. Research and Markets project that the global NFT market will grow at a CAGR of 40.2% from $14.02 billion in 2021 to $82.43 billion in 2026. According to DappRadar.com, NFTs generated more than $1.5 billion worth of transactions in the first quarter of 2021, representing an increase of 2,627% from one quarter to the next.
It’s a great opportunity for businesses, especially those with media and entertainment assets, to start considering their own NFT strategies and how to leverage them to effectively acquire a sustainable competitive edge. Following are a few ways that NFTs can help businesses:
Driving Brand Awareness
NFTs can help your business by allowing you to link your products and services to attract more clients. More individuals are now attracted to the idea of possessing original material from their preferred businesses, knowing it cannot be reproduced, yet still feeling distinct.
Even though the hype around NFTs began in 2018, projects that create non-fungible tokens often have more recognizability among their target audience. Many companies have created NFTs to improve their marketing objectives and the value of their services and business. For instance, a digital version of your items exposes businesses to NFT fans, some of whom may not be familiar with your products. NFTs can also be included in your brand storytelling to give customers distinctive experiences and hence boost consumer engagement.
Engaging Digital Services
NFTs can also help your company by connecting to other online services. Blockchain technology is very beneficial for those who own internet enterprises. For instance, if running an online business, students can access the necessary course sites or, if they haven’t already, subscribe to courses by clicking on the NFT. Utilizing digital services also has the advantage of reducing fraud, such as copyright issues.
You can receive decentralized transactions throughout the globe using NFTs—faster and more securely than ever before—instead of going to traditional banks for funding and investments. You must sell NFTs of your company’s shares and make sure your digital logo is eye-catching to attract investors.
Real World Commerce
It may be difficult for e-commerce businesses to offer genuine goods for trade. Return fraud is a problem that NFT can successfully address, helping to protect a brand’s profit margin. The transaction is guaranteed to be transparent, authentic, and traceable thanks to NFT technology. In the future, the majority of the clothing we buy will be tokenized on a blockchain and have a unique ID. Nevertheless, they’ll also be accessible in digital versions that can interact with virtual worlds and augmented reality.
User-Generating Gaming Platform
NFT may be used quite successfully in the gaming sector. It will let players trade virtual goods as they play games, and many companies are actively pursuing it. According to DappRadar, NFTs with a focus on gaming generated $4.8 billion in revenue in 2021. Only in January of this year did blockchain games raise close to $1 billion.
The potential for profit in the gaming industry may encourage other non-blockchain-focused companies to experiment with NFTs. This can be most likely accomplished by forming partnerships with independent blockchain projects that have the technical know-how. In addition, the widespread acceptance of gaming dApps will almost probably encourage further NFT infrastructure enhancements and the development of all-encompassing solutions.
Both in the virtual and physical worlds, NFTs can be used to market digital real estate. Applications for virtual real estate are growing in popularity in games like Decentraland. A virtual environment is created and bought by participants. By using NFT, it is possible to determine who made and owned the items originally.
The digital “Mars House,” which depicts a residence encased in glass and encircled by neon lights, is another illustration of virtual real estate. Despite costing $500K, the “house” cannot be entered by the owner because it is virtual reality.
NFTs have several applications in a variety of industries, including the fashion industry. The apparel industry is seeing a rapid revolution as blockchain technology is coupled with it. Famous companies like Adidas and Dolce & Gabbana have created their own NFTs in an effort to address the rising demand for digital clothes.
Dolce & Gabbana said on September 30, 2021, that it had sold a nine-piece fashion line, which included both actual clothes and their NFT duplicates, for roughly $5.7 million.
Businesses can use non-fungible tokens to market their products, increase accessibility to their designs and works, and gain a competitive edge. For instance, with NFTs, users can buy designer bags for their video game avatars as well as one-of-a-kind works of art. Customers can inspect the ownership history of a product, verify its validity, and look up purchase information thanks to blockchain.
Art, Luxury Brands, Sports, and other Memorabilia
One of the most popular NFT use cases for 2022 is the introduction of sports collectibles, which is done in an effort to engage fans. Non-fungible tokens’ growth into the digital space presents novel opportunities that weren’t available in the real world. Users can now acquire virtual merch, tickets to different sporting events, player cards, and autographs of sports legends.
Most of the value of crypto-art and other entertainment applications comes from being able to digitally verify their ownership and validity. NFTs can offer verification in industries where fraud and counterfeiting are rampant, such as those that deal in fine art, high-end brands, or other valuables. NFTs cannot be changed or reproduced, which is useful in combating plagiarism and creative theft and assisting artists in making money from their work. Additionally, NFTs give digital art the uniqueness and scarcity that tangible art has. They can be traced back to the creator or merchant who created them. They also make it possible for anybody to view the artwork’s selling price and the number of sales.
NFTs in the Music Industry
One of the main NFT use examples you should be aware of is the integration of intangible digital assets into the music industry. Artists may now create their songs, soundbites, albums, and lyrics as NFTs thanks to blockchain technology. Software developers can create smart contracts that direct sales or a portion of each resale to artists, eliminating the need for third parties (record labels, agents, etc.).Death Row Records will become the first non-fungible token recording label in the Metaverse thanks to Snoop Dogg’s recent acquisition of the label.
Supply Chain and Logistics
NFTs’ primary role in the supply chain is to authenticate goods, guarantee their quality, and confirm their provenance. Although still in their infancy, NFTs on the blockchain are suited for logistics applications due to their immutability and transparency, which maintain the authenticity and dependability of supply chain data. Knowing where the items have been and for how long is essential in food and other perishable industries.
NFTs prevent counterfeiting, assist in tracking the flow of goods across the supply chain, and guarantee originality. Luxury fashion firms’ supply chains would be affected by this. NFTs can also provide details about each material and component in a specific product for industries like the auto industry. The use of recyclable and sustainable materials would be tracked by industries using NFTs.
NFTs in Food Industry
NFTs and Web 3.0 can help foodtech businesses sell their goods and services while raising brand awareness. Professionals in the food and beverage industries create NFT recipes, dishes, limited-edition vine bottles, and other items to interact with the public in a novel way.
For instance, in 2021 TacoBell offered 25 non-fungible tokens to commemorate the return of potatoes to the menu. As a result, the company developed NFT for the first time in the fast food industry. In less than thirty minutes, TacoBell sold out of all of its NFTs.
For companies operating in the food service industry, NFTs have many benefits. NFTs make it considerably simpler for food producers to obtain the required certifications and enhance auditing and marketing procedures. Additionally, organizations can use NFTs to acknowledge smallholders, people, and others for their role in developing a secure food supply.
Digital Customer Loyalty Program
Customers can earn rewards for their loyalty by taking part in loyalty programs. Hence, motivating them to use your services once more. Companies can provide exclusive access to information or discounts to members through membership programs.
Some companies might think about implementing a digital NFT loyalty card. Customers can download it to their phones after signing up. They scan the loyalty NFT code each time they come into your store to accrue loyalty points. You can force rewards, discounts, or blockchain tokens that can be utilized in stores when certain levels are reached.
Why You Should Consider Using NFTs in Business
In a nutshell, there are several NFT use cases outside of the art world. NFTs can help brands in a variety of industries by providing a new revenue stream, increasing consumer satisfaction, and bringing innovation. Companies will use NFTs in the near future to tokenize any real-world assets.
Even though NFTs are still in their infancy stage, as a brand, you should concentrate on how to use them in your marketing plans. You can make use of them to mint opulent designs for your goods and produce effective advertising campaigns. Additionally, you can work with NFT’s authors. As a result, the distinctiveness of NFTs gives you a chance to differentiate yourself in the market by engaging with your audience in novel ways that increase engagement and help you build your brand.