What Are NFTS? And What Do They Mean for Your Business?
NFTs are Non-fungible tokens. Capeesh? Neither did we at first.
At this point, you’ve undoubtedly heard of cryptocurrencies. Many high-profile companies, like Apple and Tesla, are increasingly discussing their adoption of the popular market-leading coin, Bitcoin. All while people like you and I ride the rollercoaster of these and other less popular coins.
Maybe you’ve even got in on some of the action – is anyone still taking DogeCoin to the moon?
2 Billion dollars worth of NFTs were sold in the first quarter of 2021. $230 million alone from NBA top shot.
Well, NFTs are similar. Non-fungible means these are unique items that cannot be replicated. Each token is an identifiable data point representing a digital asset on either the Ethereum or Solana blockchain. Similar to some cryptocurrencies, these data points are listed on the blockchain, where their exchange and ownership can be monitored. Unlike cryptocurrencies, these items cannot replace one another on a 1:1 ratio like Bitcoin or Dogecoin might. In this sense, it’s easier to think of them as super collectible trading cards. Which is exactly what many people have been doing.
NFTs’ popularity really skyrocketed earlier in 2021 with the introduction of the NBA Top Shot trading platform. NBA Top Shot became a place where loyal fans were able to purchase unique copies of their favourite NBA moments. Since then, other NFT projects featuring original artwork have surpassed the success of NBA Top Shot by offering real-life and virtual benefits to their owners.
NFTs can take many forms and command high prices. In the NBA’s case, they are selling photos and videos. Many of the more iconic moments pulled in six figures for a single token. In fact, at the time of writing, there are two moments listed for $1M.
And this isn’t a rare case. Other successful NFT projects, such as the Bored Ape Yacht Club, will run you over USD $100,000 for even their most common assets. High-profile celebrities and athletes have proudly boasted their investment in the project by updating their social profiles to bear their unique NFTs.
Stephen Curry, Point Guard of the Golden State Warriors, was among the first of many celebrities to bear these high-value images on social media. So much so that Twitter recently announced they will introduce features to verify ownership of NFTs used as profile images.
So clearly, there’s a good business case for these new digital tokens, but what does it mean for your business? Depending on who you are and what you do, there may be a few use cases for you.
- You have a loyal following who value your brand
- You create amazing digital content
- You want a unique item to showcase your brand
So, you have a loyal brand following…
This may be a good opportunity to build even more loyalty amongst your fan base by creating unique digital assets for them to collect and trade.
Many of the selling platforms, such as OpenSea and Super Rare, use an auction system that allows you to set your minimum price, but there’s no telling what your fans may be willing to pay. Creator-centric platforms like Super Rare give creators a small royalty off each consecutive sale of their asset, allowing artists to earn a passive income similar to streaming platforms like Spotify or Apple Music. This ensures the artist will always get a fair share of the value from the art they created.
If your following is big enough, there might be sufficient demand to start your own trading network… Who’s building the next NBA Top Shot?
What’s that? Are you an amazing content creator?
You’re in luck! NFTs were practically made for you. This technology can help minimize concerns of fraud or theft as the details of the NFT are unalterable, so the asset will be inextricably connected to you. One great example of this came from a Canadian photographer, Cath Simard. Cath recently launched the #freehawaii project, which included a minted version of her most famous image which has been widely stolen across the internet.
This may be your chance to strike it rich or enjoy the extra cash from your new nearly-passive income stream. These trading platforms will also give you an opportunity to showcase your art to different audiences and maybe score some new fans. Why not give it a shot?
A few things to note before you start:
- Each platform charges a different fee for minting your artwork.
- Smart contracts** will vary depending on the platforms you choose. While some platforms offer royalties, many do not. Find a smart contract that serves your needs best.
**A smart contract is an agreement where the terms of the transaction are written down in code on the Ethereum blockchain. The Ethereum blockchain then continuously checks for when the terms are met and once they are, the agreement is set in action without the need for any attorneys, lawyers, or courts.
You’re a tech-savvy firm with a zest for creativity.
You’re our kind of people!
You can capitalize on the current buzz around NFTs and still be a relatively early entrant to the market. Join the likes of Adidas and Budweiser by turning your amazing digital artwork into minted NFTs on the blockchain. Or dream bigger and create your own game. Projects such as Wolf Game offer owners of their NFTs to take part in online games where they can earn cryptocurrencies and connect with others.
While the current use of NFTs might seem limited, their true potential is endless. Put those creative minds to use and see what other great ideas you can think up.
So, should you dive in on this hot trend and start making some waves in the NFT pool?
Given their lack of regulation, you can expect the crypto markets to continue fluctuating. Additionally, many more traditional investors question the relative stability and sustainability of the market. For these reasons, NFTs might not be the most enticing opportunity for all brands.
But if you’re looking to hedge a bet on some new up-and-coming technologies, truly believe in the potential of NFTs and cryptocurrencies, or want to capitalize on a hot trend to promote your brand, this might be a perfect time to jump into the NFT market.
As with most new technologies, only time will tell if NFTs are robust enough to stand up against other technologies and regulations, or if they’ll be another technological fad. Either way, we are certainly excited to continue spectating on the NFT market.
Are you getting in on the NFT action?
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