NFTS – What Are They and Why Should You Care?
NFTs are making massive waves in the business world. Since the advent of social media, we haven’t seen this much excitement about technological innovation.
Non-fungible tokens, also known as NFTs, are the biggest hype item in the crypto world. Collins Dictionary listed ‘NFT’ as the 2021 word of the year.
But what are NFTs, and why should your business care?
A Beginner’s Guide to NFTs
NFT is an acronym for non-fungible tokens. Of these words, two are in everyday use, but a relatively obscure term separates them. The dictionary definition of “fungible” states that it relates to something replaceable by another thing of equal value.
What this means is if something is termed non-fungible, then it means that the item is unique and irreplaceable. For a long time, businesses have known about the value of limited-edition products, but they take the concept to a new level when they make an item irreplaceable.
Principally, an NFT allows your business to create a digital record that proves ownership of an item or attendance and even allows it to transfer unique experiences to your customers.
What’s more, NFTs are instant and transparent. There is a smart contract coded into the token that cannot be altered or edited, so your business can always see the return any time the token is traded or sold. When people buy an NFT and later sell it to a third party, your business will receive a percentage of the token’s value as stated in the smart contract.
Thanks to NFTs, your business can also offer its audience the opportunity to buy into its community. This technology represents an opportunity to connect deeper to clients than purchasing a subscription. When clients buy into your community, they essentially gain part ownership of the community.
The Arts Are Driving the Growth of NFTs
NFT provides massive scope for artists, and it comes as no surprise that the arts lead the way in the adoption of the technology.
Musicians are leading the FFT movement, with the Kings of Leon band generally credited with making the tokens known to a large audience. In March 2021, the band attached several NFTs to its latest album, When You See Yourself. It means that one-off copies of the album’s release and front row seats to the band’s concerts are among the perks made available to buyers of the NFTs.
The success of the band’s NFT release shows the potential for businesses in the arts sector to harness the power of non-fungible tokens. Record labels can release limited edition CDs or vinyl editions or offer personalized experiences to fans attending concerts and live performances.
Additionally, authors, sculptors, and painters can follow the same example. To a large extent, art is already unique, allowing for the easy creation of unique experiences for fans that the artists can monetize.
Tokens In the Sports World
Is there any fan in the world who wouldn’t want to enjoy an unforgettable moment with their favorite sport? Any business involved in sport and its associated industries should pay close attention to the potential NFT market. What’s more, many top sportspeople have the opportunity to release unique items for their fanbase to purchase.
The opportunities are endless; they could offer a match-worn shirt from a star in the NBA finals series, or it could be the boot that scored the winning goal in the soccer World Cup final. The potential is only limited by the imagination of the sportsperson or team’s PR team. As long as there is a unique product, they can offer a one-off product through an NFT.
What’s more, sports clubs and teams could issue their fans with unique, one-of-a-kind matchday experiences. For instance, supporters could bid for a token to allow them to sit in the dugout during a matchday.
If a business is associated with sport, there are additional opportunities to benefit from NFTs. Companies that sponsor sports teams or events and even betting operators could get involved. There are limitless possibilities for individuals with accounts at online casinos and sportsbooks. Besides playing for cash prizes, they could also land a unique experience or product attached to the world’s most prominent players and teams.
Big Brands Join In
As you can see, it is easy to see how a famous face or an artist producing unique pieces can benefit from NFTs. They already have profiles tailor-made for the technology, but what about regular industry and commerce?
Although the connection to large businesses may not become immediately apparent, it is all about finding anything within the relevant industry and making it unique and marketable.
In the case of Taco Bell, it auctioned a set of NFT gifs that attracted significant sums of money. Best of all, the fast-food chain donated all the proceeds from the sale to charity, helping boost its brand profile.
Additionally, leading fashion brands have released exclusive collections and auctioned unique logos of their brands.
How NFTs Can Benefit Traditional Small Businesses
There is a lot of advice online about how businesses can benefit from NFTs. However, most of the advice regards big companies and artists. It’s well and good auctioning off your latest single as a musician or your logo if you are Adidas, but what about the suburban retailer who renovates bathrooms and doesn’t trade outside their region?
In this case, it is certainly not as straightforward, but the good news is that there are options for businesses that think out of the box. For instance, if a business is in property development or real estate, they may design a house with unique features and auction it off.
A company in the car industry could follow the same principle and offer customers a one-off model that they would not replicate.
As long as a business can develop and release a unique product, it can make it unique and issue an NFT on it.
The Final Word
Overall, NFTs offer a way for your business to get an edge over your competition. All you need to do is think of a one-of-a-kind service or product to harness the power of NFTs.
NFTs allow your business to earn additional revenue through unique experiences that it creates for your audience and clients without going through your traditional sales funnel.
(Written with the support of the Smart Hustle editorial team)