NFTs ARE THE FUTURE
In recent years, Non-Fungible Tokens (NFTs) have emerged as a new way for businesses to monetize digital content. NFTs have really gained popularity with artists, musicians, video game developers, and other creators because of the ease of transferability between users, and they give users an authentic and transparent way to sell and collect digital assets. But, the big question circulating many communities is, how can they help businesses generate revenue?
WHAT ARE NON-FUNGIBLE-TOKENS (NFTs)?
Non-Fungible Tokens (NFTs) are digital assets that are stored on a blockchain network. NFTs are unique and can represent a multitude of specific items, such as digital art, music, videos, in-game assets, etc., which are unlike cryptocurrencies. Cryptocurr
encies and NFTs are both on the blockchain, but unlike cryptocurrencies, NFTs have a uniqueness about each one whether that is the picture on them or the number associated with that particular blockchain item. In other words, if an individual tried to swap one Bitcoin for another Bitcoin, there would be no loss or gain on the transfer because both coins are always equal to one another. However, when one possesses and/or transfers an NFT for either money or another NFT, the value of the transfer is completely dependent upon the uniqueness of the NFT, similar to how one pays more money for a piece of art from Monet or a Picasso over an artwork done by Maria Esmar.
WHY USE NFTs INSTEAD OF REAL ART?
NFTs are created using smart contracts and these contracts contain the metadata of the NFT, including its unique identifier, ownership history, and other attributes. Because these unique pieces of art are stored on the blockchain network, they are secure and transparent, allowing anyone to easily verify the ownership and/or authenticity of the NFT without fear of receiving a fake.
HOW CAN A BUSINESS CREATE REVENUE FROM NFTs?
First, businesses can sell NFTs to bring in additional revenue, bring additional awareness to an issue, or bring in and keep consumers buying their product by incentivizing holding these pieces of artwork. When a business chooses to sell NFTs, they may just want to bring brand awareness to the public about their products. For example, hu
ge companies such as McDonald’s, Nike, Louis Vuitton, and Gucci have created and issued NFTs within the past couple years to generate brand awareness. In addition, businesses, such as Rewilder have changed the game when it comes to bringing awareness to environmental issues. Rewilder, a non-profit organization interest in charity work, has used NFT auctions from their own artwork to raise funds to buy lan
d for reforestation. In 2022, they claimed to have raised roughly $241,700. Moreover, other businesses have sold NFTs where the money went to orangutan conservation charities. This may sound childish at first, but a group of buyers bought 1 NFT, I repeat 1 NFT, the one shown to the left, for $92 million dollars.
NFTs USED IN MUSICAL ART
Second, businesses can offer NFTs that give customers exclusive access to certain products, features, or services. Prominent artists in the music industry, including Snoop Dog, Eminem, Shawn Mendes, Linkin Park, and Whitney Houston have all used NFTs to release new singles, old singles, or evenold albums. This not only created more awareness about each one of them but also brought in additional revenue. For example, in 2022, Snoop Dog’s new album B.O.D.R. (Back on Death Row), had one of the most successful music NFT launches amassing around $44 million in revenue.
NFTs AS IN-GAME ITEMS IN VIDEO GAMES
With all that being said, the future gaming businesses, whether that be computer or consoles, have the most untapped potential to really use NFTs to change the landscape for how games are marketed and played. In most games, individuals playing have ranks, skins, weapons, attributes, etc., but what if the gaming industry tied every asset in these video games to an
on-chain NFT that could be sold to the public. This could create more incentive to play these video games because if they knew they could sell in-game assets for real cash, more individuals would surely play in hopes to earn these assets. You may wonder how this benefits video game producers and businesses, well, just like with intellectual property in real life, the producers and businesses could place a royalty on all NFTs sold on the markets, which would not just allow them to sell the game to an individual for profit, but to continue to profit off of these individuals for the duration of their play as long as they continued to buy and sell NFTs.
NFTs USED TO ADVERTISE IN THE VIDEO GAMES
As outside companies begin to look for new and innovative ways to reach a wider consumer base, their marketing strategies will change. The new generation of adults have played video games their whole lives, so what better way to market to them then to advertise in the video games they play. You might ask, how this could work, and how you could get more adults to play video games and hold NFTs even when their working full-time. The answer is simple, Play-to-Earn video games. Some video games have already established a business model that incorporates holding NFTs and playing the game for income. For example, Imposters, a social deduction game, pays its players when they win the game if they are holding an NFT issued by them. So, how can a business afford to do this, well, if there are enormous amounts of individuals playing the video game, then it is common sense that any business external to the video game is going to want their product/service/good being shown to these people. So, these video game businesses can license out NFTs to these external businesses like Amazon or Starbucks, which would give them the right to place advertising within the video game. Just like in any free market, the market would determine how much a business would be willing to pay to advertise within the video game, and most likely, would be based upon how many video game users there are. The link below shows a Play-to-Earn video game. https://www.youtube.com/watch?v=4fgbRbNqOdw&t=19s
In conclusion, NFTs offer a new way for businesses to monetize their digital content and create new revenue streams. These NFTs can be used to offer exclusive access, create loyalty programs, authenticate ownership, and tokenize assets. And as the technology continues to evolve and gain acceptance, we can expect to see even more innovative uses for NFTs in the future.
https://www.appcraver.com/nft-drops/the-sandbox-nft-know-everything/
http://treyspeegle.com/010113/2021/12/12/q1vjgeftajmtx21rfkw6rv16g21czh
https://nl.etfree.xyz/index.php?route=product/category&cid=46&cname=louis+vuitton+metaverse+game
https://youngplatform.com/en/blog/news/nft-music-10-musicians-that-launched-nft/
https://nftandgamefi.com/2022/02/22/snoop-dogg-nft-music-and-44-million-of-success/
https://polkastarter.gg/impostors/
https://opensea.io/assets/ethereum/0x6199a4a9a290b0b77ff2e113abe9d1ad4ab5ac63/3152
Hi Alec –
I thought your blog was very interesting and educational, especially as NFTs are a hot topic right now. I appreciate the way in which you organized your blog, by first fully explaining what NFTs are, and then discussing the ways in which they are utilized. Obviously this blog was very educational for me, as someone who is not well versed in NFTs. However, I have to wonder do NFTs ever incur data or privacy legal risks as a result? If businesses utilize NFTs to acquire more capital, are there any legal issues that a business owner should be aware of? I think a section discussing this would have strengthened your blog. Overall, good job!
Hi Alec,
Very interesting post! You picked a very trendy topic that will certainly attract a good bit of interest. Your post was super detailed and informative. I think you did an excellent job about how NFTs are beneficial to businesses. I have two quick points of constructive critiism. First, I think it would have been helpful to have an explaination of what blockchain is. Second, as someone who knows very little about NFTs, I think it would help skeptical readers to understand how/why NFTs are beneficial to consumers. Other than that, great blog post, it was a pleasure to read!
Hi Alec,
I liked the detailed explanation you gave of what NFTs are. I feel like a lot of people hear about NFTs but know little about them (including myself). You also give a fulsome description of how businesses can take advantage of NFTs to make profit, and I found this part fascinating. I had no idea that NFTs could be used in so many different ways! I would suggest including a section where you talk about how businesses can navigate using NFTs and the hazards that can come with that; I imagine that there are some concerns about copyright, data, and privacy that a business can run into when using NFTs. Overall, good job!