While the majority of consumers are still apprehensive, many are coming around to the benefits of crypto assets.
When discussing crypto assets, cryptocurrencies like bitcoin or dogecoin are usually the first things that come to mind. However, NFTs are another form of crypto assets that are becoming popular.
These unique assets that live on the blockchain have some unique features that set them apart from currencies.
In fact, many of those that are at the forefront of the digital currency industry believe that NFTs will transform the way that consumers purchase digital content and products.
Below, we take a closer look at NFTs, we answer important questions such as “What are NFTs?” and demonstrate how they are already being used. This will help you better understand how they will affect your industry and the worldwide marketplace in the coming years.
What Are NFTs?
NFT stands for a “non-fungible token,” which doesn’t clear things up much as to what they do or where their value comes from.
The phrase “non-fungible” simply means that they are unique. On the other hand, a cryptocurrency like bitcoin is fungible. One bitcoin can be exchanged or replaced by another one.
One NFT cannot be exchanged or replaced by another NFT because no two NFTs are the same.
Think of bitcoin like dollar bills. If I take your dollar and give you another one, you are left with the same amount of currency.
For comparison, NFTs are like collectibles or trading cards. An extremely rare card will have a unique value assigned to it that will not be equal to the value of another card.
At the time of this writing, the majority of NFTs live on the Ethereum blockchain. The bitcoin and dogecoin blockchains could also implement their own variations of NFTs.
The process of adding your media to the blockchain is called “Minting”.
Benefits of NFTs
Each NFT stores unique data that’s verifiable. This is important as it allows users to trace the origins of the NFT. This provides a means of proving that an NFT is an original as opposed to simply being a cheap copy.
With that said, having hundreds of numbered copies of an NFT is a real possibility. In fact, it is a problem being encountered by some NFT collectors. Still, these copies are discernible from the original by examining the blockchain.
NFTs not only provide a means of verifying origin, but they can also allow you to prove ownership.
This is especially important for content creators, as they can show that they are the original producer of a work. The hope is that this will help prevent and combat the pirating of artwork, music, and other digital content.
Despite being a relatively new commodity, NFTs have rapidly gained traction as a preferred medium in several major marketplaces.
As noted above, the ability to track every transaction with each individual NFT has made them especially appealing to the digital content industries.
A few pioneers in the music and gaming industries have already begun implementing NFTs into their sales strategies.
The gaming industry has sold digital content to consumers for years. This has primarily come in the form of DLC or downloadable content.
Games like Counter Strike Global Offensive and Call of Duty allow players from around the globe to connect and download unique items for use in the game, and NFTs seem to be the natural progression of this practice.
One of the first games to implement NFTs into their framework was CryptoKitties.
Users can trade or sell virtual kittens in the form of NFTs. One user even purchased a particular NFT kitten for $170,000.
Digital art has taken off with the rise of NFTs.
You might’ve heard about the Crypto Punks art collectibles. These are unique characters that are stored on the blockchain. One of which sold for $761,889.
One of our favorite artists, Beeple sold one of his artworks for $69 million.
Open Sea is a digital art marketplace that utilizes NFTs to facilitate the sale of artwork.
The music industry is taking full advantage of NFTs.
Several mainstream musicians in varying genres have begun selling NFTs with their digital albums. For instance, Kings of Leon made approximately $2 million by bundling NFTs with their new album.
The NFTs are being sold in the form of unique digital collectibles. Many artists are selling them exclusively with each album purchase. This encourages fans to spend more money and buy both the entire digital album and the “collectible.”
NFTs have a strong positive outlook in the music industry because CD purchases have fallen by the wayside. Allowing fans to purchase a unique digital item that is endorsed by the artist can fill the role of album covers and in-store collectibles.
The Future of Product and Content with NFTs
New Job Opportunities
Have you ever looked at a meme and wondered who was the original creator?
NFTs can give Meme Creators the ability to prove that they were first to produce something. This will incentivize them to produce more memes with the world as they’ll get paid for their comedic contributions.
By proving ownership, NFTs can create job opportunities that were otherwise impossible.
Currently, artists, musicians and other creators have to go through third-party agencies to patent their work. This is to help them mitigate the risk of having their work stolen.
By minting their work directly on the blockchain, creators can skip the involvemen of a third-party.
In this way, they’re able to reduce their overhead costs by selling directly to their fans.
And buyers of said art can be confident they’re buying an original piece without paying an overhead fee.
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