NFTs – non-fungible tokens – are unique digital assets That are currently experiencing a significant spark in interest from companies across a range of sectors.
There was the artist Beeple, who sold a piece of art for US$69 million in the form of an NFT.
Funko, a company best known for making collectible figurines of pop culture characters recently announced that they would be expanding into the NFT market.
Luxury fashion house Gucci told Vogue Business that it was “only a matter of time” before a fashion house would release an NFT.
Lachlan Feeney, founder of Australian blockchain developer Labrys, explained the appeal of NFTs for brands.
He described NFTs as a “digital collectible.”
“In the past, it’s been very hard to create collectibles in a digital world because we’ve just been subject to copy and paste.”
“The whole idea behind NFT’s is bringing the collectibles from the real world where we can actually have scarcity, whether that’s trading cards or collectible toys [and] trying to replicate that in the digital world.”
Those NFTs can’t be copied or repeated. That, Feeney says, is what makes them valuable.
“Everyone agrees that the Mona Lisa in the real world, you can print it and make copies of it a million times over. But there’s only one Mona Lisa, and it’s worth a lot of money.”
“The same concept has basically been somewhat successfully applied thus far with NFT’s in that digital artwork space…if someone creates a new piece of artwork, it doesn’t matter whether they produce the artwork with a mouse and keyboard or with a paintbrush, there is an original piece of artwork that is sitting out there on the blockchain.”
“You can take screenshots and so on, but you don’t own the original piece the same way that you wouldn’t own the Mona Lisa.”
Because this technology is so new, Feeney believes the marketing industry is primed for utilising NFTs.
“[It plays on] these tools and games that advertisers and marketers have used for decades.”
“I think we could see something like, when going through an online checkout, you might randomly win an NFT as a reward.”
“You have different levels of rarity and so on. It plays on all of the same game theory, incentives that get people interested in these things, and interested in doing more shopping and engaging with the business.”
NFTs have the potential to solve some of the issues of cybersecurity.
“In the advertising and marketing industries, there are long-term battles against fraudulent clicks, fake accounts and click farms,” Feeney explained.
“Blockchain, though, makes it easier to discern real engagement from fake engagement. Intellectual Property is also a contentious issue, but NFTs alleviate that by providing a digital proof of ownership.”
According to CNN, the price of NFTs has dropped 70 per cent since February. Despite the drop, the popularity of NFTs doesn’t seem likely to end any time soon. In fact, it may just be beginning.
