We now live in the digital age, and far gone is the time when things need to have a physical form for them to have value. Painting is a great example of this form. Before you can say that you own a piece of painting, you must first have it in its physical form. You can’t simply say that you own it, and it has value if it’s just a picture in your phone, storage device, or cloud storage.
Now, a painting would now be acceptable if you could have it digitally made. You can say that the art piece truly has value. You can have it on your phone, or you can have it saved in the cloud, yet its value would not diminish.
These are examples of NFTs, which are now the top trend in the market alongside cryptocurrency. Whether for pop art, currency, or business purposes, these tokens that are tied alongside cryptocurrency have their uses. Some might say that NFTs are just a hype, but we are here to explain the latter as to why they might be good for your Business.
Let us first define what an NFT is and what its uses are. We will also give you reasons and answer the question of why should businesses create NFTs.
NFTs or Non-fungible tokens are digital assets. This means that they are forms of properties that are very similar to cryptocurrencies, which are called fungible tokens. Take note that non-fungible tokens and cryptocurrency are similar, but they are not the same.
To start, fungible tokens like cryptocurrency are digital assets that are secured by blockchain technology. These digital assets have similar properties to real currency and are interchangeable like real money.
Let’s say you borrowed a dollar from your friend to buy a drink. After some time, you paid him the same amount in pesos. The money you paid back to him is different from what you borrowed, and it is no longer the same dollar, but they are the same in value.
The same goes for fungible tokens. If you borrowed 1 Bitcoin, you could send back the same amount, but it would not need to be a bitcoin. You can pay him back in some other form of fungible token like Ether.
As for non-fungible tokens, these are unique pieces of code that are different from each other. Each non-fungible token is unique, for they have its own piece of code in them that differentiate them from other NFTs.
Again, a perfect example is the painting. Paintings are one of a kind and could hold their value to millions. The same goes with NFTs, and their value depends on what someone believes its value is.
The development of NFTs has a very wide variety. You can create NFTs in the form of digital artwork, digital music, videos, photos, even virtual real estate, and many more.
Why Use NFTs for Business?
Since their usage has been so vast, it means that a lot of people know its value and worth. That reason alone is the reason why businesses should create NFTs. We’ve also listed down below some more reasons why you should create NFTs for your Business.
After all, It does not only work for profit, but it also works for a lot of reasons.
From the definition of NFTs alone, one can understand how unique an NFT is. An NFT cannot be replicated because it owns a single piece of code for its own identity. Due to its uniqueness, it boosts the recognition of your brand and allows your customers to maintain their loyalty to your Business.
A great example of a company that shows uniqueness is Nike. Not only do they sell shoes, clothing, and accessories, but they have also joined and started creating NFTs for their beloved customers to purchase. These avid shoe collectors, without a doubt, would start collecting NFTs from them.
Aside from being unique, NFTs also show aspects of rarity. While someone may buy an NFT that you have created from your Business to express their support or self-expression, another person might buy an NFT with the hope that its value might increase in the future. As rare luxury cars such as Bugatti Type 41s, NFTs are rarely mass-produced, making them reasonable investments.
Due to the rarity of the created NFT, it builds up hype among the customers.
Because your NFT boosts your company’s recognition and increases customer loyalty, it is also an excellent tool for marketing. Since NFT sales are potentially good measurements of customer satisfaction, it increases the likelihood that more potential customers would be interested in purchasing what your business offers. You can even drive up customers’ brand loyalty if you tie it up with limited-edition merchandise you can offer.
This is especially true if limited edition NFTs are produced and sold to select customers. It can be an effective promotion of your brand since your Business is along with the hype. Even more so if NFTs are sold to influential individuals like Steve Aoki, Eminem, and many more.
Again with the uniqueness factor, using NFTs for your business counters counterfeiting and piracy. The NFTs you create for your Business have their piece of code that nobody can replicate. They may replicate it visually, but it will not be the same due to missing its unique code.
You can place these NFTs on your products like barcodes, and your customer can scan them to check for authenticity. You can apply these to examples such as tickets for concerts, certificates of ownership, discount vouchers, and many more.
This may not be used directly for sales purposes, but it may be used for profiling purposes. NFTs can provide your employee’s name, address, degree earned, and other important information. It is good for profiling because NFTs cannot be altered and hacked into once they are in the NFT blockchain.
Products encounter authenticity and verification problems regarding where they came from, what is inside them, what is it made of, and such. NFTs eliminate this problem because you can use them as an identifier of your product since they cannot be altered or tampered with.
Doing such saves time and increases efficiency when passing through customs and border security places.
Ways To Sell NFT for Business
There are plenty of ways you can sell NFT for your Business. You can sell them directly to customers or attach them to your products. What matters is
Aside from selling the actual product to your customers, like shoes, you can sell it along with the NFT. To give you a broader idea, they receive a digital pair of shoes and the shoes they bought from your Business. There are a lot of good tandem ideas you can add your NFT with.
Another example that you can sell your NFT with is wine. Imagine selling the wine and then adding an NFT so the customers can verify the wine’s authenticity.
Generosity is a wonderful human trait, and it would be better if the person who donated received an NFT for their generous actions. Big companies like Coca-cola are companies that create NFTs for social causes.
In return, it allows your company to receive a good public image and acts as a good marketing platform for your company.
Risks of Using NFT for Business
Despite being made secure because of blockchain technology, there are still risks to consider when you plan to create and use NFTs for Business. The business potential of NFTs cannot be denied, but it does not hurt to be careful, especially with your business investments.
Since blockchain technology is still new, it is still somehow vulnerable to some hack attacks. Nevertheless, this is normal for new technology that emerges. It will not be long until they fix everything that needs working on with blockchain technology.
One of the risks of using NFTs is their effect on the environment. NFTs may affect the environment indirectly, but their involvement should not be taken lightly.
As we stated earlier, NFTs and NFT transactions use blockchain technology, the same platform that their cryptocurrency cousin uses. It uses the Ethereum blockchain, and these blocks from blockchain technology can be earned from computers that race or “mine” to solve a complex problem. The first computer to solve these complex problems make the right to confirm these blocks and receive payment for the process as well as a reward like Ethereum or Bitcoin.
Because computers work and solve these complex problems day and night, they consume a lot of electricity which becomes transferred as more heat into the environment. In other words, the form of payment that you use to pay for the NFT, Ethereum, is responsible for increasing electricity usage due to blockchain miners.
So there you have it. There are plenty of good reasons you should create NFTs for your Business. NFTs may act as a marketing platform, profiler, fundraising platform, counterfeit protection policy, or as a reward for loyal customers.
There may be risks involved when creating and using NFTs, but these reasons alone are too minor to hinder you from integrating NFTs into your Business. Whatever the reason may be, NFTs do serve a lot of purposes, and they bring benefits to your Business.