In today’s world, a digital record is key to materializing statements, ideas, and especially status. If you didn’t track your run on your apple watch, did you really go? If you didn't take pictures of your vacation, were you really there? If someone has a hundred thousand followers without a blue check mark, are they really that famous? There is a pattern here, digital tracking is becoming more important to us when determining legitimacy for just about anything. As we’ve let it enter our personal lives, we see it influence investment decisions.
You’ve likely heard about “NFTs” and people making absurd amounts of profit from them. If you’ve dug further into the topic, you may have seen pictures of cartoon monkeys and thought “how is that expensive '' or “it’s on my screen now, why would I have to buy it”. Rightfully so; if you’re going to understand what NFTs are, you first have to know why the concept is valuable.
NFT stands for a non-fungible token, the “non-fungible” part means one of a kind and cannot be stolen or copied. An NFT can only be bought using cryptocurrency, when the transaction happens the following information is recorded: sender, time, asset, and owner. That information is then stored in another familiar term called “blockchain”, essentially a virtual list of all that information for every cryptocurrency transaction.
With everything in the world today being virtually transitioned like school, banking, and even work, why does it seem crazy that the selling of art has joined the trend? Think about how much physical paintings go for. What purpose do they serve other than aesthetics? Additionally, they can be replaced or replicated which makes them fungible, they can even be destroyed. NFTs are the innovation aiming to change that market and bring it to its inevitable virtual home.
Though the boom of NFT has slowed down significantly, this doesn’t mean the technology will not return and play a significant role in the future of the fintech industry. With that being said here are some reasons why NFTs can be important to you or your business in the future:
Smart Contracts
With the sale of an NFT comes a “smart contract” which is an agreement between the buyer and seller of the artwork. This contract can have just about anything in it and it has concurrent agreements between the two parties. For example, famous entrepreneur Gary Vaynerchuk (who is a big promoter of NFTs) uses the example of NFTs being used for ticket sales. Essentially, because these tokens are one of a kind, they give the holder status. This status can then be used to validate access. The instantaneous NFT transaction and verification system are thanks to the blockchain which has data readily available.
Exposure From Creation
You don’t have to be a professional artist to create an NFT. The process of creation is not as complex as one may think. Brands can make tokens that would represent buyers being a part of an exclusive community. It’s not outlandish to think that there could be communities built around brands that utilize this technology. Additionally, this would enhance the connection between sellers and holders which would continue growing the community. For there to be an incentive for consumers to spend their money with your brand, you need to offer something unique.
Uniqueness
If you’re a start-up following the same layout as everyone else, seeking out business will be difficult since people tend to go with who and what they know. On the other hand, if you come to the table with something people haven’t seen before (for example: making your token accessible to a limited number of holders) you can stand out. An NFT collection is a great way to do that. Well-known brands are looking for ways to utilize this technology and you’ll likely see the results soon.
You want to generate a sense of FOMO (fear of missing out) in the public when describing what your collection offers. Otherwise, the value of the tokens you create will not rise at all. Anyone can make an NFT— the real value is being able to promote it, and that starts with demonstrating what is special about your offer. This creates the buzz around your brand which will earn consumers' attention as well as investors.
What’s Next?
What things do you value? What makes your interests unique? Do you think your career will look the same forever? It’s wise to evaluate the conditions of your industry and reflect on them at a personal level. If you’re a decision-maker, plan for the inevitable. If you’re lower in the chain of command, don’t be afraid to voice your findings or opinions. The virtual shift is nothing to turn away from, in fact, it should be a primary focus for any and every industry professional.
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