You’ve probably heard the acronym NFT thrown around alot lately. Whether you are an avid fan of digital art, sports enthusiast, brand advocate, marketing guru or photographer, NFTs are a hot topic of conversation. But, what exactly is an NFT and does this virtual asset hold any real value?
Let's take a look.
What is an NFT?
To put it as simply as possible, a Non-Fungible Token (NFT) is a one-of-a-kind asset that exists solely online and is managed in a digital ledger. This digital equity has its own value, and comes with a certificate of authenticity. Even though the asset lives in an online space, it cannot be duplicated because it is found on a decentralized online platform and is housed in advanced blockchain technology. Blockchain technology means that the asset cannot be modified, ensuring it has legitimate value. These assets can be sold and bought digitally, usually with cryptocurrency as they are usually encoded with the same or similar software as cryptocurrency.
NFTs have actually been in existence since 2014 and are only gaining real momentum now (particularly in the digital art space). In fact, an astounding $174 million has been spent on NFTs since November 2017 - and this number is rising dramatically in 2021. What makes NFTs so sought after is that they are either one-of-a-kind assets or assets that have a very limited run and it is the digital scarcity that makes them so popular among collectors.
This exclusivity stands in contrast to most online content, which is always in infinite and easy supply. So, like most assets, limiting the supply of the asset immediately increases the value it holds. With this in mind, it is also important to note that early NFTs were actually digital creations that existed in another form online, including well-known digital art that existed on Instagram and well-loved video clips from sports games. This confused a lot of buyers when NFTs were first introduced but today, creators are setting the standard for valuable and one-of-a-kind NFTs.
The Value of NFTs
We know that an NFT is a one-of-a-kind digital asset, but the asset has its own unique built-in authentication. This certificate serves as proof of ownership and gives the owner the rights to the online item. This may be more for “digital bragging rights” than anything else - but there is worth in these bragging rights.
In March 2021, renowned digital artist Mike Winklemann, commonly referred to as “Beeple,” sold an NFT for $69.3 million, breaking all digital art records. This changed the dynamic of the NFT and proved its value to the world.
What are NFTs Used For?
As stated previously, NFTs can be used by content creators and artists and serve as a unique way to monetize their talents. This means that creatives no longer have to rely on art shows and galleries in order to sell their work. They are now able to sell straight to the consumer, which makes room for even greater profit. But NFTs do not just end in the art world. NFTs have made their way into the marketing realm and brands are quickly taking notice of this profitable opportunity.
Well-known brands like Taco Bell and Charmin have hopped onto the trend and auctioned off their own artistic assets. Both brands ended up raising significant funds for charity and set a precedent among business owners. To give you perspective, Taco Bell’s NFT sold out in a few minutes and the highest bid came in at $3 723. 83.
The NFT brand trend is not set to pass anytime soon, and even celebrities are jumping on the bandwagon with the likes of Lindsay Lohan, Ethan Klein, Trisha Paytas and Snoop Dogg releasing unique moments, images and artwork as NFTs.
Digital creativity and online monetization is at an all-time high, and brands need to get in on the action fast. So, where do you even begin?
Where Can You Buy or Sell NFTs?
There are a variety of NFT shops online, but it is important you do your research before committing to one platform. The most well-known and trusted NFT marketplaces available today are:
- OpenSea.io: This is a platform that offers rare digital items and online collectibles and is a peer-to-peer platform. If you want to begin your journey on this platform all you need to do is create an account and browse site offerings.
- Foundation: This is a more exclusive platform and artists or creators need to receive an invitation or “upvotes” from other creators in order to post their creations. With this in place, the platform offers higher-caliber art than other platforms.
- Rarible: Much like OpenSea.io, Rarible is an open marketplace and allows anyone to buy and sell NFTs.
The above platforms play host to thousands of collectors and creators but it is also important to note that research is key. Many creators have experienced impersonators through NFTs, impersonators who sold their work without permission. Essentially, “buyer beware” should always come into play when making a purchase.
The Wrap Up
Whether or not NFTs are here for the long run, they have become the latest trend in marketing and art. The uber-rich like to spend money and they are ready to buy online assets. Today, digital art and digital branding have a new meaning and NFT prices indicate that they may soon become a normal part of the art, marketing and collectible space in general.
We look forward to seeing how the NFT space grows and evolves in the coming months, particularly in the creative marketing space.
Contact Nexa for all your NFT, marketing and digital expertise today.