Due to the swift advancements in technology, our world is constantly evolving. From the internet to social media, technology has made many things possible that weren’t previously. One of the most recent advancements in tech is NFTs. But how will NFTs change the world?
Below are five ways that NFTs are changing the world as we know it today.
Enable Digital Ownership
Before NFTs, there was no such thing as digital ownership. If an artist were to post a picture online, anyone could simply right-click save the image and "claim" it was theirs.
However, thanks to the blockchain technology that NFTs are built upon, consumers are now able to prove they own a digital asset. This proof of ownership opens up an entirely new market for creators and businesses alike.
You may be wondering, why would anyone want to own something that’s digital? Well, for the same reason that everyone wears a certain shoe or drives a specific car. Brand.
Humans value brands, and that goes for digital goods as well. Except now brands actually have the means to market and sell digital goods. But, that’s not the only type of ownership an NFT can offer.
Physical goods such as clothing, collectible cards, and even homes are all examples of real-world items that can accompany an NFT. This is accomplished through an NFT’s smart contract.
Offer Transparency to the Public
The blockchain is best described as a decentralized (controlled by numerous entities, not just one), immutable, digital public ledger. This is what gives NFTs their power and is also what separates NFTs from other assets on the internet.
That being said, the blockchain is not the internet. Although, they do coexist. The blockchain ensures that everything which occurs on it is recorded and displayed publicly for anyone to view.
This allows consumers to verify that any claims made by the seller are true and accurate. The date of creation, the creator, past owners, and sales history are all examples of what you can verify when buying an NFT and anything that accompanies it.
Now, what if we take this transparency and add it to a real-world asset like a car? How would it benefit the buyer? Rather than relying on a sketchy car salesman to tell you about the vehicle's history or relying on third-party vehicle history reports, an NFT can contain all the data you need, plus you can view it as you please.
Maintenance, incidents, miles, past owner, and sales history could all be attached to an NFT. It could even update in real-time as the owner puts miles on the vehicle, and whenever they take the vehicle in for maintenance work.
You could view all this data for free before ever visiting the dealer, that way you know exactly what you’re walking into before you even begin to negotiate a deal.
Of course, this is just one example of how NFTs provide the world with transparency. Just know that if it’s an NFT, you can view it all. There’s nowhere to hide the truth on the blockchain.
Produce Royalty Payouts to Creators
Perhaps one of the greatest benefits of NFT technology is its ability to perpetually pay a creator for their hard work through royalty payouts. Before NFTs, creators would only profit from the initial say of a product. But now creators can continue to earn for years to come, rightfully so.
NFTs give creators the ability to implement a royalty percentage into the smart contract. The exact percentage is up to the creator, however, the average ranges from 5% to 10%.
That means every time an NFT sells on a secondary marketplace—even if it’s decades later—the original creator will earn a percentage of that sale. Even better, the payment is automatically sent to the creator without the need for a third party to initiate the transaction.
This is a huge game changer since it enables another source of revenue for creators. Gary Vaynerchuk is a perfect example, having generated more than $40 million from his 10% royalty fees alone from his VeeFriends NFTs.
There’s no reason why creators shouldn’t continue to earn from their hard work, and NFTs finally make it possible.
Provide Unique Funding Opportunities
NFTs provide artists and startup companies with a unique opportunity for funding. A good example comes from artists in the music industry. Generally, artists are approached by a record label with an upfront offer in exchange for making music and traveling show-to-show performing.
Although the initial offer may seem enticing because of the large sum of money, artists don’t actually benefit much beyond this. Why? Because on average, record labels take up to 80% of an artist’s revenue.
That’s right. The artists do all the work, yet they are compensated the least. That is, until NFTs.
What if instead, an up-and-coming musician released their album as a collection of 10,000 NFTs and split 20% of their revenue shares to holders.
- Related: How Are Musicians Using NFTs?
With the purchase of this NFT, the buyer receives the album, an hour-long virtual meeting with the artist themself, and a percentage of royalties from the revenue generated from the music indefinitely.
Not only is this a better deal for the artist (20% compared to 80% royalty shares), but now the fans are gaining huge value from being a holder of their favorite artist’s NFT album—further fostering a bond between artists and fans.
Foster A Deeper Bond Between Brands and Consumers
Brands strive to foster and maintain relationships with their consumers via social media and traditional marketing methods.
Although this has worked well in the past, that doesn’t mean there aren’t greater opportunities to form an even deeper bond with consumers.
In fact, NFTs provide brands with this exact opportunity. How? By allowing consumers to be a part of the action and take home more value than ever before. Also known as utility, the value that’s provided to users who hold a brand’s NFT is the main way in which a deeper bond can be formed.
Usually, value provided to consumers come to a halt after the initial sale of a product—or at the very least is limited to the terms and conditions of the product or service being provided.
Although this is also true for certain NFTs, brands have the ability to add new perks whenever they please. That means if you buy a Nike NFT that comes with a pair of shoes initially, Nike can decide to provide holders with other perks later on.
And since they know exactly who holds an NFT at any given time, they always know who to provide the added perks to.
This ability to continue to add value to consumers is a sure way to keep them engaged and loving the brand even more. As a result, a deeper bond can be formed.
Is There a Future for NFTs?
The future of NFTs is a society that values digital goods as much as they do physical. Also, creators will be faced with more opportunities to generate revenue while providing consumers with more value than ever before. Ultimately, the future of NFTs is being built right now by big-name brands.
Nike, Adidas, Lamborghini, Starbucks, and McDonald's are all examples of well-known brands that are currently utilizing NFT technology to generate more revenue, appeal to an even larger audience, and ultimately create a future where we all benefit.
Overall, a majority of people still doubt that NFT technology is anything special, but that’s because it is still in its infancy. Just like society had its doubts regarding the potential of the internet and social media, it only makes sense that NFTs are being doubted.
I believe it’s always worth taking into consideration the thoughts of those who have a solid record of being right. Gary Vee is one of those people.
The NFT thing is like the social media thing. It's not a fad, it's not a quick move, this is forever
- Gary Vee
Having built many successful businesses as well as having an act for spotting trends and evolutions, I feel confident when Gary says: “The NFT thing is like the social media thing. It's not a fad, it's not a quick move, this is forever.”
About the Author
Alex Gomez is the founder of cyberscrilla.com. Alex is passionate about informing others on Web3 tech. He previously worked for Gary Vee at ONE37pm as his Web3 writer and has written for other media outlets including Voice. Alex is an avid researcher and investor in the Web3 space and strives to help others while keeping a curious mind.
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