If you follow pop culture, you’ve likely seen non-fungible tokens (NFTs) being pushed by a few innovative and tech-savvy influencers. But wherever they’re promoted, the comment section is usually filled with people baffled as to how they work.
This page will shed some light on the emerging NFT phenomenon and provide a few use cases where influencers and brands can potentially use NFTs to generate revenue.
What on Earth Is a Non-Fungible Token?
Here’s the definition of fungible, according to Mirriam-Webster:
being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account
Let’s simplify. Non-fungible tokens or NFTs are digital “tokens” that prove you own something.
They’re not simple certificates, though. The concept is a bit more complex than that. Instead, they’re powered by blockchain technology. Currently, most NFTs use Ethereum, which is the second-most-popular cryptocurrency network behind Bitcoin.
If you’re scratching your head, no worries — so were we. The concept is brand new and somewhat difficult to understand. For now, just know that a NFT (“nifty”) can be used to publicly prove (through blockchain technology) that you legitimately purchased something digital, similar to how blockchain technology proves ownership of cryptocurrencies in general.
For clarity’s sake, let’s go through a couple of instances where NFTs would make sense to issue.
Influencer & Brand Uses for Non-Fungible Tokens
Take a look at this NFT that sold for $3,600. You’ll see a picture. So, are you buying a print of the picture?
Not quite. Instead, you’re just buying the NFT. With the NFT, you’ll have full access to the picture, and you can also prove publicly that you purchased the picture.
In pop culture, the emergence of NFTs has been … interesting, to say the least. Memeability is abundant — literally. The NFT for Nyan Cat sold for 300 ETH (Ethereum) — over $600,000 in today’s ETH to USD exchange rate.
You may think that whoever paid that vast sum must have received exclusive ownership of the graphic, but that’s not exactly the case. The buyer really just received a download link. They also now have the ability to use the graphic 100 percent legally and publicly show that they are the person who paid the creator of Nyan Cat a substantial sum of money. In other words, the buyer really just purchased bragging rights. The issuer of the NFT retains ownership. The buyer is just the one person who was able to purchase the digital item because there was only one NFT issued.
Here’s where things get tricky. Even though there was just one NFT issued for Nyan Cat, there’s nothing stopping the owner of the copyright from creating a higher number of NFTs for Nyan Cat in the future. Thus, for important digital purchases where exclusivity is absolutely required, the concept of a NFT doesn’t necessarily guarantee exclusivity. Only the ethics of the NFT issuer do.
There are more mainstream uses for NFTs too, though. For example, deadmau5 offered a variety of animated digital stickers for his fans to purchase. Each purchase came with a NFT. Buyers don’t have exclusive rights to the assets, but they are able to prove that they purchased them. Aside from supporting deadmau5, NFTs could be used to catalog digital assets — sort of like a stamp collection, except for things that exist solely in pixel form. (Logan Paul literally turned himself into a Pokemon card for fans to “collect”.)
If you’re an influencer or brand and you sell digital media, it’s worth looking into NFTs to offer something unique to your customers and add the air of exclusivity to any release. Be clear to customers that NFTs are simply an additional feature that allows supporters to publicly showcase their support for you and exchange assets with other NFT owners — in other words, the NFT is just a bonus for the buyer, and not some complicated technical thing where extensive knowledge of the blockchain is required.
Potential Drawbacks of NFTs
In regards to general digital media, the big drawback, or perhaps lack of unique selling point, is that NFTs add nothing to the purchase process aside from being able to prove you purchased something. For the vast majority of people buying digital media, being able to showcase the fact that they purchased the media isn’t terribly important. They just want the media itself. Digital media marketplaces may add NFTs as a feature, but it wouldn’t be a standalone phenomenon.
Another issue is the fact that despite being associated with secure blockchain technology, NFTs do nothing to prevent piracy. If pixels are displayed on a computer screen, there is always a way to steal those pixels and save them to a local file. However, if obvious download methods are disallowed, piracy would take some technical prowess, which most people don’t have. For example, torrenting is still alive and well in 2021, but the majority of people just use streaming services for convenience. (Some tech-savvy people just prefer taking the honest path through life, too.)
Overall, outside of influencers and brands being able to offer exclusive or shared-exclusive rights to digital media in a cool new way, NFTs are currently more of a pop culture phenomenon than anything — but so was Bitcoin when, before it became popular, achieved a $1T market cap, and became the talk of the town (read: world).
It’s important to keep in mind that anything decentralized will inevitably catch the eye of privacy-oriented individuals, and those individuals are often at the forefront of innovation. So, NFTs may not emerge as a mainstream facet of digital commerce immediately — but as the technology expands (and becomes more easily understandable to the average Joe), one could make the argument that NFTs themselves could become just as popular as cryptocurrencies are at some point in the future.
If you’re an influencer or brand, there’s never any harm in trying out a trending fad like NFTs to implement a fresh take on whatever you’re trying to sell. We encourage you to learn how to get started selling digital collectibles on Nifty Marketplaces, one of the most popular NFT marketplaces at the moment.