In the last few months, we have heard about the NFT concept more regularly than ever. However, many people are still not quite sure what it means, or why there are brands like Coca-Cola, Asics, Adidas, NBA or McDonlad’s that use them with such enthusiasm. But what does NFT mean? The short answer is non-fungible tokens . Let’s get into the concept in this article and understand why there is so much talk about these three letters that are revolutionizing digital experiences and will be a trend in 2022.
NFT is essentially a single, non-modifiable unit of data, stored on a blockchain . You have probably heard this term associated with cryptocurrencies, such as Bitcoin or Ethereum. Crypto are fungible tokens , since one Bitcoin can be exchanged for another, or it can be divided into portions of Bitcoins as many times as necessary. With NFTs we cannot do this, since each one is linked to a unique digital identifier, and its value (in cryptocurrency) varies according to the supply and demand of the market, or the costs of the transaction.
To understand it better, an NFT would be like a unique work of art, for example, La Gioconda by Leonardo Da Vinci. This piece is unique and is exhibited in the Louvre Museum in Paris. If someone wanted to have it, they should buy it (if it were for sale) or make a copy, decreasing its value since it would not be the original part. With the NFT something like this happens, it is a unique digital asset, but may be copied, who owns the NFT has the original, functioning as a sort of certificate of authenticity and with the rights acquisition involves correspondingly. In fact, if you want to buy an NFT, it must be done in the corresponding cryptocurrency.
How do NFTs work?
Thanks to the blockchain and intelligent contracts (English smart contracts ), the NFTs may be provided with a set of metadata that guarantee their authenticity, identify the author, its starting value and acquisition and all transactions has lived since its inception .
By becoming a token, a digital certificate of ownership and authenticity is created, which indicates that this content is unique and that the property rights are held by the person who acquired it (not copyright).
The NFTs can be any element that the creator can think of (a drawing, a wearable for the metaverse, an ebook, a photo, music, a tweet, a combination of several things -such as audio and image-, the possibilities are endless) . They are sold in NFT markets , such as OpenSea or Objkt .
Around the NFT, generally, expectations are generated among the members of the community and they are launched through milestones or events in digital format. They can release an entire collection, on the same day or in different periods, or release a single NFT piece. If the artist or creator has done a good job promoting their release, the available items will be sold in minutes and then resold on the market for even more than their original value.
Why are they so popular?
The reality is that NFTs were created in 2017, but they became fashionable as a result of the pandemic, because they give artists the possibility to make a profit without intermediaries (such as a label, a representative, etc.).
Additionally, this year well-known brands made their first foray into this world, through collabs with artists or even with in-house resources . Some of them are Coca-Cola, Asics, Adidas, NBA, McDonlad’s, Gucci, Dolce & Gabbana, Stella Artois, The Economist, P&G, and more. Athletes and stars are also entering space at a record pace, from Martha Stewart to Snoop Dog, Lionel Messi and Lindsay Lohan, and Tom Brady.
Brands can generate their own token and give them away to their community to serve as currency to acquire NFTs launched by the brand. This has really given an interesting turn to the development of communities (especially on Twitter), since in exchange for tokens actions can be requested from this community to generate engagement (such as “share”, mention other profiles, “like”, etc), or build customer loyalty (giving away tickets to a concert, access to exclusive content or products, and more).
NFTs and some examples of well-known brands
As we know that the trends for 2022 revolve around the development of personalized content for users, to generate a sense of community , it is logical that you consider including NFTs in your branding and positioning strategy .
Coca-Cola: friendship box with Tafi
In its debut with digital assets, Coca-Cola teamed up with content creators 3D Tafi to hold a special auction in Decentraland on the international day of friendship. During the event in July, participants bid for the “friendship box” in the form of the classic vending machine. When opened, some NFTs were revealed, including a wearable in the form of a futuristic jacket, a friendship letter, a sound of a Coke freshly opened and served with ice, among other things.
McDonald’s and its famous McRib
In November, McDonald’s announced that it was launching its first NFT in the shape of a McRib card. The NFT was created as part of the 40th anniversary of their iconic product (in the United States). To win it, his fans on Twitter had to follow the account and retweet from a public account. Ten lucky ones won the NFT and added it to their collection.
Adidas and its alliance with Bored Ape Yacht Club and Punks Comic
Adidas did not want to be left behind in this trend, and joined the most popular NFT creators of the last few months. Last week, the company announced this new alliance through its Twitter account. The tweet was shared more than 8,000 times and collected more than 17,000 likes. Also, he traded his profile picture for a Bored Ape worth 46 ether or USD156K.
Now you know what NFT stands for and which brands are experimenting with them. If you want to start venturing yourself, you will have to make a digital wallet . The possibilities are endless!