Welcome to the NFT Metaverse.
Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s. Image: Beeple
By leveraging the characteristics of blockchain technology, NFTs are defined by three factors: ownership, transferability and authenticity. In the simplest terms, NFTs are digital certificates of authenticity, and based on where they were bought and resold, each transaction is recorded in its own unique code. NFTs can also be “animated GIFs, songs, or items in video games. Or they can be one-of-a-kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.”
Let’s say, for example, that you purchased an NFT image or video that was “minted” on an NFT marketplace. In return, you received the NFT token containing that purchased image or video. “Since that NFT token is now represented on the blockchain, it can be verified as the original. Screenshot images of NFTs all you want, but if it’s not on the blockchain, it’s not the real one. Owning an NFT token is like having a certificate of authenticity on a piece of art you’ve purchased from a gallery. Plus, whoever created the NFT can add extra metadata that represents additional benefits for the buyer.”
“In the simplest terms, NFTs are digital certificates of authenticity, and based on where they were bought and resold, each transaction is recorded in its own unique code.”
Shifting from Collecting Physical to Digital
Last March, an unknown artist who goes by the name of Beeple created an NFT that fetched a record-breaking $69 million in a Christie’s sale. “The digital collage earned a bid higher than those seen for works by Frida Kahlo, Salvador Dalí, or Paul Gauguin.”
“The digital collage earned a bid higher than those seen for works by Frida Kahlo, Salvador Dalí, or Paul Gauguin.”
For NFT art collectors who’ve embraced the digital economy and digital world, NFTs remove any doubt that a collectible can be a forgery while also allowing individuals the ability to brag about their purchase by posting about it on Reddit or other platforms.
In its attempt to outmaneuver Christie’s and increase its relevance with younger collectors, Sotheby’s has launched its own NFT platform, called “Sotheby’s Metaverse.” “The platform will include curated NFTs from the Sotheby’s team and allows individuals to purchase NFTs using ETH, BTC, USDC or fiat currencies.” Future features will include dynamic auctions and the ability to mint generative artworks, according to the auction house.
Tapping into the Consumer’s Digital Lifestyle
NFTs have reinvented the sports collectibles and trading cards market. Investors have pumped $357MM into Dapper Labs, operator of the NBA’s Top Shot NFT marketplace. The online sports book DraftKings is expanding its own sports ecosystem by deepening its fan engagement through its partnership with Autograph NFTs, co-founded by Tom Brady. Autograph NFTs has signed exclusive NFT deals with Tiger Woods, Wayne Gretzky, Derek Jeter, Naomi Osaka and Tony Hawk, who will also join Autograph’s advisory board.
DraftKings co-founder and president, Matthew Kalish, said this: “This initial vision in collaboration with Autograph, and its coveted collection of official digital collectibles, is a vital first step as we enter the emergent NFT market.”
Recognizing the value in leveraging your own IP and increasing fan engagement, the Golden State Warriors launched an NFT collection commemorating their NBA championships, making them the first professional sports franchise to release their own NFT collection. “We see NFTs and the digitization of our business as a mainstay to engage our fans around the world.”
Extending a Consumer’s Digital Experience
Last March, The Kings of Leon released their latest album as an NFT, which blended gamification, collectability, audio content and a chance to win front-row seats to the band’s shows. Available exclusively on NFT marketplace YellowHeart, the band dropped a series of three tokens called “NFT Yourself.” As reported in Rolling Stone: “One type is a special album package, while a second type offers live show perks like front-row seats for life, and a third type is just for exclusive audiovisual art.
MarTech reported that, Taco Bell sold animated GIFs in the form of NFTs, which were put up for auction on Rarible. In addition to news articles written about the initiative, a short video advertising the sale has garnered over 300,000 views.
“The digital fashion brand made history in an NFT drop by partnering with an 18-year-old artist, which fetched over $3 million in under seven minutes.”
The digital fashion house RTFKT is creating one-of-a kind sneakers and digital garments. RTFKT collaborated with six different artists to develop a digital fashion collection inspired by classic Atari video games. Users were able to “try on” the limited edition sneakers virtually using Snapchat and the MetaverseMe App before purchasing the NFT wearables.”
The possibilities for creating multiple brand extensions, increasing media coverage and opening up new revenue streams are endless. For example, “The digital fashion brand made history in an NFT drop by partnering with an 18-year-old artist, which fetched over $3 million in under seven minutes.”
Digitizing the Supply Chain
The same NFT attributes that are represented in art, music and video purchases, such as verifying that an asset is an original, confirming ownership and ensuring the that the creator is compensated, are equally applicable to the supply chain by individually authenticating goods, ensuring their quality and origin. Consider how this would add value to the auto industry by verifying the sourcing and materials used in auto parts globally, or with brands that need to track, trace and authenticate the origin of luxury goods.
“In 2019, Louis Vuitton unveiled its plans to launch a blockchain platform that would use NFTs to authenticate its merchandise. These tokens can be used to identify and trace the entire supply chain journey of a Louis Vuitton handbag or any other unique product. “NFTs also helps reveal counterfeit products. This is critical, since the total trade in fakes is estimated at around $4.5 trillion, and fake luxury merchandise accounts for 60%-70% of that amount.”
“NFTs also helps reveal counterfeit products. This is critical, since the total trade in fakes is estimated at around $4.5 trillion, and fake luxury merchandise accounts for 60%-70% of that amount.”
NFT for B2B?
To deter the possibility of fraud and debt management, B2B companies in the financial and insurance industries are exploring how NFTs can verify transactions. Beyond these existing use cases, “NFTs could represent or record any tradable and non-fungible rights in the future. They could be used to represent a variety of financial instruments, including loan agreements with banks, bonds, insurance policies and asset packages.”
NFTs Impact on Healthcare
“By utilizing digital currencies in healthcare, practitioners and hospital administrators can easily track and audit patient transactions on the ledger, creating a transparent and secure payment system.”
Similar to the supply chain example above, is the ability of tracking pharmaceutical production and medication adherence by providing end-to-end traceability of drugs from manufacturers, to providers, down to patients. In this study, Cryptocurrency In Healthcare just released by Lawrence Evans, a key benefit to healthcare administrators, providers and patients is the ability to mitigate the administrative burdens impacting data management, consent management, and administrative management.
This same study points to this added benefit, “By utilizing digital currencies in healthcare, practitioners and hospital administrators can easily track and audit patient transactions on the ledger, creating a transparent and secure payment system.” “Further, cryptocurrency adoption can improve healthcare sector efficiency by affording improved access and allowing a more dynamic and holistic patient-provider relationship.”
Just How Big Will the NFT Metaverse Get?
The potential use and applications of NFT seem endless. Think of how it could potentially be used for voting in future elections, or other instances requiring verification for purchases, college admissions, etc. We believe that like with any other new tech platform, many will rush to embrace it—some successfully and some not so successfully. However, like any other platform to emerge over the last 10 years, it will eventually find its way into all walks of life and sectors.
We’d be curious to hear how your company or investments would benefit from NFTs.
Email ScheinerInc. here and let’s discuss. Thanks for reading.