Speakers: Anna Noakes Schulze, Alun Evans and Peter Evans
Non-fungible tokens, or NFTs, are becoming more popular as entertainers, influencers, artists and brands use them to increase interest and awareness while improving engagement and customer loyalty. Anna Noakes Schulze, Alun Evans and Peter Evans look at NFTs, how they’re created, the ways brands use them now and how they might use them in the future.
NFTs are an innovation on top of the blockchain that emerged around the 2017-18 time period. “Around this time last year, the market just took off starting with NBA Top Shot. Then, a couple of [NFT] sales really caught people’s attention, especially the piece ‘Everydays — The First 5000 Days’ by digital artist Mike Winkelmann (aka Beeple) which sold for US$69.3 million as an NFT.”
NFT is just a unique number on the blockchain. And that unique number can be associated with a digital image or game asset or many other things as proof of ownership, Alun adds.
The NFT does not necessarily include IP rights to the image or asset, which depends on the NFT’s terms and conditions.
P. Evans states that “an innovation by the Bored Ape Yacht Club was giving ape owners full commercialization rights. This drove demand because then people could monetize their NFTs. The configuration of the IP associated with the NFT can vary dramatically.”
Anna Noakes Schulze points out the example of the Spice DAO that bought the illustrated pitch book for an unproduced version of Dune. “They thought by buying these storyboards, they were buying the rights to produce the film, but those rights were not included in the sale terms and conditions. So, buyer beware!”
With US$44 billion in NFT sales last year many people see NFTs as a way to make money, but a lot of brands now look at NFTs as a way of monetizing and marketing their IP in ways that drive brand engagement.
When discussing market volatility for NFTs and the many underlying causes, P. Evans suggests:
Given present technology constraints, there are lessons to be learned about how to properly structure an NFT to better match the supply and demand according to the blockchain that it’s on.
Both Evans share their opinion that “we will see more and more projects where there is a utility to NFTs beyond just speculation and love for the brand.” For example, most of the digital assets that gamers buy can’t be sold but an NFT can, which gives more power back to the consumer. P. Evans describes how NFTs are becoming vehicles for co-creation between artists and fans which also creates new ways to engage with consumers.
In addition, NFTs potentially change marketing from a cost centre to a revenue generator with self-financing campaigns that also build community.
But how can we attach real value to NFTs? A. Evans agrees that “for NFTs to have a long-term, sustainable future, they have to have a value beyond just collectability.”
One way to give them utility would be attaching them to rewards or privileges in the real world.
P. Evans sees the utility of an NFT “in the way they can be used to identify brand super fans and incentivize behaviours that are valuable for the brand.”
Dynamic NFTs offer a way to keep track of educational and training achievements, for example, or even certify vehicle maintenance for higher resale value. A. Evans speaks of the technological challenges of dynamic NFTs that can be regularly updated but without swamping the blockchain and are energy-efficient, eco-friendly, and scalable as well. For P. Evans, this touches on the geopolitics of blockchain “which will ultimately grant a competitive advantage to countries that invest heavily in a robust computing infrastructure.”
Going forward we can expect a high computing economy will be favoured in this world versus one that isn’t.
Written by: Anna Noakes Schulze,