Transcriber: Hao Dong Reviewer: Anton Zamaraev
Technological revolution.
A period in which one or more technologies
is replaced by another new technology in a short amount of time.
It could change our patterns,
lifestyles, the way we socially interact with one another,
and especially the way brands engage with their user base or clientele.
The culprit here is none other than blockchain technology
and one of its sub ecosystems, known as NFTs.
This infamous initialism recently heard all around the world stands
for non-fungible tokens or, as known in most cases, a crypto-collectible.
Before we dive deeper, we must first understand
what is the true difference between fungible and non-fungible assets.
Fungibility is a good, or assets, interchangeability
with other goods or assets of the same type.
A common example of this is two one dollar bills,
as there is equal value between the two, making them equally interchangeable.
On the other hand, a non-fungible token is a unit of data stored on a digital ledger,
such as a blockchain, that has unique identification codes and metadata.
Therefore, these are not interchangeable and can be used to represent photos,
videos, audio or other types of digital files.
You can even check the authenticity of an NFT by verifying this information
on a block explorer, such as Etherscan, for Ethereum based NFTs.
This opens up a whole new ecosystem for digital collectibles.
So now that we know exactly what NFTs are,
how will they disrupt the way we engage with brands?
Let’s chat about a few ways this can happen.
I’m going to start with marketing.
A high percentage of brand managers may consider building an audience
as a more important factor than converting sales.
A good marketing strategy that revolves around brand storytelling,
showcasing brand personality as well as brand experiences,
can create value-driven loyalty and awareness from the consumer.
Clever marketing strategies take advantage of blossoming technologies,
as well as growing trends, such as NFTs, whether it’s a sale promotion, contest,
or even an exclusive collectible, representing the brand logo itself,
the opportunities to create in a digital capacity are endless.
Two brands that recently experimented with NFTs
were Taco Bell and Charmin toilet paper.
If you cracked a smile at the latter, then their marketing plans were a success.
With all the chatter amongst media outlets,
as well as creating a word of mouth buzz on social media,
both companies found success and driving additional brand awareness.
Not to mention, having an opportunity to own an exclusive, authentic,
and limited digital collectible from brands we use
is a pretty awesome thing and a wonderful conversational piece.
Speaking of awesome, many of us have seen the futuristic fashion
and character concepts in the movie Ready Player One,
a film that takes place in the Metaverse,
which is a collective virtual shared space.
But what if this were actually reality today?
From character creation to gaming cosmetics such as Skins,
digital identity has been a major driver of microtransaction revenues.
However, due to the confines of being held on a server,
the consumer never really takes full ownership over their preferred identity.
With NFTs, brands can enter
the digital space with fully licensed clothing and cosmetics,
known as digital wearables,
giving consumers the option to fully own their look
and a visual representation of how they portray themselves in the Metaverse.
Let's take a look at some examples.
The first fully decentralized world, known as Decentraland,
has a multitude of wearables to choose from
to complement your digital identity.
From Atari T-shirts, artifacts, shoes,
and even large cryptocurrency exchanges like Binance,
Decentraland users have a plethora of options to deck themselves out.
Some digital fashion houses, such as The Fabricant and Digital Acts,
have already started to make their move
towards the high-end fashion and design market.
In addition, they have already explored using NFTs and virtual clothing
from the digital to what seems like the physical.
Imagine owning an NFT of a digital outfit
and be able to take pictures in it to post on Instagram or Facebook,
or imagine needing a nice dress for a photo shoot in New York
and having a friend in South Africa let you borrow an outfit,
all within seconds of transferring the NFT.
As the metaverse grows at an exponential rate,
brands could take advantage of an additional revenue stream
by offering their own line of branded and licensed wearables and collectibles.
While creating NFTs could be an additional revenue stream,
brands could even build upon this
by making a bridge back to the physical world.
For instance,
taking ownership of an NFT could potentially represent a physical item
or perhaps offer access to claim a physical item of like kind.
This process is known as digital twinning.
Let’s first take a look at claiming a physical item.
Mike Winkelmann, who goes by the artist name Beeple,
brought a flurry of exposure to the digital art space
with a 69.3 million dollars sale of the first 5,000 days digital art piece.
Previously, he experimented with the idea of digital twinning
with select pieces from his Beeple every day’s 2020 collection
by offering users an opportunity to claim a physically encased
representation of the digital work.
This ensures that collectors of his brand have something to enjoy
regardless of what world they are in.
Digital twinning doesn’t necessarily stop at digital art.
NFTs from music artists, clothing brands, or perhaps even fine wine
could represent something in the physical world.
An example?
FWIB technology enables fine wine to be traded securely
without friction at a significantly reduced total transaction cost.
Their technology allows users to securely collect and store information
about each of the unique assets, provenance and transaction history
while holding and ensuring the unique asset
in a professionally managed storage facility.
Thus paving the way for a whole new path in how collectors can engage
and invest in high-end wine brands without the complications
that come with it.
In general, as more brands look to explore NFTs,
digital twinning could be a wonderful gateway
to get the attention of both experienced blockchain users and traditional customers
looking to experiment and learn about an entry into the space.
For me personally,
I first started learning about blockchain and cryptocurrency around 2017.
At the time, it fell early, only to realize four years later
that I was actually late and quite a new back then.
Despite coming from a more traditional stock and options trading background,
I was intrigued with the startup nature of several companies coming to light.
It was in 2018 that I stumbled upon what NFTs were
and the intuitive nature that they brought to collectors.
Yes, at the time it was very hard justifying the friends
that I was extremely interested in learning more about digital cats,
or CryptoKitties, to be more precise.
However, chatting about pixel art images, such as crypto punks at the dinner table,
always got the best reactions.
As we look back on those years, I always think to myself,
“I wish I could have saved those moments and funny conversations
and just stored them away to look at over and over again as time went on.”
In other words: experiences, moments, memorabilia.
Well, what if NFT is by certain brands could do this for us?
From sports to movies to even music and concerts,
everyone has at least one special memory attached to an outside source.
How cool would it be if we had a digital ticket
from the 1969 Woodstock Festival when Jimi Hendrix played?
Or in general, what if with each concert ticket we bought,
we received an NFT of the flyer for the show?
A special and unique item only for the fans that day?
Holder earn mechanics or holders of NFTs receive discounts?
Perhaps even this NFT could represent a 10-minute meet and greet with the band.
Justin Blau, an EDM producer originally from New York,
is a good example of how music artists can offer these experiences.
He recently sold a collection of 33 album NFTs for over $11 million,
with a top bidder receiving an opportunity to create a custom song with him.
The top bid for this direct access? $3.6 million.
It’s good to know that all 33 buyers
received a special edition physical vinyl of the album as well,
touching upon our previous topic of digital twinning.
You see, NFTs don’t age, collect dust or deteriorate over time.
In sports, we’ve already seen a flourishing partnership
between the NBA and Dapper Labs with NBA Top Shot.
Top Shot allows collectors to collect video highlights
from some of their favorite NBA players in the form of a short-length video.
These moments from NBA history have caused a memorabilia rash
of millions of dollars in sales from 7.6 million moments and counting.
The value here is providing fans of sports brands
an opportunity to truly own a piece of history in a dynamic way.
As a potential rises for more sports brands to enter the space,
say goodbye to card grading and casing thanks to verifiable metadata rarities.
Here’s Johnny.
There’s no crying in baseball.
Hasta La Vista, Baby.
Leave the gun, take the cannoli.
Do any of these historic quotes ring any bells?
My poor renditions of some of the most memorable movie lines in history
have resonated with us for decades.
Some of us might own older VHS tapes or DVDs of these movies.
But do we really get a chance to own one of these memorable moments
or iconic characters that have an extreme entertainment value to us?
Well, thanks to blockchain,
NFTs have finally made us that offer we can’t refuse.
Hollywood is here to stay.
As companies like Terra Virtua, who focuses on 3D, VR and AR collectibles,
have teamed up with large movie studios, such as Legendary and Paramount Pictures,
offering fully licensed NFTs from some of your favorite films and TV shows.
With thousands of movies and TV shows out there,
studios and networks have an arsenal of content
they could use to make digital collectibles,
expanding revenue potential from just one source.
There are even additional benefits for brands licensing their IP into NFTs.
As a matter of fact, one of the biggest game changers
for brands can be secondary sales royalties.
Written into the underlying smart contract,
a secondary sales royalty is a fee percentage that is paid back
to the intellectual property owner on all post-primary sales of an NFT.
Popular in the digital art market,
this fee can be assigned by the creator
or even an agreed upon split with the IP owner and licensee.
Fully automatic payments without a middleman.
What’s better than that?
In comparison, once an item or product is sold
and then auctioned on marketplaces, such as eBay or Amazon,
the original creator or IP owner receives zero percent.
This alone could create a paradigm shift in how brands strategize their next move
and what has become a shift in focus to the digital realm.
At the end of the day, everyone is a fan of something.
From snail mail to smartphones,
technology growth is not linear but exponential.
With millions of brands out there looking for new ways to engage
with a global audience on the back of disruptive technologies such as NFTs,
I leave here with one question. “Will I see you in the Metaverse?”
(Applause)