Last Updated 1 month by Emily Standley-Allard
In today’s rapidly evolving digital landscape, Non-Fungible Tokens (NFTs) have emerged as a game-changing technology but can they benefit businesses and transform industries? Let’s take a deep dive in!
NFTs or non-fungible tokens are unique digital assets that leverage blockchain technology to establish verifiable ownership of digital and physical items. They are tied to a specific certificate to indicate ownership and prevent others from accessing information or digital goods. They’re most commonly used in the transfer of personal data, to show a purchase of a unique piece of digital art or for intellectual property. They are a bit different than the common tokens uses by Bitcoin.
Businesses are harnessing the power of NFTs to transform various aspects of their operations, from ownership verification to customer engagement and revenue generation.
Fungible tokens are tradeable, such as Bitcoin and cryptocurrency, where you can send your coins to another user. Non-fungible means there is one copy and it cannot be changed. Think of it like a collectible signed baseball.
Say there is one winning championship baseball with a particular player’s signature. You can’t trade that ball for another with a different signature and still have the same item. NFTs are similar in that they can’t be changed to something different or traded to make them something new.
NFT market revenue will hit $2.4 billion in 2024, with an expected annual growth of 11.34% through 2027. What are some benefits to utilizing NFTs and how can we expect them to transform industries such as publishing, digital art and medical data?
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1. Gain Ownership Records
NFTs are crucial for people handling unique digital goods. However, they can also be utilized to certify physical items, collectibles and valuable works of art. Since they are non-fungible, there is one certificate with ownership markers. Even if someone tries to forge a fake painting and certificate, the original will still be secure and identifiable as the rightful one.
Another benefit is the ability to trace ownership history. Traceability provides defense against situations such as people trying to pass a book off as their own when someone else wrote it. NFTs are changing the digital publishing landscape and will help big players fight against pirated works.
2. Accept New Payment Types
NFTs offer peace of mind so those selling online content can protect their work, open up their doors to new subscribers and accept new types of payments.
They allow the user to sell their asset, give it to someone else but still keep a traceable record to prove ownership. For art pieces, this might be particularly valuable. The artist can sell the item and the buyer can gift it to a family member or friend. The certificate still shows it is an authentic, original work of art but changes ownership to the new person.
NFT currency goes to a crypto wallet. The assets might include songs, photos, movies, games and physical goods. One interesting thing about utilizing NFTs with a digital wallet is that the wallet can hold both fungible and non-fungible assets, making payment almost seamless.
3. Increase Metaverse Revenue
The metaverse is a prime example of how companies can tap into the power of NFTs and assign digital assets to individuals. The metaverse is worth an estimated $56.6 billion and forecasted to reach approximately $936.6 billion by 2030.
One thing holding some people back from utilizing the metaverse more is fears over their personal data falling into the wrong hands or paying for something and not receiving it. Utilizing NFTs can add a layer of trust to the process and is a more secure method of selling online art, avatars and add-ons.
4. Develop a Loyalty Program
One interesting thing you can do with NFTs is to layer them. By doing so, you can develop a rewards system and have levels to relate to the level of referrals a customer sends or how much they engage with your brand.
Gamify your programs so people can earn tokens for different tasks and spend them on various rewards–digital or physical. The program is easily automated and integrated with loyalty software.
5. Protect Your Intellectual Property
Over 4.5 billion people use the internet, putting your intellectual property in the hands of users you may not have intended. When you certify digital goods for use by a specific person, you limit who can pass your work off as their own.
The publishing industry is impacted by piracy and plagiarism. Many argue new advances in artificial intelligence (AI) is nothing more than taking someone else’s work and regurgitating it. NFTs help ensure you keep control of your work and can claim ownership. You can also trace who first owned the work and the hands it passed through, giving you ammunition should you need to take copyright violations to court.
6. Create Traceability in Supply Chain
Use certifications to create traceability in your supply chain. The food industry is well-known for using tracking information to notify food product producers and retailers in the case of contaminated food.
However, you can also trace any type of product you might imagine. Find out whose hands an ebook passed through. Learn whether people illegally shared your song download. Keep track of product inventory to prevent theft.
People are just starting to fully understand how NFTs impact traceability. Expect this area to see growth in the next few years.
7. Increase Security
The Department of Homeland Security reported ransomware attacks increased 47% between 2020 and 2022. With more data breaches than ever before, it’s crucial companies step up and protect sensitive data.
Sectors such as medicine and finance are particularly vulnerable to attack as they store data cybercriminals can use to open fraudulent accounts. With tokens, only the person with the certificate and the keys can access the information. Non-fungible tokens add another layer of protection.
Why NFTs Will Increase in Popularity
You can likely see the many benefits of using secure tokens in business dealings. Companies that embrace the technology will have more secure transactions and less data breaches. You’ll reach new customers looking for companies offering the latest technology to verify ownership. Once you understand how the blockchain works and why you should offer multiple ways for people to complete a transaction with your brand, you can use the currency to grow your customer base.
Eleanor is the editor-in-chief at Designerly Magazine. She was the director at a marketing agency prior to becoming a freelance web designer. Eleanor lives in Philly with her husband and dog, Bear.
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