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NFTs, also known as non-fungible tokens, are a rapidly growing asset class within the cryptocurrency market. Public awareness of NFTs emerged back in 2021 when a laser-hot trend of collectable digital artworks hit the scene. It was a revolutionary technology because it enabled creators to tokenize, authenticate and sell digital content.
At the start of 2022, the global NFT market was worth around $3 billion. This valuation is expected to reach $13.6 billion by 2027. So you might be wondering why so many people shell out real dollars to acquire virtual goods?
To help you fully understand the potential of NFTs, let’s begin with their evolution leading up to the present, and then move on to their applications going forward.
Today’s digital ownership revolution
NFTs have made the process of ownership and identification of digital assets easier than ever before. The metadata underlying all non-fungible tokens is mapped onto the blockchain in a decentralized and secure manner. This data can be quickly verified and is useful for determining the rightful owner of an asset, not to mention distinguishing similar assets from each other.
Related: Access Web 3.0 with a Click: Toolkit for Blockchain Adoption
Past, present and future: NFT evolution
So far, artists, filmmakers, musicians and other creatives have been among the earliest adopters of NFT technology. Numerous companies and celebrities have also started using NFTs to engage their followers. A recent trend is to use the technology for various types of access cards or proof of membership.
The future of NFTs in the web 3.0 landscape
When it comes to web 3.0, the next evolution of the internet, NFTs are a game-changer. Their widespread use will catalyze decentralization and the establishment of trustless/permissionless networks. As such, NFTs will be fundamental to both metaverse and web 3.0 economies.
Additionally, NFTs are convenient for decentralized verification purposes. For example, tokens can be used to prevent fraud and a host of ID-related security issues because the credentials of each token can be verified on-chain.
Moreover, NFT technology can help brands overcome many of the obstacles that have held them back from more fully adopting digital marketing practices.
Related: Web3 could see its own Dot-Com boom. Here’s how to survive the bust.
NFT profits: obstacles to making money
You’ve heard the saying, it takes money to make money. NFT minting can be profitable, but it is expensive and requires significant investment. While free-mint NFTs exist, most tokens are issued and sold for sums that can scare away everyday investors. Let’s not even get into gas taxes and high marketing costs for issuers!
Earning potential with NFTs
Like cryptocurrency, NFTs are speculative investments and subject to fluctuations. While it is possible that you will make big money buying or selling NFTs, there is no guarantee. That’s why a little homework can go a long way. Before buying anything, get into the habit of analyzing past sales records. This is a reliable way to understand long-term earning potential.
What’s the news with NFTs today?
Given their rapid growth in popularity, NFTs remain an attractive investment opportunity. This is evident from the growing number of deals and the number of companies entering the space. In recent months, market momentum has taken a sharp but temporary downturn due to what has been dubbed the crypto winter.
Despite this, experts predict an increase in global NFT trading volume as the assets live up to their potential in the coming years.
NFT Adoption: Applications and Benefits
NFT projects have become a hot topic, especially in the marketing industry. In 2021, NFT’s market capitalization passed $23 billion, representing 20,000 percent year-on-year growth. Big brands have started investing in the crypto and NFT space:
- According to the Gartner Hype Cycle for Key Technologies, NFTs will transform the functions of marketing in a big way.
- At The Drum Digital Summit, Adcolony and The Drum brought together executives from Coca-Cola, Dole and VaynerNFT to talk about how they used NFTs in their marketing campaigns.
- Tom Simpson, Adcolony’s VP, pointed out that brands can raise capital by selling NFTs. Marketers can incorporate NFTs into their campaigns or as part of their customer relationship management (CRM) mix.
- Avery Akkineni, president of VaynerNFT, stated that marketers may be put off jumping into NFTs in the early stages because communities are still small. After all, Opensea averages only 20,000 daily users. However, getting embedded early can help cement brand authenticity in the metaverse.
- Coca-Cola recently launched a campaign where their story revolved around the metaverse and real life.
- Dole’s campaign involved the brand’s mission of healthy nutrition. The team talked about the technology’s learning curve and discussed what they learned along the way.
Related: Make your brand a household name using the power of NFTs
So how can NFTs be used in the context of modern marketing?
- NFTs provide ownership and a way to connect directly to local communities.
- Brands are no longer limited to offering physical goods and services. NFTs can be anything digital – artwork, 3D animation, music, countries in the metaverse, etc.
- Brands can track the ownership and origin of their assets and ensure that the data associated with them is accurate and cannot be tampered with.
- Consumers demand transparency and NFTs provide businesses with a way to meet this need.
- NFTs offer a way for brands to engage with their customers more effectively.
- NFTs eliminate complex logistics such as shipping, taxes and storage costs.
NFT marketing is more than getting your NFT in front of your target audience. It’s about using creative digital marketing strategies to generate unique and meaningful experiences while achieving long-term marketing goals.
According to AsiaPac Digital, a smart way to enter the space is by partnering with experienced digital NFT marketing agencies to generate buzz and get your NFTs to the right audience.
To achieve successful adoption, digital marketers must learn NFT concepts that are constantly evolving, adopt NFT influences and ensure legitimacy in their activities.
The best opportunities for significant profits often occur when markets are new. No risk, no gain.