What is physical NFT and how to sell physical goods as NFT

by James · December 16, 2022

Table of Contents

What is Physical Non Fungible Token (NFT)

Non-fungible tokens (NFTs) has grown in popularity in recent times; be it the brazen cyber attack or multi-million dollar sale, it’s hard to escape the NFT phenomenon these days. As NFTs make their way into the mainstream, their main applications are not just the inclusion of digital art, fashion, music, and the metaverse. In the crypto space, physical NFTs are also carving out space. But what exactly is it and how can you sell an item as an NFT? Let’s find out.

Important takeaways

Physical NFTs are cryptographic tokens linked to physical assets that provide ownership of artworks, goods, real estate deeds and other assets.

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Physical NFTs have two parts where the digital is stored on a blockchain and the physical is the one you own in real life.
Physical NFTs are the strongest use cases for enhancing personal experiences through blockchain technology.

Physical NFT: What is it really?

While NFTs are mostly associated with the art world, they are also issued and sold as a virtual representation of off-chain assets, including antiques, consumer goods and collectibles. In physical NFTs, they act as a cryptographic token of ownership over a physical and real object for the buyer if they want to have a physical version of the NFT. To put it simply, a physical NFT is nothing more than a non-fungible token linked to a physical asset.

Also read: The most expensive NFTs ever sold: Here is the top 10 list

Due to the fact that physical NFTs are tied to real-world assets, they are also known as “phygital NFTs.” Like all other non-fungible tokens, physical NFTs can also be sold or redeemed for the physical asset they are attached to.

How do they work?

A physical NFT typically consists of two parts, where one refers to the physical asset and the other suggests the digital asset issued on a blockchain. The physical assets, on the other hand, are usually linked to a corresponding unique identifier, including a QR code or an NFC (near field communication) tag.

Also Read: NFT to be lifted from Income Tax Act in India?

Physical NFTs not only contribute to the authentication of the non-fungible tokens but are also useful in terms of supply chain management. With traceability and a certificate for blockchain technology, it becomes easier for physical NFTs.

Some examples of physical NFTs

While the focus in the NFT space is not yet reflected on physical NFTs, some big names have introduced themselves in the domain.

In 2021, Adidas, the German sportswear company, made its way into the world of the metaverse by posting an NFT collaboration with the famous Bored Apes Yacht Club. Shoppers can get their hands on exclusive physical merchandise that includes hats, hoodies and tracksuits.

Co-founded by Beeple, WENEW is a platform that sells “iconic” moments in history as well as cultural milestones such as NFTs.

Popular fashion retailer GAP has also joined the NFT space by launching its first NFT collection offering physical hoodies. The project was in collaboration with Brandon Sines, the artist of Frank Ape.

Advantages of physical NFTs

There are a number of benefits that come with physical NFTs – from proving authenticity to granting transparency.

Improve personal experience

While NFT memberships are already in demand for being the gateway to online communities full of virtual experiences, physical NFTs work the same way. The main difference is that the value you will get is completely based on the real world. For example, event tickets are becoming one of the best cases for changing the personal experiences through physical NFTs.

Adds an extra layer of transparency

Buying a used collectible can often be challenging, as you usually get insignificant amounts of information about the previous price and market value. Having an NFT will give you the freedom to access a complete view of the NFT’s transaction history.

Eliminate the risk of counterfeit products

A major advantage of physical NFTs is that they have the ability to prove authenticity and provenance. With a physical NFT, you can easily eliminate the chances of someone counterfeiting your product. Using a QR code or NFC technology, businesses can easily link a product’s serial number to an NFT that will help buyers check the authenticity of the product as well as track its price history.

How to sell physical goods as NFT?

These days, it’s safe to say that practically anything can become a symbolic form. Many companies are already taking advantage of this fact by linking physical assets with non-fungible tokens. When it comes to selling a physical commodity as an NFT, there are mainly two ways to do it.

You can either take the manual approach, where you have to digitize the artwork you are willing to transform into an NFT to sell it on the blockchain. But if you’re selling a physical product that isn’t art, it’s better to trust a platform that approaches it manually.

For artwork, you only need a 2D scanner or a high-resolution photograph to make a digital copy. This becomes challenging in the case of a 3D object, as you may need design software or a 3D scanner. Once you’ve digitized your physical NFT, decide which blockchain you want to store them on. After choosing the blockchain, you can create your NFT which you can sell on various NFT marketplaces such as Exchange.art, OpenSea and more.

Last word

The world is moving forward with the gradual introduction of Web3 and blockchain technology into the mainstream. In this scenario, physical NFTs bridge the gap between physical and digital. By transforming how we interact with real-world products, NFTs are doing the impossible. Connecting NFTs to physical objects has the potential to become a crucial use case of NFTs and blockchain technology.