Over the past few years, non-fungible tokens have increased in popularity with multi-million dollar moves. But what are NFTs and how are they changing business?

What are NFTs?

First of all. NFT stands for “Non-Fungible Token” and means ownership of unique digital assets (eg Gifs, video games, songs, digital art, etc.). Unlike fungible tokens that can be exchanged for the same amount and have a fixed rate (a euro can be exchanged for another euro), NFTs are unique and their value depends on their properties.

Based on blockchain technology, this means that when someone exchanges an NFT, a file will be created inside the blockchain. As a result, it will no longer be possible to copy, delete or modify it.

What are NFTs used for?

Due to their uniqueness and ability to clearly indicate who their creator or owner is, non-fungible tokens are becoming popular among artists, collectors and content creators.

In addition, also by creating NFTs, you can decide how many there will be and what information will be publicly available. you need to program royalties to be paid every time an NFT is transferred from one person to another. Since the process does not involve the participation of third parties, business is faster and more transparent.

But what makes people buy NFTs? If we look at the buyers’ point of view, this is easy to see. Clothing NFTs, for example, remove the limitations of physical objects and space. In addition, the items do not spoil and can be used repeatedly. As people spend more time online, the need for virtual properties is increasing. There are social networks and video games already partnering with brands to create new realities and expand the scope of NFTs.

Using non-fungible tokens (NFT) for business

Increase in value

According to research by Ripple, NFT sales will exceed $17 billion by the end of 2021 as NFT use cases expand beyond digital art. This has led to a stronger digital experience and ownership for users.

«As interest in NFTs (and tokenization in general) grows, so will the development of functional use cases such as digital experiences, fractional ownership, real estate and carbon credit markets.»

«Another use case of particular interest to Ripple is tokenized identities to address key consumer trust, privacy and security concerns. By decentralizing an individual’s identity as an NFT, we can help both companies, and to give consumers back control over the ownership of their belongings, which is critical for participation in the global financial system, especially for those who are excluded from it.»

«By contributing to the growth and adoption of NFTs through initiatives such as Ripple’s $250 million Creators Fund, we can directly support the new era of tokenization to change the way people own, buy, sell, track and manage assets of all kinds.»

Understanding consumer behavior

NFTs have also shown the ability to demonstrate to organizations the interests of their customers without the need for marketing teams to review Internet usage data. Over time, NFTs can be used to learn more about what customers need before a product is purchased.

«NFTs can represent any real or virtual good, because the greatest value for them, apart from financial, is the communities that form around the owners. It’s a marketer’s dream because before NFTs, it wasn’t easy to know that a person was interested in a product or brand unless they purchased it or engaged with it by signing up for email updates, liking posts on Twitter, etc.»

«The NFTs that a person holds in their wallet can be seen as an expression of their interests, and the fact that this is publicly available information is a powerful tool for targeting individuals and communities. For example, you can see who owns BAYC or crypto punk, and create NFTs that are exclusive to those owners, or create events that only people with those NFTs can join. This opens the door to finding new communities that have formed around NFTs that you think might be relevant to your products or services.»

«We will also see NFTs being used much more widely by businesses and consumers as an attestation tool. For example, if I sign up for a service based on membership, the service provider can provide me with an NFT that I can use as proof of valid membership. Or maybe if I have to prove that I have a valid travel insurance policy, an NFT can be issued by my insurance provider. NFTs can also be used to represent legal agreements between organizations or ownership rights. The list is almost endless as to where it will spread over the next few years, and I believe we will see virtually no industry that has not been touched by NFTs.»