On May 3rd, 2014, Kevin McCoy minted his first crypto- art and named it “Quantum”. This was a pixelated image of an octagon filled with denoting circles, arcs & other shapes which share the same center, with larger shapes surrounding smaller ones and hypnotically pulsing in fluorescent hues. Interestingly, this artwork was auctioned for $1.47 million in June 2021. Although it’s relevance and value have been facing a lot of criticism in the crypto world, it is still regarded as the first ever “NFT” (Non – fungible token).
An NFT is a digital asset that represents real-world objects like art, music, in-game items, and videos. They are bought and sold online, frequently with cryptocurrency and they are generally encoded with the same underlying software as many cryptos. As the name represents these are non-fungible i.e., unique, generally one of a kind, or at least one of a very limited run with unique identifying codes.
Although NFTs have been in the market since 2014, it was only last year that the concept gained all the attention. If we club this attention with the below statistics, it just reaffirms the belief that NFTs are here to stay and grow.
In the second half of 2021, many brands began to participate in the NFT market, including Nike, Adidas, Budweiser, and Disney. It is likely that more brands especially in the retail sector will tap its potential. Some of the big brands and their NFT initiatives are as stated below
Imagine buying a pair of sneakers that would automatically upload a digital version of it into your “virtual locker”. That is exactly what Nike has done with their initiative of Cryptokick. These allow their buyers to not only own their sneakers in the real world, but also have the same ones in the Digital world as well. The Digital counterparts can be collected, traded and resold on NFT markets providing these a digital seal of authenticity.
The National Basketball Association (NBA) released ‘NBA Top Shot,’ a new online marketplace of licensed digital collectables where fans can purchase moments from their favourite teams, players or matches and earn a certificate along with an original clip. This helped them engage more with their consumers, emphasising on their “Direct to customer” strategy.
In February 2021 Taco Bell created and put on sale a series of NFT gifs on the specialized digital marketplace Rarible, with all of them selling out in under 30 minutes. The resale value of some of these pieces reached $3,000.
The Coca-Cola Company launched an NFT auction in July 30 2021 for International Friendship Day, making available its first collection of digital collectables that “re-imagine some of Coca-Cola’s iconic assets for the metaverse. The proceeds of this campaign all went to Special Olympics International, the world’s largest organization for disabled athletes.
NFTs allow artists to buy and sell their craft. Artists can also gain profits from royalty payments in NFTs through smart contracts.
The metaverse buzz is everywhere, even though they have not fully taken off. When metaverse do finally gather some more steam, though, NFTs will be at the heart of their immersive technology.
The gaming industry is already vibrant, and online gaming has given NFTs an opportunity to realize their truest potential. With the two coming together, players can buy and own in-game assets, in the form of NFTs, in crypto-powered play-to-earn games.
NFTs have proven that fundraising can be hassle-free and decentralized. People can use smart contracts to create NFTs that donate money with the security of blockchain technology.
As exciting and engaging the technology sounds, it also comes with a fair share of challenges. They are volatile, do not generate direct income, are highly susceptible to cyber frauds and have also been termed to cause environmental damage (carbon emissions due to the mining activities).
As far as organizations are concerned, they need to keep a keen eye on the growth of NFTs. As they prepare for the Digital influx of next generation payment technologies, they should ensure that they are equally prepared to ready the infrastructure for NFTs. Some of the use cases that we as an organization can explore are as stated below:
Since security is a big challenge for companies creating and trading NFTs, we can provide Cyber Security solutions to help them navigate through this
While investing into Metaverse we need to be well prepared to handle the payments through NFTs and cryptocurrencies as well
Since these codes reside on Blockchain technology we can provide our customers with pro-active and predictive monitoring solutions available through our Blockchain offerings
The speed at which the organizations can tap into their potential and exploit it in the right manner is what will set them apart. They can choose to debate over their growth or fall, but what they can’t do is to ignore them.
