|I had just bought 1/1000th of a first edition Ian Fleming book, Goldfinger. Now what? Can I go read it? It turns out it is stored in a secure east coast facility, held on my and 999 others behalf by Rally Road. Rally Road launched in 2017 when three friends got together to find a way to democratize the ownership of collectibles. However, this isn’t an NFT but it’s a nice lead into it.|
|You see, the book exists, the asset has been valued and split up. Rally Road forms a special entity that holds the asset and I own shares in that company. When trading, windows open up in Rally Road, I can buy or sell these shares.|
What’s different with a NFT is that it is a completely digital asset, secured by the protection of blockchain, which provides proof of ownership and origin. It’s gone bonkers recently, as if it popped up out of nowhere.
But like any good trend it has been bubbling around for a while.
NFTs are like the serial numbers that a luxury brand would issue for each of their products to verify their authenticity.
It started with Cryptokitties, a nuisance on the blockchain, up to 70% of all ethereum network activity when they opened were for these useless crypto kitties. TechCrunch described it in 2017 as “Launched a few days ago, CryptoKitties is essentially like a digital version of Pokemon cards but based on the Ethereum blockchain. And like most viral sensations that catch on in the tech world, it’s blowing up fast.”
|Like any good idea, this seeded what was to follow. Earlier this year NFTs really blew up, with one piece selling for $6.6m. What?!|
NBA has helped legitimize these
NBA partnered with CryptoKitties creator Dapper Labs to create digital trading cards, where you can, like regular cards, buy a pack, and see what you get. Tokenizing memorable moments.
Here is an example of 1 of 49 Lebron James moments a user could purchase:
|“The NBA licenses the reels to Dapper Laps, which digitizes the footage, making a limited amount to create scarcity. Some NFTs feature highlights in different angles and digital artwork. One is currently listed for over $240,000.”The most recent drop had $230m transacted in two days.|
Like any trend, it requires supply and demand and largely it is driven by collectibles. For something to be collectible there needs to be passionate users who can give it value. Could these crash? Absolutely. But it’s a bit of fun and a hobby in the meantime.
Of course, many hobbies have bigger implications.
Implications for content
What are the implications for brands and content? It’s almost like every job is becoming a trader. Could it be that the latest skill to add to our LinkedIn profile is NFT trader? Well, that might not be too far from the truth.
If securitization of content continues, it will inevitably blend into private content, either directly or indirectly.
The biggest change would be in the supply chain, with the securitization of content, you could better enforce quality controls from your supply chain or encourage bidding. (How? Why?)
i.e. you could issue NFTs to your content creators, then buy them back based on pre-agreed demand metrics.
Or you could buy NFTs as a way to lease content or content objects, then sell them later when they’re not needed.
Check out the OpenSea marketplace.
Buying or creating NFTs that increase in value, may add profit to the department.“It might seem bizarre to buy the “authentic” version of something you can easily screengrab off your desktop, but it’s easy to overlook the emotional value of collecting, especially when it comes to original art. Some of the appeal is owning an authentic item created by an artist you like, and the bragging rights that come with it. Essentially, this isn’t very different than owning an original Andy Warhol painting that can be displayed, sold, or shared—it just happens to be digital.“The one thing that’s not so good about NFTs? It’s going to make for less exciting art heists.
More links on the topic:
– The rise of NFTS and what it means for marketers
– NFTs booms as collectors shell out to own digital art
– If you haven’t followed NFTs here’s why you should start
– Outlet on all things NFT
– NFT marketplaces: OpenSea, Rarible and Zora