In 2021, the hype around the sale of NFT art was so great that it even overshadowed the use of real assets in the real sector and the service sector.
However, for now, the non-fungible token industry is still associated exclusively with digital art and GameFi. In this article, we will explain how NFT technology can help traditional businesses and why it should be used.
Before understanding the scope of NFT technology, you need to understand what this technology is.
NFT is Non Fungible Token. This technology today has a huge impact on all areas of human life. It allows you to digitize interaction with any virtual and physical goods.
How does NFT work
As mentioned above, tokens are non-fungible. Non-interchangeable can be called a thing that is unique due to its characteristics and cannot be formally replaced by exactly the same.
As an example, you can take the currency – this is a classic example of a fungible asset. Any dollar is equal to another same dollar. But an example of something non-interchangeable is, for example, your apartment. It is unique, although initially, it was no different from other similar apartments, in the process of ownership, you have made it unique.
Certificate of Authenticity
How does NFT technology work? In general, we can say that it is a certification system on the blockchain. Certification can be used not only in the virtual realm but also to mark real assets, as well as tokenize real services like digital concert tickets or gym memberships.
In order for the business model to function, you need a developed system that can secure ownership of the product or the right to use the service. In the physical world, these procedures happen all the time – for example, you may be granted the right to use a cinema chair for one session.
In the digital realm, verifying ownership and establishing a buying and selling process is more of a challenge. The fact is that the nature of digital assets is such that an unlimited number of copies can be made in it. And all these copies will be considered “replaceable”, that is, identical. In this case, the original cannot be distinguished from the copy.
This is where the value of non-fungible tokens came from – they make it possible to establish ownership of digital assets, and also allow you to streamline the sale of unique goods and services.
Today, for any area of traditional business, the opportunity to be represented on various platforms – on marketplaces or social networks – is extremely important, so the digitization of economic relations is extremely important.
Way to expand your audience
Many people in the blockchain industry prefer to keep a significant portion of their assets in cryptocurrencies and NFTs. They are not only looking for ways to buy a valuable digital asset or spend cryptocurrency, but also strive to support any project that is being implemented in the NFT industry.
The more companies start using NFT, the easier it will be to promote a favorable legal environment in the crypto market. That is why your NFTs will be in demand among buyers not only for speculative or aesthetic reasons but also in order to generally promote this industry as it grows.
Some companies create unusual solutions to attract an audience with cryptocurrencies. Since cryptocurrency is not a legal means of payment in many jurisdictions, one has to resort to various tricks – for example, placing certificates and coupons of various traditional trading networks to exchange for cryptocurrency on crypto-oriented marketplaces.
However, creating your own NFTs can help increase the awareness of any brand among the crypto audience.
It is not uncommon for different blockchain companies to use cryptocurrency and NFT giveaways as a reward for their users for active participation. In this case, they use airdrop technology, which is a kind of transaction by which a company sends tokens from its portfolio to the user’s portfolio.
NFT airdrops can also be used in traditional businesses. For example, if someone has a trusted online casino India – then the owner can reward its members for regular visits or use this promotion as a regular promotion. Such an NFT can be grown in the form of a subscription to a club.
Thus, NFT technology is not just a newfangled phenomenon, but also a promising technology that will help grow a business. That is why it has many advantages and will be useful not only in the field of cryptocurrency but also in any business area of the traditional format.