Our Digital Future Will Be Tokenized
As we continue to evolve into a deeper digital connection, blockchain technology is giving us a much more intimate relationship with our favorite brands and entertainment. These bits of digital loyalty are called NFTs (non-fungible tokens), and they will be a part of our future web experience.
What are NFTs? They are limited edition tokens, typically in the form of an image, video, music, or text, in which they provide a certain value to the holder. This value could be in the way of collectability, similar to one who collects stamps or Funko Pop! figures, or with utility in which one gets special benefits by holding on to a specific token. All NFTs are created with a cryptocurrency and smart contract.
Since we are in the early stages of this space, many companies such as VeVe (Disney license) and Palm (DC and Warner Bros. license) have opted for custodial services. This is a safe way for a customer to purchase the NFT and have it placed in their respective account on a website until one learns how to utilize wallets for self-custody — however, having your tokens held by a company defeats the purpose of NFTs entirely. They were designed for you to hold them yourself with a decentralized wallet such as MetaMask or Coinbase Wallet.
Now I will turn to current use cases for NFTs starting with “Proof of Attendance.” I have had the privilege of listening to amazing artists who are trying to make their “Big Break” thru a collaboration between Bandsintown and Forj. They have been putting on a series of shows in which they have an artist perform live on their virtual stage. If you stick around for the concert, a special art token will be sent to you of the performer, date, and time of the show. Bandsintown also has an incentive on attending all ten of their live shows in 2022: a special token and physical poster of all the artists.
The above mentioned will be a common occurrence in the future with venues such as concerts, trade shows, sporting events, and political campaigning. It’s a way for fans to remember an event and have digital proof of attending via a blockchain.
Retailers such as Macy’s, Old Navy, and GameStop have jumped into the action forming their own NFT divisions.
Last year, Macy’s partnered with NBC giving out digital collectibles during their Thanksgiving Day parade. Last month, Old Navy had a promotion commemorating the year 1994, the year the clothing giant opened, by giving out, you guessed it, 1994 different NFTs for .94 cents — this token also gifted you a free physical 4th of July t-shirt from Old Navy. And GameStop has launched a collectible marketplace where gamers and gaming companies can create special art to sell.
By giving customers a piece of their brand with a digital token, these companies are finding room in crypto wallets around the world, giving them a chance to consistently interact with consumers in fun, innovative ways. Many of these smart contracts also have royalty fees built in which means that if one sells their Magic the Dog NFT, Old Navy will receive 10% of the sale. This opens up a whole new revenue stream via a secondary market.
Bands are now finding ways to engage with their base by having them invest directly in their music.
Royal.io is a company working with The Chainsmokers, Nas, and other performers by having them sell tokens of their songs or albums. This would allow artists to skip record labels altogether and dish out a percentage of royalties to fans depending on which tier token they held. One could think of it as a Kickstarter of sorts, but in a decentralized, yet programmable manner. For example, owning The Chainsmokers token allows one to receive streaming royalties from their album until they decide to sell or gift it to another fan — ownership would be transferred flawlessly thanks to the built-in smart contract.
With comics, we are seeing an immersive experience with Palm’s DC Bat Cowls. Bat Cowl token holders have the ability to direct in the creation of an upcoming comic called “Batman: The Legacy Cowl” — the title was decided through a vote earlier this month. This token also gives holders special benefits such as Warner Bros. events (both real world and virtual), additional NFTs, a Snapchat filter, and more unannounced rewards thanks to its two-year roadmap.
In the future, we will see the $200 billion dollar gaming industry use NFTs for digital purchases. When you purchase a video game thru the Playstation Store, this gives you a license to play it under the account (gamertag) you signed up with. If boredom arises or the game is finished, you cannot transfer it or sell it to anybody else. With blockchain technology, gaming publishers will have the ability to sell tokenized versions of their games, replicating a physical product, in which a gamer can sell the game on a secondary market (royalties built-in for the publisher). This will give gamers new funds to buy the latest titles as well as revitalize sales for older ones. It’s a win-win for all — this will also be used in books, comics, movies, and music.
As with any new technology, ideas will be introduced with businesses and entertainers testing them out — eventually the terminology of NFT will totally disappear. Every digital purchase and loyalty system will be tokenized. Heck, even our lives might be tokenized at some stage via the metaverse.
For now, sit back and enjoy the ride, even the boisterous bumps, as the next era of the Internet is being built.
Here are other notable companies who have tested the NFT waters: Time Magazine, Coca-Cola, Chipotle, Kia, Hyundai, Chevrolet, FC Barcelona, Burger King, New York Knicks, New York Jets, Chicago Blackhawks, Ticketmaster, Coachella, Wawa, Discovery Channel, Laffy Taffy, Gucci, Adidas, Nike, Red Bull Racing — and many more!
