In the world of Cryptocurrency, NFT Marketing is a new buzzword that has emerged in recent years – it’s time to consider NFTs. NFT stands for Non-Fungible Tokens, and they have been taking the world by storm as a new way to invest in digital assets. However, NFTs are not just for investing; they also have significant potential as a marketing strategy for businesses.
In this article, we will explore what NFT Marketing is and how businesses can invest in this strategy. Firstly, let’s understand what NFTs are. In the world of cryptocurrency, a fungible token is an asset that is interchangeable with other assets of the same value. For example, a bitcoin is a fungible token because one bitcoin is equal in value to another bitcoin.
On the other hand, a non-fungible token is a unique asset that cannot be exchanged for another asset of the same value. NFTs are used to represent digital assets like art, music, videos, and even tweets. They are unique, one-of-a-kind assets that can be bought and sold like any other digital asset. Now that we know what NFTs are let’s explore their main business purpose.
As well as how they can be used for marketing purposes. Whilst, bearing in mind, NFTs are a great way for businesses to engage with their audience and create a sense of exclusivity.
The Main NFT Marketing Purpose For Businesses
The process of verifying the ownership of both physical and digital assets is an integral component of most businesses and systems. Furthermore, throughout history, individuals have collected scarce and valuable assets such as art, jewelry, and land. Today that trend has extended into collectibles like autographed memorabilia, trading cards, and more.
Traditionally, the ownership and authenticity of these assets have been facilitated by paper-based or centralized digital systems, which are often inefficient, present friction in the transfer of assets, and leave room for fraud. In 2017, Dapper Labs launched a decentralized application on the Ethereum blockchain called CryptoKitties, which revolutionized the Crypto market.
Eventually, which was the first true example of digitally verifiable and transferable non-fungible tokens. These non-fungible tokens, or NFTs, are collectible game characters with randomly assigned attributes that make each CryptoKitty more or less rare. Using the native digital signature scheme on the blockchain, it is easy to verify the authenticity of each CryptoKitty.
As well as its unique attributes, and its owner. Furthermore, the friction and risk of fraud in the transfer of these assets to a new owner are drastically reduced. Today, the foundational invention of NFTs made popular by CryptoKitties is being applied to a broad set of use cases. From digital art and in-game items to digital identity credentials and land titling.
Unlimited Editions
By creating limited edition NFTs, businesses can reward their loyal customers and create hype around their brand. For example, an artist can create an NFT of their artwork, and only a limited number of copies will be available for purchase. This creates a sense of urgency among the audience, and they will be more likely to make a purchase.
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Loyalty Programs
Another way businesses can use NFTs for marketing is by creating a loyalty program. By issuing NFTs as rewards, businesses can incentivize their customers to engage with their brand more. For example, a restaurant can issue NFTs to their regular customers, and these NFTs can be redeemed for discounts or free meals. This creates a sense of exclusivity and makes the customers feel appreciated, which can lead to increased brand loyalty.
Customer Experience
Businesses can also use NFTs to create unique experiences for their customers. For example, a sports team can create an NFT of a game-winning moment, and only the owner of the NFT will be able to access behind-the-scenes footage of the game. This creates a sense of exclusivity and gives the customer an experience that they cannot get anywhere else.
How Businesses Can Invest In An NFT Marketing Strategy
Now that we have explored how NFTs can be used for marketing purposes let’s explore how businesses can invest in this strategy. Firstly, businesses can create their own NFTs and sell them to their audience. For example, a fashion brand can create an NFT of its latest collection and sell it to its customers. This creates a new revenue stream for the business.
And also, creates hype around the brand. Basically, Non-Fungible Tokens (NFTs) are designed to be ( i) cryptographically verifiable, (ii) unique or scarce, and (iii) easily transferable. Leveraging cryptographic signatures native to the blockchain on which an NFT is issued, one can easily determine the origin and the current owner of the asset in question in seconds.
Oftentimes, a non-fungible token is created by an artist, creator, or license holder through a process called minting. Minting is a process that involves signing a Blockchain transaction that outlines the fundamental token details, which is then broadcasted to the blockchain to trigger a smart contract function that creates the token and assigns it to its owner.
Under the hood, a non-fungible token consists of a unique token identifier, or token ID, which is mapped to an owner identifier and stored inside a smart contract. When the owner of a given token ID wishes to transfer it to another user, it is easy to verify ownership and reassign the token to a new owner.
Marketplace
Another way businesses can invest in NFT Marketing is by partnering with NFT marketplaces. Nft marketplaces like the open sea, variable, and super-rare are Crypto Trading Platforms where users can buy and sell NFTs. By partnering with these marketplaces, businesses can reach a wider audience and increase their visibility.
They can also create unique experiences for their customers by offering exclusive NFTs that can only be purchased through the marketplace.
Collaboration
Lastly, businesses can also invest in NFT marketing by collaborating with artists and creators. By collaborating with artists and creators, businesses can create unique NFTs that are relevant to their brand. This can create a buzz around the brand and increase engagement with the audience.
Overall, non-fungible tokens can be created to represent virtually any asset, whether physical, digital, or metaphysical. However, the most common NFT assets are digital art, digital collectible items, pieces of content like video or audio, and event tickets.
Other types of use cases NFTs can be utilized:
- NFT event tickets — companies can distribute and sell tickets to events using NFTs, reducing friction for verification of ownership and authenticity and helping to eliminate fraud. Furthermore, there are infinite possibilities for post-purchase collectability of tickets through exclusive experiences and digital art.
- Fan/customer engagement – brands or organizations can issue or sell NFTs that represent exclusive collectibles, products, experiences, or voting rights for the future development of a product or service in order to deepen the engagement customers/fans have with the brand/organization.
- In-game items – video games are walled gardens today, players do not own their digital items and secondary markets are hard to implement. NFTs can be used to create a widely varied ecosystem of in-game digital items. Essentially, that can be bought sold, and exchanged on open secondary markets and used across a broader gaming ecosystem rather than anchored to one game
- Digital collectibles – organizations or individuals who have a well-defined brand can create NFTs that can be sold on the open market to fans or brand-loyal customers as collectibles. Think of a company like Disney that has huge brands of licensed universes like Star Wars and Marvel
- Credentialing – identity credentials like driver’s licenses or professional certifications with a wide range of cloud certificates can be issued as NFTs. More so, to help reduce the burden of proof for these credentials and eliminate the siloed nature of credentials today
- Royalties – NFTs can track fractional ownership or royalty entitlement for a piece of media or content or art.
What Is A Fungible Vs A Non-Fungible Asset?
The concept of fungibility refers to the ability for an asset to be exchanged equivalently with another asset of like kind. A practical example of a fungible asset is the US Dollar, where you can trade one dollar for another knowing the value is exactly the same regardless of which dollar you have. In contrast to fungible assets, non-fungible assets are valued differently.
Based on their unique attributes and scarcity. One such example of this is baseball cards, where each individual baseball card is assigned a unique value depending on its attributes such as edition number, design, player, and rarity. Baseball cards are not fungible because every baseball card is valued differently and thus cannot be exchanged directly for any other baseball card.
Conclusion:
In conclusion, Non-fungible tokens, often referred to as NFTs, are blockchain-based tokens that each represent a unique asset like a piece of art, digital content, or media. An NFT can be thought of as an irrevocable digital certificate of ownership and authenticity for a given asset, whether digital or physical.
On that note, NFT Marketing is a new and exciting strategy that businesses can use to engage with their audience and create a sense of exclusivity. NFTs are unique, one-of-a-kind assets that can be used to represent a variety of digital assets. Plus, there is also a v variety of services for you to choose from like Spot Trading, P2P Trading, and the like.
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