How do NFTs have value?
The value in physical objects is clear: they’re tangible and unique goods that tend to grow in value as they become scarce over time. Digital assets meanwhile run the risk of being duplicated. Still, NFTs are widely understood to have tangible value; because each digital asset is unique or limited in quantity, NFTs have the potential to benefit from the same sense of scarcity that applies to physical goods. In minting your own NFT, you are in control of how many are produced (ie, the scarcity of the asset) or a specific window of time in which they are available to buyers.
Are there any moves being made to increase the accessibility of NFTs?
NFTs are a nascent technology. That, paired with “gas” fees (essentially a transaction fee that changes throughout the day based on network traffic) can make minting NFTs an expensive and confusing affair. But many are already making the creation or purchase of NFTs simpler for the average user. Platforms have already emerged allowing the purchase of NFTs via credit card, for instance, cutting out the need to purchase cryptocurrency altogether. But for now, the sense of exclusivity may work for some—the fashion and luxury industries, priding themselves for being at the cusp of artistry and craft, have adopted the technology well.
Should I be concerned about security?
Blockchains are decentralized, relying on a network of servers that confirm and validate transactions along a digital ledger. This means the record of ownership of an NFT or cryptocurrency isn’t contained on a single server, making them tamper-proof and more secure by design. Therefore, even if the server where the NFT is hosted is taken down, the NFT is not lost due to the decentralized nature of the mechanism that verifies the authenticity of NFTs. Still, NFTs are not 100% safe. They can be stolen from their owners’ crypto wallets through phishing schemes, and marketplaces that mint or exchange them can be hacked. NFT thefts occur when an owner is tricked into opening up their digital wallets and transferring the ownership of their NFT property.
How much does it cost to create NFTs?
When it comes to the cost of minting one, look at a minimum of $70, with costs fluctuating based on gas fees (which can drive costs to over $100) and the volatility of the cryptocurrency used to pay. There is also a commision fee levied by the host server of the initial sale of the NFT that a seller bears, which ranges between 3% and 15%.
How can marketers utilize NFTs?
NFTs may not be right for every single brand or every single industry. A brand needs to understand what it wants to achieve with an NFT activation, and an NFT should be part of a longer-term roadmap where it can provide unique benefits and virtualized experiences for people that wouldn’t be experienced anywhere else.
One of the best examples in use case for NFTs can be seen in events and entertainment. For example, NFT concert tickets can open up a world of opportunities and ways for artists to connect with their audience. The NFT not only acts like a music pass but is also a collectible and a tradable asset. It can be a tactical enablement tool for marketers in which users can unlock exclusive experiences like early-access to sale tickets of the next concert, special meetups with the artists, and cross-promotions with other brands. Concert tickets are the one of the most obvious places right now, especially when there’s fandom or a community that hinges on it. Used this way, artists and creators benefit because they can bypass intermediaries to connect directly with their audience.