The digital space is always evolving. Possibly one of the biggest developments in the recent year is the inception of the NFT. NFTs, or non-fungible tokens, are non-interchangeable units of data stored on a blockchain that can be sold and traded. NFTs can be exchanged for one another, but no two are the same.
Simply put, NFTs are images created by artists in the digital world that can be purchased using cryptocurrency. With their purchase, a customer receives all the rights to the original image to use and distribute as they wish. The images can go up or down in value depending on how popular the NFT project is. While the average price of an NFT is around $2,000, this amount is totally dependent on the project and can go up to hundreds of thousands or millions of dollars.
How did NFTs gain value?
Over the years, people have assigned value to everything under the sun. Occasionally, one of those ideas takes off. In 1633, it was Tulip Mania in Europe. The price of tulip bulbs had reached such an unbelievable height that people began trading traditionally valuable items like homes and estates for tulip bulbs. Though the tulips weren’t as valuable as homes, consumers’ perceived value of them caused a shift in the market.
This phenomenon is similar to what is happening in the NFT space. At first glance, it appears consumers are paying extreme amounts of money for .JPEG images that might have been worthless or of low value months ago. But the NFT craze, as well as the additional perks they bring, is just getting started.
How are NFTs moving beyond the digital world?
Owning an NFT doesn’t just come with a digital file or the status of ownership, it can come with additional perks and exclusive benefits. Bored Ape Yacht Club NFT owners, for example, gain entry to private events, access to additional drops from the brand and copyright licenses for commercial use. Gary Vaynerchuk, owner of VaynerMedia, is releasing an NFT that gives holders access to elite dining experiences.
This added layer within NFTs lets buyers turn digital art into real-life perks. It’s giving consumers the chance to build communities with other holders at parties, events and experiences. And it’s giving advertisers more chances to get creative and join the equation.
So, are NFTs here to stay and what will they become in the future? We’re excited to keep a pulse on this space and see how it evolves over time.
Learn even more about the digital world on our Brogan & Partners blog.