Adoption of Blockchain Technology with NFTs

The NFT marketplace has grown over 10x since 2018. From artists to musicians to athletes, everyone is looking to launch some form of NFT to tokenize their work and profit from it. While blockchain technology that enables the creation of NFTs has been around for a long time, it is not well understood by the average person. The technology is complex, and this might put off anyone interested in learning about it. A simpler way to explain the subject and its many aspects is yet to be developed. However, the buzz around NFTs, and their association with things that people are familiar with, is raising the awareness of blockchain technology, thereby accelerating its adoption.

What Are NFTs?

An NFT is a unique digital asset representing ownership of a limited instance of a piece of content/item authenticated through blockchain technology. Think of NFTs as smart contracts. So far, most of the content linked to NFTs has been digital, with some of the most famous NFTs being digital artwork. However, NFTs are also offering unprecedented opportunities to businesses outside of the arts.

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(#What do you mean by NFTs?)

According to Devika Kornbacher, partner at V&E Technology Transactions and Intellectual Property,

“If you’re a business, you need to be thinking of ways to leverage NFTs. If business leaders think long and hard enough, they can probably identify a way to leverage NFTs to monetize content that they previously couldn’t monetize. And companies that don’t think this way are going to fall behind.”

We are already witnessing businesses such as the NBA monetize content through virtual trading cards that are sold as NFTs. Many basketball fans now own a couple of “packs'' of Top Shot Moments, with each pack featuring a set of NFTs. This was the NBA’s answer to traditional sports trading card packs.

Typically, the NFT “cards” represent a virtual cube with a player's picture and an exciting video clip from an NBA game. According to the NBA's Top Shot website, about half a million individuals own Top Shot Moments.

According to Kornbacher,

“The NBA is at the cutting edge. I probably wouldn’t purchase an NBA video clip that I saw on YouTube, but the packaging of this content, these NFTs, makes it attractive and makes it work. Even though it’s all electronic, it intentionally is giving you the feel of a physical, tangible item that you own.”

Interestingly, Top Shot NFTs share some similarities with traditional trading cards, such as scarcity which makes them more sought after. Scarcity is the key to selling NFTs successfully, according to experts. When demand meets scarcity, you are going to make money.

Other than the NBA, a few other notable corporations are utilizing NFTs and the power of blockchain to make extra money. A few examples include Taco Bell, which recently sold taco-themed GIFs as NFTs, and IBM, which made it public earlier this year that it planned to store patents as NFTs for easier trading and selling.

What to Pay Attention to Before Launching An NFT?

Businesses and individuals looking to explore the NFT world should pay attention to some things, such as choosing their marketplace wisely. A business can opt to set up its own marketplace like the NBA has done, or join up with existing marketplaces. The key is ensuring the marketplace is well-run and has secured the trust of buyers and sellers.

Also, even though the authentication of NFTs is automatic, it is not foolproof. Scammers, at times, can impersonate artists and upload their work to online marketplaces before selling it. To avoid dealing with a scammer, you have to spend time verifying that the properties of the NFT are listed, and that the seller is who they claim to be.