WTF is an NFT
From the barter economy in 6000 BC to cryptocurrency in the early 21st century, the evolution of money exchange has remained extremely relevant in everyday transactions. The original concept of money stems from trading commodities in order to survive and earn public respect in our society. When trading, transactions needed to be executed immediately and with the exact payment ready to be spent. There were no such things as IOUs or offering excess payment to receive change, and it wasn’t for many years that these sorts of restrictions were lifted. Additionally, one only knew about goods and services through word of mouth. There was no such thing as global marketing or widespread communication; however, the need to spread word of sales was growing.
Through the rise of the Renaissance and Enlightenment periods in 16th century Europe, numerous types of coins were produced and standardized, such as silver and gold, and the diversity proved to be confusing for common folk. Thus sparked the rise of banks, cash incentives, and a more uniform concept for transactions. As we continue our way throughout history, the Industrial Revolution changed the way supply and demand worked in terms of consumer goods and mass marketing.
Marketing has always been around, from the stone ages to the present day, its form evolving and changing over time. From word-of-mouth marketing and telegrams to mass TV advertising and radio, goods and services have been made relevant and accessible to those around them due to the work of marketers. With an almost overwhelming abundance of technology at our fingertips and new savvy innovations being created daily, there are still many individuals longing for old forms of marketing that stem from person-to-person communication. Technology has its benefits, sure, by making transactions so seamless that the end user rarely has to lift a finger, but it eliminates the desire to purchase something due to their connection and attachment towards the good or service.
Non-fungible tokens, or NFTs, have worked their way into our digital, creator-centric economy, allowing for individuals to showcase their imaginative, artistic side for a profit. An NFT is a digital asset that represents real-world objects, primarily in the art world, that are frequently bought and sold online. They can be compared to physical collector’s items like a piece of art hanging in a museum, yet they are digital, and the received purchase is an online file.
When I first heard about NFTs, I thought the word “fungible” was made-up, and while it essentially is, it describes exactly what the tokens are about. Non-fungible means that something is unique, like the word itself, and can rarely be replaced by something else. So, how are NFTs different from Bitcoin and cryptocurrency? Bitcoin, unlike NFTs can be easily traded for another Bitcoin, making it fungible like traditional money is. Additionally, one Bitcoin has the same value as another Bitcoin (should the units remain the same), while NFTs have personalized digital signatures allowing them to have a unique, individualized value. NFTs operate under a greater umbrella of cryptocurrency. They reside on the blockchain, which is a digital ledger that offers secured transactions.
Our current society enjoys visuals in any aspect of the market. While we all spent the majority of our time within the four walls of our homes throughout the pandemic, the sheer amount of minutes spent using screens, for both professional and personal use, has accumulated. Conversation-starters were likely centered around the latest TV show or movie released, what dancing trend was growing on TikTok, or who was the most recent feature on the podcast we obsessed over. So, as we grow more and more to become visual learners, especially in school settings where professors must keep students engaged over Zoom, NFTs found their place in the market. NFTs can be anything digital, from drawings and music to physically downloading your brain’s neural pathways and structure and turning it into artificial intelligence.
Now, I step back and take a greater view of the art world to notice its progression in a similar way as I did with money exchanges. Monet, Picasso, Van Gogh are all noted artists in history, not because they posted their artwork on social media for all to see, but because of the uniqueness of their strokes on a canvas and how irreplaceable their works were and still are. Artists today recognize the lack of greatness being expressed in a traditional way, such as paint on a canvas or pencil to paper, yet still yearn to gain esteem through their work. The traditional form of art has gone by the wayside as each generation seeks to innovate the art space and produce art digitally, which they continue to see the monetary benefit they receive from doing so.
Where my confusion lies, is in why someone would buy a piece of digital art for it not to be displayed anywhere. I chose to write about NFTs because I do not fully understand them. While that may put me in an inferior position to write an article about them, I find it offers a unique perspective, something that is non-fungible for someone else to write. In my opinion, the type of people purchasing NFTs are those who have excess money to spend, have an elitist view on the block-chain and NFT industry, and want to publicly showcase their acceptance into an exclusive group through possession of a rare token. One reason I believe NFTs are extremely useful in today’s society is the effect they have on social media and digital marketing. These pieces are digital assets and change the way data analytics can be retrieved and stored. Millennials and Gen Zers are more familiar with and more likely to invest in NFTs as well as become collectors of them, due to their frequent use of social media and other advancing technologies.
Companies and large brands are noticing the trend and attraction toward NFTs and other collectible items and are starting to introduce them as part of their offering. By doing so, they are increasing their brand awareness and likability for younger generations to be drawn in by their company’s appeal. Further, a unique opportunity and competitive advantage that companies using NFTs can have is through mobile advertising campaigns that promote their products to a wider audience and grant the ability to create personalized gifts for their customers. This general shift towards cultivating the optimal experience for customers creates a return effect and spreads that message to others.
So, why should anyone really care about NFTs if they aren’t collecting or creating any? NFTs provide insight into the direction that marketing and e-commerce is moving towards. Marketers are using them to collect data about the consumer behavior and purchase intent to help personalize their purchasing decisions and experience. The proceeds from purchasing an NFT are being donated to charity by large corporations as well as charitable individuals to show their customers and fan-base alike how purpose-driven they are, creating a domino effect for other brands to follow suit. In addition, the generations growing up now are becoming more and more tech-savvy and already familiarizing themselves with advancing technologies at a young age. When they become entrepreneurs and leaders of the world, they will have all of the knowledge that the current workforce does and more, allowing them to succeed and innovate. By creating a space that is more creator-focused and allowing brands to monetize digital media points, the attraction of NFTs and other cryptocurrency and block-chain functions are on the rise and will only prove to be a successful and necessary investment in the future.
