Have you been wondering WTF an NFT is or how your company can make money from it?
Below I'll explain the basics of NFTs, but the key point is that NFTs allow for ownership of and profit from digital assets, which is why we should all be interested.
Before NFTs, the internet allowed for the rapid spread of content but generally people didn't know who originally created it. NFTs allow for digital assets to circulate widely and gain popularity while retaining information about the original creator, which means that the company or person that created it can ultimately profit from it.
And there's a range benefits for companies creating NFTs, such as reaching a younger audience, diversifying revenue streams, improving brand relevance, creating innovative campaigns and collaborations, and generating earned media and social media engagement ... but ultimately it's all about the Benjamins (or Ethereum in the case of most NFTs).
WHAT IS AN NFT?
NFT stands for non-fungible token. Money and bitcoin are fungible because they can be exchanged for one another, but NFTs are 'non-fungible' because they are one-of-a-kind. Each NFT has an individual digital signature and cryptographic algorithm that makes it unique, which is how we can verify ownership of NFTs.
According to Shanti Escalante-de Mattei, an NFT "is a unique unit of data employing technology that allows digital content—from videos to songs to images—to become logged and authenticated on cryptocurrency blockchains, primarily Ethereum. Once content is logged onto the blockchain, every transaction from transfers to sales is recorded on-chain, creating an easily accessible ledger of provenance and price history.
The main impact of NFTs is making it easy to own and sell digital content. Previously, for example, digital artists could build up large followings on social media, attract freelance commercial work, and maybe sell prints and other merch with their designs, but they had trouble monetizing digital art directly, as consumers asked, Why should I buy what I can screenshot for free?"
This is, of course, still a valid question and debate... But in 2021 NFTs generated $40B USD, compared to about $90M USD in 2020.
And NFTs are not just digital content, as they can be linked to physical, real world assets as well (examples below).
WHAT ARE SOME EXAMPLES OF SUCCESSFUL NFTs?
Below are some examples of successful NFTs to help you better imagine what your company could do in the NFT space:
- Beeple’s “Everydays: The First 5000 Days”
Beeple’s purely NFT digital artwork was the first NFT to be sold at a major auction house. Christie’s auctioned off this asset for an eye-popping $69 million.
- William Shatner’s Memorabilia
Actor William Shatner released a collection of NFTs of personal memorabilia from his 60-year career. He sold 125,000 units in 9 minutes, including some of his early headshots, a photo of Shatner hugging Star Trek co-star Leonard Nimoy, and an X-ray of Shatner’s teeth.
- Grimes WarNymph
Singer-songwriter Grimes made $5.8 million selling a collection of 10 NFTs. The highest-selling asset was a one-a-kind video called “Death of the Old” that sold for $389,000.
- Nyan Cat
A crypto art rendition of the beloved GIF Nyan Cat meme sold for $590,000 in an online auction, in a first foray into NFTs for creator Chris Torres.
"I'm very surprised with the success, but I think I'm most glad knowing that I've basically opened the door to a whole new meme economy in the crypto world," Torres said.
- Glenfiddich Whisky
Distillers William Grant and Son recently sold 15 bottles of 46-year-old Glenfiddich whisky for $18,000 a piece, and each one was accompanied by its own NFT artistic impression of the bottle. The NFT allows the owner to show off their purchase and acts as a counterfeit-proof certificate of ownership.
- Jack Dorsey’s first Tweet
Twitter CEO Jack Dorsey sold his very first Tweet, from way back on Twitter’s launch day in March 2006. The NFT of the tweet sold for nearly $3 million. Dorsey says the money would be converted to bitcoin, then donated to a charity organization called GiveDirectly.
- Furniture NFTs
Argentinian designer Andrés Reisinger sells furniture NFTs that people can use in open worlds like Decentraland or Minecraft. Reisinger’s most expensive piece sold for a little under $70,000.
5 of the digital designs that Reisinger created will be turned into real, physical objects and will be sent to the buyers of the NFTs.
- NBA Shots Sports Collectibles
Top Shot is an NFT marketplace for buying, selling, and trading videos of NBA moments – their slogan is “Own the NBA’s Best Plays.” LeBron James dunking against the Houston Rockets is currently their highest-earning asset, selling for $387,000.
- RTFKT’s Digital Sneakers
Virtual sneakers from RTFKT, made for players’ online gaming avatars, are selling for up to $10,000 a pair. In March 2021, RTFKT collected $3.1 million in just a few minutes by selling a series of sneakers he co-created with another artist named Fewocious.
- Taco Bell GIFs
Fast food giant Taco Bell commissioned a series of GIFs based on dishes from their menu, then sold them online as NFTs. The tokens sold out within minutes of the launch, and Taco Bell donated all the proceeds from the sales to the Taco Bell Foundation, the company’s charity organization.
Read this article for additional examples on NFTs from Coca-Cola, Gucci, Charmin, Campbell's Soup, State Farm, L'oreal, Under Armour, Mattel, and more!
And if you'd like to read the original article of the examples above, you can find it here.
WHAT ARE SOME CATEGORIES THAT WORK WELL WITH NFTs?
• 3D Assets
• Videos and Sports Highlights
• Virtual Avatars and Video Game Skins
• Sneakers and Handbags
WHO CAN MAKE AN NFT?
• Digital Content Creators
• Physical Product Creators
• Intellectual Property Owners
HOW DO YOU SELL AN NFT?
First, you'll need to design/create your digital asset (it could be original or a piece of existing IP), or create a digital asset for a physical product if you want to turn something real into an NFT.
Then, you'll need to choose which platform you want to sell on (OpenSea.io, Rarible, and Foundation are some of the most popular platforms). There are pros and cons to each platform that exists, so make sure to DYOR (do your own research). There are also platforms that are more suitable for different verticals, and no clear winners at this point for most industries... But here's a decent guide to some of the biggest marketplaces.
To "mint" your NFT, simply follow the instructions of the platform that you want to list your NFT on... Just make sure you are the actual owner of the file/asset.
You'll also need to have a wallet set up so that you can receive the cryptocurrency that powers the platform (make sure you DYOR on what kind of cryptocurrency you would want to receive...)
Then you can list your NFT for sale, either for a fixed price or at auction. If you're auctioning your NFT, then make sure you manage your listing.