|Aliza Sherman is a web pioneer, author, and international speaker. Sherman is the author of 8 books about the Internet including The Everything Blogging Book, Streetwise Ecommerce, The Complete Idiot's Guide to Crowdsourcing and Social Media Engagement for Dummies.|
Understanding NFTs for Your Business
Have you heard talk about NFTs and are wondering what they are? What about the blockchain or cryptocurrency?
Keeping up with the latest developments in technology can be daunting when you’re trying to run and grow your business. Being aware of what’s new and that could impact your company - or your social media marketing efforts - is smart business.
Before exploring the latest "cool trend," remember your business goals and objectives and the audience you are trying to reach. Not all high-tech platforms and tools - like augmented reality, virtual reality, and virtual worlds - are suitable for all businesses or all customers.
What Are NFTs?
NFT stands for Non-Fungible Token. "Fungible" is defined as something that can be replaced or is interchangeable. "Non-fungible" means that something is unique and can’t be replaced by something else, no matter how similar. A token is defined as "a visible or tangible representation of a fact, quality, feeling, etc." Therefore, an NFT is a visible or tangible representation of something - in this case a digital representation of something - that is unique and cannot be replaced.
Here’s the tricky part about NFTs: they are digital, and any digital file can usually be copied or replicated in some way, whether by downloading it, duplicating it, scanning it, or taking a digital photo of it. What prevents an NFT - a digital file - from being copied?
NFTs, the Blockchain, and Cryptocurrency
NFTs are "minted" or placed on the blockchain. "Minting NFTs" is a method of publishing a digital token so it can be purchased, gifted, or otherwise obtained by others. The blockchain is a complex system that tracks and securely stores digital data in a distributed, decentralized manner. Translation: No single company in the world controls this digital data.
Think of how the Internet works and how the idea of the Internet was complicated and foreign to most people when it first became accessible to the public. The Internet consists of many computers or servers around the world that let people’s digital data bounce around from system to system to get to its destination or to provide access to a destination, like a website.
The blockchain works as a complex system of computer networks that store data, including digital currency known as cryptocurrency. Cryptocurrency - like Bitcoin, Ethereum, Dogecoin, and Tezos - is a digital currency that is verified and tracked via the blockchain. That means that the digital records for cryptocurrency are not maintained by any centralized authority, such as a bank.
How Can Your Business Use Cryptocurrency and NFTs?
To determine if you should incorporate NFTs into your marketing and social media marketing tactics, ask yourself these questions:
If you answered yes to the above, you may be ready to try minting NFTs. To do so, you still need to go through a number of steps to set your company up to be able to mint and perform transactions using NFTs and cryptocurrency. Without going into too much detail here, these might be the next technical steps you’d take:
Once your NFTs are on the blockchain, they can be bought, sold, exchanged, and otherwise transacted. No matter where they go on the blockchain, and no matter who owns it, you will always be listed as the originator and could even receive royalties in perpetuity each time your NFT is resold. How does that happen?
Any NFT on the blockchain is forever trackable and traceable back to its origin and its original creator. If you are creating digital art or non-digital art that you digitize, minting those files as NFTs offers you the ability to track where it goes once someone purchases or obtains it from you, even if they gift or resell it or it continues to be resold for years to come.
How Can a Business Use NFTs?
Many companies are already exploring NFTs in a variety of ways. Here are some examples that might spark some ideas for your own business:
Here’s a breakdown of some of the most basic ways NFTs can be integrated into your digital and social media marketing:
When you incorporate NFTs into your marketing mix, use social media to announce and promote your NFT initiatives. Link to your NFT gallery or to your website where you can explain the promotion and how customers can engage with you and obtain your NFTs. Adding an NFT visual element to a social media marketing or advertising campaign could appeal to, and attract, a tech-savvy customer.
As with any new technology, don’t spend a lot of time and resources on trying the "next big thing" until you’ve done careful research and considered the pros and cons of adopting something cutting-edge and speculative. But if you’re ready to experiment and be creative, NFTs might be worth exploring.
Read other social media blogs by Aliza Sherman