BENCHMARK YOUR COSTS
Jun 7, 2021 Florent Hainaut #IT

What are NFTs and how could they be used by companies in marketing?

NFTs or non-fungible tokens are cryptographic tokens that can be used for many things. Most of the time the craze behind these tokens is digital art and collectibles. 

An NFT card is represented by a digital object and its existence is assured by the blockchain and its unique code. You could say that people have understood that the digital object can have significant value. A space has recently developed in digital art, video games and sports.

How do NFTs work?

NFTs depend on the platform where they are created. One of the blockchains with the largest number of crypto-artists is Ethereum.

It should be noted that anyone can create, buy or sell them on the various markets. An NFT is a bit like a trading card that is unique. Its owner can sell or trade it whenever he wants.

NFTs can be bought and sold on specialised marketplaces, such as Opensea or Rarible. All transactions are carried out in cryptocurrencies. (Ethereum & USDT)

How can companies use NFTs?

Big brands like Pizza Hut and Taco Bell have recently developed an NFT version of their product. Pizza Hut has decided to auction pixelated pizza slices every week. This may come as a surprise to some, but the first slice sold by Pizza Hut sold for over $8,500.

Taco Bell, which has undertaken more or less the same initiative, sold its first 5 virtual tacos for just under $2 and offered a $500 voucher to the owners of those tacos.

Companies that want to take on NFTs must remember that they are primarily targeting enthusiasts.

TO SEE: Artificial intelligence: is it riskier to be a lawyer or a plumber?

What can we expect in the future?

These tokens also open the way to a new business. One can imagine clothes or shoes with NFTs. This could serve as a certificate of authenticity and at the same time delight collectors.  

NFTs can also be used to value in a new way the possession of an item or product but also the fact of having participated in an event such as a concert or a festival. For the moment, NFTs are mainly used in video games.  

TO READ: Voice search: gadget or revolution? 

Don't underestimate the environmental consequences!  

Since NFTs mainly use the Ethereum network, a first-generation blockchain that works by mining. It requires a large computing capacity and is very energy intensive. The electricity consumption is equivalent to that of a country like Argentina every year. This is why a new blockchain has recently attracted a lot of interest, namely Ethereum 2.0, which uses a different validation method that is faster and consumes less energy.