NFTs: A DEVIANT Trend
Whether it's artwork, sports memorabilia, or even music, there’s a new way for collectors to get their hands on one of a kind items. The only difference is these only exist digitally. NFTs, or a Non-Fungible Token, have quickly become a game changer in more ways than one. They’ve changed the way collectibles are defined, how they’re valued, and especially how they’re sold.
What exactly are NFTs?
Simply put, a non-fungible token is a one-of-a-kind asset that lives online and is managed in a digital ledger. An NFT is created, or “minted” from digital objects that represent both tangible and intangible items, including:
Art
GIFs
Videos and sports highlights
Virtual avatars and video game skins
Designer sneakers
Music
Essentially, NFTs are like physical collector’s items, only digital. So instead of getting an actual oil painting to hang on the wall, the buyer gets a digital file instead.
But the main draw from a creative’s perspective is essential in understanding what has fueled NFT’s popularity over the last year: The fact the buyer also gets exclusive ownership rights. In an age of streaming services short changing their artist’s royalties and original artworks constantly being used without permission, this differentiation made the evolving platform more appealing than ever before to those in the creative field. Additionally, The artist can sell it directly to the consumer as an NFT, which also lets them keep more of the profits. In addition, artists can program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner. This is an attractive feature as artists generally do not receive future proceeds after their art is first sold.
What’s made NFTs so popular with the public that’s buying them at such a surprising rate? Some say it's the exclusivity of it all, one of a kind means just that, if you’re the lucky owner of one of these pieces, nobody else has it but you. There’s also the investment angle: Purchase something now and wait for it to increase in value. Then there’s also those who just want to be in on the fun, a mindset many have said has contributed to the overall growth of cryptocurrency in the last two years.
But is it a fad?
The Guardian says the latest craze is fueled by spectators, not enthusiasts. This is the crowd that never sticks around for long. And then there’s the investors, as they put it ‘“There is, though, one big difference between the NFT collectible craze and collectible crazes of the past, which is that, from the start, the NFT collecting frenzy has been largely about money, and the prospect of getting rich.”
Another major factor that may impact NFT’s longevity is their environmental impact. To create such a strong digital asset with a proof of work, artists have been using more energy than ever before. The New York Times recently quoted a French artist taken aback to learn that their “release of six crypto-artworks consumed in 10 seconds more electricity than [their] entire studio over the past two years.”
Naturally, as with any major fad, brands and agencies alike have taken notice. There’s already been dozens of shared creative uses of NFTs from almost every consumer facing industry. But here are a few of our favorites:
Taco Bell’s creative GIFs were sold as NFTs, selling out in just 30 minutes (true to the brand’s tonality, this was done mostly tongue in cheek, embracing the trend, all while supporting a charity)
Kings of Leon launched their latest album in various forms of NFTs to their biggest, and highest bidding fans. Each variation had a different album experience, coming with all sorts of exclusive features.
Not to be outdone, Pringles released 50 “digital flavors” (exclusive digital artworks) sold as NFTs, with a starting asking price of $600.
Twitter Founder Jack Dorsey sold the first ever tweet as a NFT that went for just under $3 million.
In short, the rise of NFT’s, especially the branded ones, are here to stay.
Their longevity, and organic success is something we can all learn from, and can be attributed to two key factors:
NFTs lead to an unique, brand driven experience like no other. The NFT itself, the purchasing method, all the way down to the launch announcement is completely self driven by the brand, in direct correspondence with their audience. No middlemen, no outside merchandiser, and no room for any confusion: This is an opportunity to own a unique piece of history.
This unique piece of history is an investment. It's one of a kind, and will be a testament to brand loyalty and advocacy for years to come.