When I bring up NFTs around my Gen Z teenagers, they start coughing. Excessive, wheezing cough, as if they had just stuck their head in a coal plant.
It’s snarky teenage shorthand for intense hatred for non-fungible tokens. They’ve been taught in school—and reinforced in copious online hangouts with friends—that NFTs cause pollution and accelerate climate change.
Gen Zers are not alone in their animosity towards NFTs. A survey of 2,000 consumers by CX provider Tidio revealed that 60% of people, regardless of age, believe NFTs are a scam, with 82% of Gen Zers feeling this way. Mixing up this research with informal chats with attendees at last week’s HubSpot Inbound, it’s safe to say that millennials pretty much agree with Gen Z. Gen Xers and baby boomers don’t really see the value in digital goods in the first place, let alone get into the political consequences.
If you’re looking for more evidence that people are recoiling at the thought of NFTs, look no further than Salesforce: Earlier this year, more than 400 employees protested the release of the company’s NFT Cloud.
So why would tech vendors go all-in on NFTs, like Salesforce or NFT.Kred, a company that evangelizes NFTs as a legitimate marketing tool for SMBs and bought a booth at Inbound? Because they believe that there are business drivers behind NFTs that have nothing to do with collectibles, auctions or cryptocurrencies.
These forward-thinking companies believe that NFTs will eventually be used as a single source of truth for a customer’s data, supported by new, green blockchains. This logic was somewhat validated on Monday, when Starbucks launched Odyssey, an NFT addition to the Starbucks Rewards customer loyalty program. Luxury leather brand Coach has also experimented with selling limited edition NFTs to its customers, in addition to handing them out to its Insider Club members. The Gap has done it too.
Noah Eisenbruch, chief product officer at NFT.Kred — which produces the NFT.NYC conference — at HubSpot’s Inbound 2022 conference last week. He says NFTs have utility far beyond the speculative secondary collector market.
Think of it this way, NFTs can power all kinds of everyday things, such as next-generation customer loyalty programs, event tickets, health club memberships and even real estate, these optimists believe. Such NFTs will be distributed free of charge or as part of a service package. On the blockchain, it is more difficult to forge documents.
Some companies, including SAP and technology consultancy PwC, have also experimented with NFTs to gamify digital certifications or awards that employees can earn for training, said Noah Eisenbruch, chief product officer at NFT.Kred. People who attend NFT.Kred’s corporate events gain entry with – you guessed it – an NFT. The company’s pitch to Inbound was that NFTs can be used to build customer communities and empower them to become brand ambassadors.
“We’re not really in the digital collectible NFT game,” Eisenbruch said. “We’re in the utility game.”
Last year’s model
If it were still 2021, the haters would be correct – and utterly righteous – in their disparagement of NFTs. NFT followers are lumped in with misogynistic crypto bros, who together make up what has been called “the internet’s most annoying archetype.”
It’s also hard for the average person to relate to the secondary auction market for NFT collectibles and artwork, where people speculatively bid eye-watering sums for what is essentially an arrangement of pixels parked on a blockchain.
American artist Beeple saw a work sell for $69 million. Noah Davis, who brokered that sale, went to work for Yuga Labs, an NFT developer that runs Bored Ape Yacht Club and CryptoPunks. Davis is linked to a majority of the 10 most expensive NFT sales.
With that in mind, we can forgive boomers, Gen Xers, millennials and Gen Zers for coughing at the mention of NFTs. This is not our stage. Too much money spent on non-commodities whose value is artificially inflated by internet hype generated by NFT brand managers like Davis. And environmental considerations are no joke. Once on the Ethereum blockchain, NFTs’ environmental impact is indisputably toxic. In fact, the two largest blockchains would rank 27th in energy consumption combined if they were a nation – more than countries like Norway, Egypt and Sweden.
However, that perspective is that of last year.
Marketers: Rethink your attitude
The main reason why NFT technology has a chance to reform its reputation is the emergence of environmentally friendly blockchains that use very little energy. Solana is a popular one; Starbucks Odyssey is built on another, Polygon.
However, marketers don’t change overnight. NFT supporters face a steep uphill battle against collective, generational distaste for the technology. We can probably all agree that the revulsion is somewhat justified, considering that the original NFTs were on the energy-guzzling Ethereum blockchain. One artist among a particularly vocal group on Twitter once characterized NFTs on Ethereum as “an ecological nightmare pyramid scheme.” Add in the whole crypto bridge guilt-by-association thing, and people are understandably down on NFTs.
Anything that can be tokenized as an NFT should be.
Noah EisenbruchProduct manager, NFT.Kred
Even putting all that aside and taking into account newer, greener blockchains, there just isn’t much mainstream interest in NFTs, judging from conversations with marketers, analysts, and even the typically bubbly HubSpot management team at Inbound conference.
But that’s not going to stop Eisenbruch and his fellow NFT champions from evangelizing what could be the next wave of customer loyalty platforms—if it hasn’t already. NFTs used for exclusive club memberships or rewards accounts give consumers control over their stuff, he said. They help consumers protect their investments by giving them the ability to resell items they no longer want.
“We’re going to use NFTs more in our daily lives,” Eisenbruch said. “Smartphones became a tool very quickly and now it’s a tool that none of us can live without. I think the same is going to happen with NFTs because of their programmable and decentralized nature. That’s why I believe in everything which can be tokenized as an NFT should be.”
Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service and enabling technologies for TechTarget.
