NFTs will bridge the gap between the real world and the metaverse
The first currency dates back to 3000 BC. when the world’s earliest civilization developed in Mesopotamia. The shop, on the other hand, appeared further down in ancient Greece, where merchants sold goods in the center of the Agora. Thousands of years later, in 2009, the market for digital assets emerged. As these digital assets became widespread, so did fraud. In 2014, NFTs (non-fungible tokens) were introduced. These digital identifiers made the buying, selling and trading of digital assets efficient and reduced the possibility of illegal activity.
What is an NFT? Simply put, “NFTs are baseball trading cards, or collectible stamps, in digital forms,” Steve Sarner writes in his book Web3 simplified. The artwork is original and the owner is verified on the blockchain.
Today, NFTs are reportedly on the decline – well, their value is. And some major publishers are closing up shop on their NFT marketplaces. What was once seen as a budding opportunity is now being positioned as a bad investment. But why? NFTs will bridge the gap between the real world and the metaverse.
Re-introducing NFTs for retail
Selling digital products to consumers is not new. Advertisers have been buying digital products from Facebook and Google for years. Consumers buy digital services from Netflix. But the difference between a digital product and an NFT is critical to the retail experience. When a consumer rents a movie, it is the same movie that all other consumers can rent. On the other hand, when a consumer buys an NFT, it is unique and has only one owner.
Due to the global financial crisis, advances in blockchain technology as well as the proliferation of available digital assets created momentum for NFTs. However, an inflated market and an insatiable demand for NFT collectibles created too much hype. The NFT bubble then begins to burst, providing an opportunity for brands to step in and offer value to consumers.
Regardless of the recent millions lost by collectors, retail brands from Gucci to Walmart are applying for NFT-related trademarks. More than 5,000 trademark applications were filed in 2022, which is more than double the previous year. Following this trend, a number of prominent brands also expanded their trademark portfolio to protect their digital assets.
Regulatory challenges for NFTs
Currently, NFTs are not subject to regulation. There is no legal protection for anyone buying, selling or investing in them. In the US, the Securities and Exchange Commission (SEC) regards NFTs as a security. Regulators have also become confused in distinguishing between NFTs, stablecoins and cryptocurrencies.
Recently, the high price of NFTs has piqued the interest of regulators. The folks at Yuba Labs, best known for Bored Ape Yacht Club NFT, are facing an SEC investigation over unregistered offerings. The investigation isn’t necessarily ugly, but a way for policymakers and regulators to “learn more about the new world of Web3,” Bloomberg reported.
Earlier this year, the Treasury Department’s Financial Crimes Enforcement Network (FINCEN) entered the discussion after witnessing the $69 million sale of Beeple’s. Weekdays: The first 5,000 days NFT at a Christie’s auction. FINCEN’s report ultimately determined reason to doubt any regulatory action for NFTs, or any cryptocurrency, and concluded that no regulatory action was a priority for the agency at this time.
More than a digital resource
NFTs are most often referred to as digital art objects. Opportunities exist outside the digital wall. By structuring data through NFTs, digital assets are linked with real objects. Real estate, cars, branded shoes or even gift cards purchased in the “real world” can receive a virtual item to authenticate the purchase and mark the rightful owner of the original product. For example, Nike applied for a patent to make the authenticity of sneakers traceable with a NFT system.
The automotive industry – comprised of those who sell auto parts and accessories – will become more customer-centric and create a less painful retail experience with NFTs. If car owner and mechanic share NFTs after service. both parties will keep a record forever. NFT will state who owned the car, for what period, and in detail the condition of the car. Governing bodies will have access for any context and keep records indefinitely.
Another idea for retail includes inviting key customers to receive digital NFT innovations that allow them to access specific spaces in a metaverse with special features. The “invitation only” exclusivity connects like-minded customers who can network. This approach will improve customer loyalty and retention.
The possibilities for NFTs are endless. Much more than digital art, NFTs can be used to enhance and stimulate retail environments. In addition, the technology can be used to reduce fraud. Companies should consult with General Counsel and outside trademark attorneys for guidance on understanding the emerging digital space.
Casey Jensen is VP of US Sales and Marketing at rooom.com. He has spent the last 15 years in sales and management for some of the most innovative technology companies in the world, including Google, helping those companies secure and manage clients including Hilton, American Airlines, Dell, HP, Neiman Marcus, Michael Kors, Gucci, Apple, Paramount, Hotels.com, Travelocity and Adidas. From launching new markets for existing and new products to building sales and operations teams, Jensen helps companies find and exploit markets for their products and services quickly and efficiently.
