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How NFTs Can Transform Customer Loyalty
NFTs are experiencing a big-bang moment. Collectors and investors have spent more than $275 million on NFTs in the past month alone, compared with $250 million throughout all of 2020 (Source: NonFungible.com). Today NTFs are being used to commodify digital assets, but they also open numerous possibilities for brands to transform customer loyalty.
What are NFTs?
NFTs stand for non-fungible tokens. This phrase likely does not make the definition any clearer. According to Forbes:
An NFT is a digital asset that represents real-world objects like art, music, in-game items, and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded in blockchain technology as many cryptos. (Source: Forbes).
In economics, a fungible asset has to do with units that can be readily interchanged like money for example. With money, you can swap a £20 note for two £10 notes, and it will have the same value. However, if something is non-fungible, this is impossible. The asset has unique properties so it cannot be interchanged with something else (Source: BBC). It could be a house, a real-life painting, or one copy of many, like trading cards. The blockchain keeps track of who has ownership of the asset.
