Have you ever bought an NFT, if you have, do you know how fascinating they can be? From a user's perspective, that fascination is understandable but why are the tech giants favoring NFTs so much? To know about that, you have to go through this blog.
Digital technologies or future technologies like cryptocurrency, blockchain, and NFTs have become an essential part of our world now. Many consider these as future technologies while some consider them scams but regardless of the judgment, they are highly favored by the big tech giants right now like Instagram, Samsung, Nike, Revolt, and Adidas.
What are NFTs?
NFT stands for Non-Fungible Token which is a file composed of data and a unique signature. It is non-fungible which means it can’t be divided or shared among people like cryptocurrency, this has to be whole. AN NFT can be anything like an image file, a song, a tweet, a text posted on a website, a physical item, and various other digital formats.
FUN FACT: - The costliest NFT list of the top three
- Pak's The Merge - Worth $91.8 Million It was created by Pak and was bought on 2 December 2021 with 30,000 collectors.
- Everydays - The First 5000 Days - Worth $69.3 Million
- Clock - Worth $52.7 Million
Differences between Collective Cards and NFTs?
Some people compare the NFTs with Collective cards and that can be true to some specifications, let’s compare their features: -
Why NFTs are in demand?
The first ever NFT Etheria was launched in October 2015 and right now there are more than 360,000 NFT owners holding around $2.7 million in NFTs (According to the Financial Times and Chainalysis). But why there’s so much demand for NFTs? There are various reasons for that but the very basic answer is that it is a trend these days. People initially started showing interest in cryptocurrency which became a trend and when NFT got introduced the same happened. High-profile people, celebrities, and Influencers played a big role in that as they bought some really costly things and people followed that. By the end of 2021 around $41 Billion were spent on buying the NFTs.
Main reasons for favoring NFTs by users
- Proof Of Ownership: - NFTs data is purely stored on the blockchain where people can see the whole ownership data. Unlike cryptocurrency, the NFTs can only be bought in a single piece, they can’t be divided into smaller parts or distributed among multiple people. There can be only one owner and which makes the NFTs even more unique.
- Proof Of Originality: - As these are digital things it is made of data and metadata which are stored on the blockchain, so these can’t be duplicated, replicated, or replaced.
- Transferability: - These are easily transferred from one owner to another.
Why are the tech giants favoring NFTs?
Crypto adoption isn’t seen that much among companies but that’s not the case for NFTs. Brands are showing a huge interest in NFT as we saw so many brands this year only. The NFTs can be used to reward and motivate customers with creative presents, privileged access, and other things.
Attorney Tal Lifshitz, a partner, and co-chair of the cryptocurrency, digital asset, and blockchain group at Miami-based Kozyak Tropin & Throckmorton (KTT) talked about the brands favoring where he said: -
“It’s trendy, it’s fun, and it’s cutting-edge technology that actually has the potential to redefine the way these brands do business and engage with their consumers.”
Redpoint Ventures investor Lydia Hylton also talked on the topic that NFTs offer a new revenue stream and a tool for brand engagement because corporations are ultimately motivated by the promise of profits.
"Exclusive brands like Louis Vuitton thrive on scarcity and are exploring LV-branded NFTs for the metaverse. Brands are also constantly looking for ways to increase engagement with customers.”
According to Dr. Dustin York, an associate professor of communication at Maryville University, companies are hopping on board because individuals are spending more time in virtual environments.
He further added
"When customers gravitated toward malls, brands followed. When customers gravitated toward e-commerce, brands followed, And when customers are now gravitating toward Web 3.0, digitally native brands are following, giving even more legitimacy to NFTs.”
NFTs are a good option to attract more customers and prove the diversity of these companies. NFTs, cryptocurrency, and blockchain are considered the future technologies and that’s why brands need to be a part of that. Even now so many brands and tech industries have gotten involved in NFTs but with time we will get to see much more.
NFTs have already made their place in the user's heart but now the tech giants favoring NFTs over cryptocurrency. In this year only we got to see so many companies, and brands getting involved with NFTs. With this, we can expect much better collaborations of tech companies with NFTs.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. All content provided is for informational purposes only, and shall not be relied upon as financial/investment advice. Opinions shared, if any, are only shared for information and education purposes. Although the best efforts have been made to ensure all information is accurate and up to date. Occasionally unintended errors or misprints may occur. We recommend you to please do your own research or consult an expert before making any investment decision. You may write to us at [email protected].