How NFTs Will Change Enterprise Space; Use Cases and Opportunities
Corporations can determine whether they should participate in NFT (Non Fungible Token) investment by focusing on explicit use cases and their market positioning and their business strategy. NFTs will be the future of everything and moving beyond just flex for collectors.
Before talking about NFTs, let’s discuss Blockchain and it’s positioning in business strategy.
Blockchain strategy should be integrated into business strategy and not just as a piece of cool technology.
Assumptions on the value of Blockchain seem to be clear, with Bitcoin, the first application of Blockchain; making headlines for its rocketing price and volatility and making some people very famous and rich and many others broke.
With its market value from less than $20 billion to more than $200 billion over the course of last few years.
Yet Bitcoin is only the first application of Blockchain technology that has captured the attention of government and industry.
In addition to this hype on Crypto-Currency, the investment and growth of Blockchain-based startups have been very fast as well. It is important to know that Venture Capital Investment in Blockchain Startups is up 280% so far.
As the crypto industry sees a decline in initial coin offerings (ICOs) amid regulatory concerns and major losses across token markets, traditional VC investment is once more on the rise.
Internet of Things (IoT) is becoming an important factor in Blockchain-based projects and unlock unique use cases that can lead to innovative ideas and platforms.
To make things very clear, we need to know that Blockchain technology and the market is still in infancy and still at the beginning of the path.
It is still very hard to showcase the Return of Investment (ROI) for Blockchain initiatives compare to traditional solutions in the marketplace and indeed, the way that startups trying to de-risk the Blockchain initiatives still not very strong.
Given these facts, the dominant Blockchain conversation is more around following value propositions: — Reducing cost — Transform business model — Scale — Transparency and trust — Distributed vs. centralized The dominant factor here is how fast organizations can harness the power of the unique value proposition of Blockchain and how fast they can move forward with the digital transformation.
Now let’s go back to the basics and see what is the Blockchain.
What is Blockchain?
Blockchain is a distributed ledger, or database, shared across a public or private computing network or networks.
Each computer node in the network holds a copy of the ledger, so there is no single point of failure.
This will provide a distributed way of representing information to the network. Every piece of information is mathematically encrypted and added as a new “block” to the chain of historical records. There is a cost to add a new block to the Blockchain, so it will be costly and time-consuming to add new blocks.
So, if somebody wants to add a fake block, it will take a huge amount of time to do such a task which makes it very very hard.
Various consensus protocols are used to validate a new block with other participants before it can be added to the chain. This prevents fraud or double spending without requiring a central authority.
In addition, what makes Blockchain unique, is the concept of “Smart Contract”. A smart Contract is a set of conditions recorded on the Blockchain so that transactions automatically trigger when the conditions are met.
For example, smart contracts could be used to automate insurance-claim payouts, or automation of triggering complicated legal contracts between organizations when triggers happen (e.g. when a sales contract has been signed). Now that we know the basics, we can get to the value that Blockchain can offer to the organization.
Operational efficiency will be one of the main ways organizations can harness the power of Blockchain by changing the way businesses think about record keeping, automation of smart contract, This can be the foundation of Blockchain adoption and a strong driver for moving towards this concept. Plus, by revealing lost revenues Blockchain can be positioned not only as a cost reduction solution but as a more strategic business tool to impact the recognized revenue for organizations.
Transform business model
Blockchain can change the way businesses are dealing with their customers and suppliers. Moving towards customer experience or offering the best products ever, Blockchain can provide values and use cases that it was impossible to even think about them before.
Blockchain without scale will be no more than a pilot project and highly unlikely can impact the business. The scale depends on several factors such as technology platforms, standards, and ecosystems. Depending on the industry each of these factors can play a more important role in offering scale to the organization.
Transparency and trust
Blockchain by design is set up based on transparent transactions and the fact that all the participants can see all the transactions will position the organization in a place that they can gain the trust of their customers and partners.
Distributed vs. centralized
Being a centralized authority and having full control over the transactions, vs. a distributed system that provides the highest level of resiliency both at technology and business. We are living in an era that business continuity is a core strategy for organizations and Blockchain will be a great addition and enabler for this task.
Evaluating these aspects about the scale of impact and speed to market will reveal the correct strategic approach on where and how to compete to enable companies to start extracting value in the short term.
Now that we cover the basics, let’s discuss rise of NFTs and see what exactly is going on.
Rise of NFTs
NFT (Non-Fungible Token) is one of the blockchain use cases in which as an artist, you can sign a digital copy of your product (music, movie, photo, painting or any other digital assets) and directly distribute that to your buyers.
No need for agents and 3rd party companies anymore.
Now artists and digital producers and creators can offer their products directly to consumers and collectors.
Imaging the transformation right here.
If you are a music creator, traditionally in the old regime you had to sell your music to agents first. Then convince them to distribute your music to their target audience and if you are good, they take a big cut of your check as well.
Not any more!
Now digital producers can produce their music and offer that as a NFT to the consumers with a price that they want!
Or, they can start thinking about tenders and bids to even increase the engagement of their users for the NFTs.
There is a huge demands for NFTs from collectors to flex their lazy lion or any other COOL NFT out there that they are investing on.
It is very similar to buying a collectable classic car.
Normally you buy such a car if you are a raving fan of classic cars and you have lots of money.
NFTs are giving the same feeling to collectors too.
Only one person OWN the asset.
The rest of the people can have a cop, but how much really does it cost?!
Imaging having a copy of Mona Lisa painting. Nobody really interested to pay anything meaningful to you to have the copy.
However, imaging having the actual Mona Lisa painting and you have a way to prove that you are the owner. This is priceless.
Now that we know why investors and collectors are buying NFTs, this can become a n interesting discussion to see how enterprise companies can invest on NFTs to grow their business.
Twitter founder, sold his very first tweet as an NFT for $3.8M.
Enterprise businesses have the capability to sell their nostalgic products on NFT market for a good price.
Imaging to have the very first code for Microsoft Windows 3.1 or 95, Having a rare photo of IBM machines and servers, or the music note for famous music, behind the scene stuff for popular movies, Ikea design plan for their popular tables, first MVP of Uber, or anything that people are following for different reasons, can be transformed into an NFT and sell.
Great revenue generation tactic.
Both independent movie producers and directors and also big Hollywood blockbuster movies can now be offered as NFTs and even in an auction to compete for higher value deal both from investors and also crowd funding.
Independent movie producers are now offering their movies not just for profit, but only as resume builder pieces to get the attention of high ranked producers and movie companies for future projects.
Their strategy is based on hope.
Meaning that these directors and producers are hoping that they can get enough attention during their life so that they can be head hunted for bigger projects.
Movie studios, agents and named producers are acting as middle man to go after new generation of directors to make more exciting movies.
However, the reality is that very small percentage of these young directors can make it to the top.
The rest are doomed to work on small projects for the rest of their life.
With NFTs now sky rocketing, now each single director and producer now can offer their movies and projects to the crowd and even collectors and investors and expect massive success.
The new generation of directors are now can compete for funding just like big names in the industry and have a great chance of making something meaningful.
The opportunities in sport is endless.
Imagine that now athletes can share their top moments and peak performances as a NFT and put them on auction. The magical moments in top athlete lives can now become a collectable and be sold on NFT marketplaces.
Imagine having a rare collectable of the moment that Roger Federer become champion in yet another grand slam.
Or when Christiano Rolando scores another goal for Manchester United football club.
This is yet another revenue stream for top athletes around the world on top of sponsorship contacts, social media engagement and now NFT market place.
The same opportunity is available for sporting clubs as well. Now, they can share their top team success moments as a collectable piece of art on NFT market places and again without relying on sporting distribution channels, offer these rare moments to a group of hard core fans online.
I want to personally see this happens soon.
Fortune 500 companies are leading the global tech transformation for all of us. We are heavily relying on these companies to get things done.
Fortune 500 companies can offer their history and grand moments on NFT market place as well.
For instance, IBM can now offer photos / films or voices of their classic inventions as a NFT and generate another stream of revenue.
Another option might be to offer the beta releases to the hard core fans as NFT for testing and feedback analysis.
This way, companies can make money while they test their products and also flex as well.
Just like Fortune 500 companies, healthcare startups and enterprises can offer their art works as NFTs as well.
This can be a classic medicine formula, documents, important discoveries (COVID-19 vaccine discovery moments) or any significant achievement that is documented over the course of history, can be offered as NFT.
Now that you have reached this part of the blog, you may guess what I am trying to say again.
Either architects and / or real estate companies can release their significant design as NFT to the market place and benefit from the huge market that is available for them.
Obviously, big brand architects can lead in this space. But the opportunity is there for anybody with a bit of story telling skills to unlock the opportunity in this space.
This will be one of my favorite areas. Given the fact that government is more slower than other industries, but when they come on board, things will become very interesting.
Imagine all those political documents, rare photos and footages, can be released as NFTs!
What an impact.
I personally predict that if government enter NFTs, which they eventually do, they can beat everybody in this space.
The nature of their media is so exclusive that their artwork can sky high all the auctions and bids.
I will write more on this in the future.
NFTs are artworks that shared by the creators and investors are happy to pay big price for them to have them on their collections.
Any industry can become a creator and offer their peak moments as NFTs not just to build another revenue stream, but to make a more positive impact and publicize the moments of history that people may have forgot.