eCommerce Brands Should Start By Understanding NFTs: It's The Foundation of the Digital Economy
I was on with the The Biz Bros podcast recording yesterday and one of the topics that came up was trends. In particular around NFTs.
Let's start here. NFTs are about a global public and verifiable way to prove that you own something in the digital world. That digital ownership can represent anything.
If you can prove you own something, and you can get paid for it, then you can create a digital economy around it that works no matter what company or individual you are trading with or what government they are under.
Why should I care about this? - If I want to trade with anyone, anywhere, it's difficult to use paperwork or transaction formats that are not universal and verifiable. Too much trade friction.
- With the rise of digital goods, you need an ability to create an economy around it that survives and is liquid across companies, geographies, and titles -- not just "in-game".
- There are already many examples of hybrid physical and digital goods (just walk down any toy aisle, but other categories have examples) -- namely physical items that can be modified digitally. It will need to be possible to create works for those digital platforms, the creators get paid, and individuals can trade or prove ownership of their works and derivatives.
The technologies that "promise" to solve this, and I will use the word promise because these technologies are extremely difficult to use today, all have issues that I believe require a lot of innovation in the next 20 years.
The next 3-4 years, most companies should start by focusing on understanding what is happening. Then start to imagine the first few consumer scenarios that will start becoming more commonplace in the next 10 years. Most consumers are not ready to adopt, but the pioneers are starting to experiment.
Exciting times.