The excitement for non-fungible tokens (NFTs) is certainly one of the brightest events of the previous year, whether we are talking about them in relation to technology, marketing, art, or social networks.
NFTs have brought together all these areas of our lives. What are the main trends that will affect the future of the influence marketing industry? And how does the NFT market work? Let's clear that up.
An NFT represents a unique digital item (for example, a piece of art, animation, photograph, or video recording). A private Ethereum blockchain makes and keeps certificates, allowing people to store tokens on a crypto-shelf and transfer them to other people, with the NFT data confirming your digital ownership rights. The possibility of reselling NFTs, embedded in their smart contracts, allows us to consider them as investments. The list of what can be done with an NFT (and how that relates to copyrights) may expand in the future. In the meantime, however, everything happens exclusively within the blockchain network.Still not sounding very clear? Let's have a look at some examples. Twitter founder Jack Dorsey sold his first tweet to NFT for $2.9 million. What does the customer get in this case? A digital confirmation that he owns a unique (not interchangeable, AKA non-fungible) digital asset. Dorsey received money, and the buyer, in addition to the NFT, gets a strong sense of ownership in the global IT community.
The value of non-fungible tokens is well illustrated by Malevich's avant-garde masterpiece known as Black Square. Yes, anyone can draw a black square, but, if the picture of that square was for sale, a buyer would receive not just a black image in a frame, but a unique history and a role in the world's heritage.If you have a token, it does not limit others' access to the digital object (whether it’s an animation, photo, or video), unlike ordinary items sold with digital assets. So, what does the buyer get then?The NFT confers public proof of the ownership and authenticity of an item, which may or may not include copyright. This is similar to real-world artists selling work but retaining the intellectual property, as explained by Frank Gerratana of Mintz, a law firm.
Almost any virtual object can be sold as an NFT, including images, music, text, and 3D models. But we are usually dealing with objects of digital (or digitized) art. Experts call it the next step of the Internet's evolution – the era of Web 3.0. The term is commonly used to describe the principles of the Internet's decentralized work with cryptographic tokens. And, according to crypto-enthusiasts, this is our future.It's important to note that social media is trying to keep up with overall Web 3.0 trend development. TikTok launched its first NFT collection of socially significant videos. This is how the company explains its decision: “TikTok Top Moments features a selection of six culturally significant TikTok videos from some of our most beloved creators. Each one-of-one NFT celebrates the impact of these creators – including Lil Nas X, Rudy Willingham, Bella Poarch, Curtis Roach, Brittany Broski, FNMeka, Jess Marciante, and Gary Vaynerchuk – have made across entertainment, culture, and the TikTok community. The featured creators, renowned for their creative cultural impact, are partnering with prominent NFT creators, including COIN ARTIST, x0r, RTFKT, Grimes, and more, on limited edition NFTs” (for more).
It's fair to say that TikTok won't stop and that the practice of releasing NFTs will continue. This does and will have a direct significance for marketing inflation, meaning that, in the future, the way influencers earn money can fundamentally change. Currently, influencers make money from audience contributions, using various services such as Patreon or Buy Me a Coffee, as well as through marketing collaborations with large or small brands. NFTs, theoretically, can turn the market around; creators would not only make content for the audience but would also share tokens in exchange for financial support. Attracting more finance to the market will strengthen creators' independence in the future.
For example, back in early 2021, YouTuber and boxer Logan Paul made a live broadcast while unpacking the super-rare first printed edition of Pokémon cards. Snippets of the video turned into NFT on the principle of "one card/one token." Logan Paul himself became a token, (or rather, a card with his stylized image). In total, 3,000 NFTs were put up for sale. The total revenue exceeded $5 million.
Maybe it's all hype and nothing more, and, in six months, everyone will forget about NFTs. Perhaps mentions in the media should really decrease a little. That would be completely reasonable.
For example, oversaturated exposure regularly happens with cryptocurrencies, including Bitcoin. However, the attention paid by tech giants to the technology reveals that the popularity of NFTs will only increase from one year to the next. Twitter announced the introduction of the NFT avatar function, which is a serious step towards the development of the industry.
You probably saw the news about the boy who sold a collection of pixel whales and made a fortune on it. It was his second NFT collection, including 3,350 pixelated whales. The project became a sort of meme using the image of a whale, with traits similar to the iconic pixelated CryptoPunks, one of the first NFT collections to exist.
Images from the CryptoPunks collection are sold at a much higher price. NFT avatars – invented as Punks tokens – are sold for millions of dollars. COVID Alien, depicting an alien wearing a protective mask, is the most expensive in the set. The previous owner, known as Sillytuna, bought an 8-bit 24 × 24 pixel picture through an OTC deal. Later, he sold the picture in Sotheby's for $11.754 million.
Of course, these examples are extremes; transactions worth millions of dollars are not made every day. Selling NFTs is not that easy, even if you have a name in the art community. That's why influencers are in a privileged position. They already have hundreds and thousands of loyal followers ready to support their favorite bloggers. And, if followers also get something in return, like an NFT itself, this will increase audience engagement even more. After all, an NFT will last, unlike a one-time donation. It can be exchanged or given, or you can just enjoy the fact that you are the only owner of this unique digital asset.