NFTs are more than just a means of selling art.
NFTs have made it possible to create a publicly accessible, readily verifiable, and tamper-proof digital evidence of title for an asset by merging non-fungibility with blockchain technology. They can be employed to verify ownership of real-world assets, secure digital assets, and provide access to new communities.
NFTs do not limit themselves only to artworks or paintings, you can leverage NFTs for brands to create brand awareness as well.
To explain effectively while considering the advice of experts, let's look at what the Founder and CEO of KoineArth Dr Praphul Chandra has to say about NFTs using a reference from a recent podcast interview on B2B2C.
What are NFTs?
NFT stands for Non-Fungible Tokens. Put simply, an NFT is a digital certificate.
Now consider where you deal with certificates in your daily life, and then we'll discuss the value of having a digital certificate that is globally verifiable.
When it comes to a human's life, the first time you engage with a certificate is perhaps when you complete your tenth or twelfth grade board exams. That certificate is most likely in a file or a cupboard somewhere. That certificate is something that is useful year after year for a variety of reasons. Assume you've applied for a job. After clearing your interviews, you will likely be asked to submit your education certificates.
Consider how your education certificates will be verified by the HR department. Today, the HR departments rely on agencies which specialize in this. These agencies actually call up the educational universities to verify the authenticity of the educational certificates. As you can imagine, this is a very manually intensive, time consuming and expensive process. The costs are even higher if you have applied for a job outside India. Yet, this is unavoidable since, unfortunately, there are cases of educational certificates being fudged and counterfeited.
Now, imagine all educational certificates as NFTs - digital certificates that are publicly verifiable by anyone anytime. This is a great example of value creation with NFTs.
NFT is the verification of originality?
NFTs (Non-Fungible Tokens) are the verification of the authenticity of the certificate. Period. The contents of the certificate are up to different applications.
Is NFT a value determinant?
No. NFT isn't a factor that determines the worth of something. NFTs are simply records of ownership. They are publicly verifiable records of a claim made by someone and verifiable by anyone.
Can NFT be a tradable commodity?
Assume you decide to purchase a bike or a car. You go to the manufacturer or the dealer to buy it and then you go to the Regional Transport Office (RTO) to register your vehicle. After registering your vehicle, the RTO gives you an RC card (or an RC book) - this is basically a title, a certificate of ownership. A certificate appears to be in play once more.
Similar to the academic certificate you received, except this time it can be traded or transferred. Because you can sell your automobile to someone else and transfer the title, you can also transfer the RC card - or a fresh RC card is issued in place of the previous one. The RTO, or nominated authority, is in charge of this.
Let's take another example. Let’s say you want to purchase a house. You acquire your title deed from the sub registrar's office.
What is a title deed, exactly?
It's a transferable ownership certificate.
What is the name of the designated trustworthy authority?
It is the office of the sub-registrar.
The goal now is to see whether certificates of ownership (or title deeds) can be issued for other assets like watches, artwork, and movies?
Is it possible to issue ownership titles for any asset in the world?
In theory, yes, but you'll need to set up the trusted organizations that will keep track of the register and issue the certificates.
What's happening now with blockchains, web chains, and NFTs is that creating such certificates in a register of records is becoming quite simple. That is where you see different companies emerging and inventing, saying, "Here are the different classes of assets that we can develop a register for, issue certificates of ownership for, and so allow credibility for, with no restrictions on how they exchange and between them around the world." One of the most effective examples is digital art.
Is NFT transferable or not?
At its most basic level, an NFT is a digital certificate that can be verified globally by any entity without the need for assistance because anyone can read the public database known as the blockchain. Non-Fungible Tokens can be either transferable or non-transferable.
What is the difference between Cryptocurrencies and NFTs?
While both NFTs and cryptocurrencies are based on blockchain technology, there is a growing argument that NFTs should not be bound to the same rules and regulations as cryptocurrencies.
Consider an academic certificate that becomes a non-transferable NFT.
Is it reasonable to handle it as if it were a currency?
It doesn't seem right. You don't treat a property's title deed as currency, and you don't use a vehicle's RC book as currency. These are two fundamentally different economic notions.
NFT and cryptocurrency are both asset classes. However, we don't believe that combining them both under the umbrella of virtual digital assets without employing a second level nuance to distinguish them is scalable in the long run.
Why Are Non-Fungible Tokens (NFTs) Important to Brands?
One of the main aspects why NFTs are important is that NFTs for brands allow brands to connect directly with their fans and sell their work without the involvement of middlemen. In other words, brands can actively develop whole economies or ecosystems around their audience.
It provides customers with not only an NFT symbolized by a token, but also various kinds of utility deemed desirable by the community, which increases engagement. For example, exclusive rights to certain events or access to exclusive products.
Example of Brands using NFTs
Here are some of the well known Indian brands using NFTs to connect with their fans or community with ngageN marketplace.
MakeMyTrip, an online travel company, has launched limited edition NFTs. According to MakeMyTrip, the artwork for these NFTs was conceptualized and produced to celebrate some of India's well-known as well as lesser-known travel jewels. The branded token will allow travelers to own digital collectibles of their favourite places.
Now Funding Tomorrow NFTs
On the occasion of World Earth Day, Seagram’s 100 Pipers launched the first NFTs that grow trees, in its ‘Play For A Cause’ campaign. Over the course of a year, the goal is to plant a million trees. The 13 environment-themed NFTs were sold out within 10 minutes of its release. The proceeds from the NFT auction were given to the Aroh Foundation, which will use them to promote environmental regeneration.
Phygital Sports NFTs
Sportzchain introduced India's first phygital NFT, which is a perfect combination of a unique physical object and a digital twin (tradable NFTs). Sportzchain also offered extra benefits to collectors as part of the phygital launch. Player meet and greet matchday tickets, as well as early access to Tamil Thalaivas fan tokens, were among the perks.
The MG NFT (Non-Fungible Token) was launched by MG Motor India as part of its new NFT (Non-Fungible Token) venture. To enrich the overall ownership experience, each MG NFT has its own unique backstory. The branded tokens also offered buyers privileged invitations to exclusive events and other benefits.
The producers of the movie, Radhe Shyam, chose an innovative approach to market their film by releasing NFTs. The first 100 customers who bought the NFTs will get the chance to meet Prabhas– the film's lead actor.
These were just a few examples, branded NFTs can be seen in a variety of ways. Corporate NFTs like Adidas NFT, Coca-Cola NFT, McDonald’s McRib NFT, Nike NFT, are some other examples.
Data as an NFT: Product Passport
The phrase "data is the new oil" has become virtually cliché. The challenge that we are solving with our enterprise NFT platform marketsN is enabling consent-based, secure, auditable B2B data sharing.
Let's look at an example. We have been collaborating with MG Motors India, which just developed a car passport. A modern car or vehicle contains a large number of sensors. As a result, each vehicle creates a large amount of data. Although the car manufacturer may be the custodian of the data, the data ultimately belongs to the vehicle owner. This is an example of data that belongs to an individual–the vehicle owner–the custodian is the car manufacturer, and a third party–the insurance company–would like access to it in order to determine your driving profile and behaviour.
The aim is to set up an incentive system so that people are motivated to share their data with the insurance company so that they can provide better drivers, lower insurance premiums or usage-based insurance. And that is exactly what the passport enables: a data exchange mechanism that is shared transparently between the vehicle owner, the automobile manufacturer, and the insurance company after the vehicle owner's approval is obtained.
Now, they have established a system where we can derive value from data because the lower insurance premiums are passed on to the end customer, but the cost to the insurance company is also lower because we have a better understanding of the risk they are taking. Therefore, attempting to achieve a balance of incentives and rates for all parties involved.
The example provided between a vehicle manufacturer and an insurance company is an example of a private ecosystem between businesses. It must also be private in order to protect the data's confidentiality.
In some ways, the car passport is an example of– we prefer not to use the term NFT since most people think of NFT when they think of a certificate on a public blockchain. This is known as a product passport in this instance. It's also known as a private blockchain-based enterprise NFT. Although many people would object to the term NFT being used in a private blockchain area, we will use it to explain the concept. We call it a product passport in our case, and it's one type of digital asset in a private ecosystem.
The future of Brands and NFTs
Let us tell you where we think these NFTs for brands are headed. Digital art is receiving a lot of attention right now. In general, digital art is generated by artists or creators, but it can also be sponsored by brands, which can create artworks by recording their brand history and giving it to people who are fans of the brand. And they want to put this artwork on their social media walls, video games, and other social media platforms.
NFTs for brands will become a method to develop a community of their most committed followers and customers who want to display or brag about their relationship with the company in one of two ways.
People who own products from brands like Nike or Apple are extremely proud of their possessions. When someone pays twice or three times the price for a T-shirt with the Nike brand logo on the front. They are mostly paying for the brand's assistance in establishing an identity.
When someone buys a premium bike or a premium automobile, they are buying into the brand philosophy, brand story, and brand belief as much as the physical thing itself.
NFTs (Non-Fungible Tokens) are a way of connecting brands with fans.
The birth of KoineArth
The founder and CEO of KoineArth – Dr Praphul Chandra states that his research focused on non-cooperative games. It examined a system in which the players' incentives are not entirely matched. However, you build up the system so that the activities have an impact that is aligned with the group's maximum utilization potential. This is a topic of non-cooperative game theory called mechanism design, in which we create mechanisms to fulfill goals such as aligning the incentives of multiple entities toward a shared goal.
He had worked on a framework that discussed how private entities may come together and fund a public good project throughout his PhD thesis. Many individuals are aware that a public good project is one that is not owned by a single individual. However, if the public good is established, it will benefit all members of the organization.
His thesis titled "Incentive mechanisms for crowdfunding and crowdsourcing", primarily addressed the question of whether public goods may be created without taxation revenue. Taxation occurs when an entity or authority, such as the central government, imposes a tax on an individual citizen using the power of law. individuals pay taxes, which are subsequently used by the government to publish public goods. And, because the government is chosen through representatives, the primary function is to provide citizens with public goods of their choosing.
What Praphul and his collaborators were trying to do was to remove taxation from the equation. Can you set up a system so that people want to contribute to public goods of their choice because the incentives are aligned? Therefore, short circuit the process and create public goods using crowdfunding.
That's how they were able to design a couple of mechanisms, and the first work they did for smart contact and NFTs back in 2017 was actually a prototype implementation of the mechanism that Praphul had designed during his thesis and implemented them as smart contracts on the blockchain to show that it could be done. That was the origin and birth of KoineArth.
KoineArth’s ngageN platform and Non Fungible Tokens (NFTs)
ngageN is an exclusive platform that facilitates NFT economies between brands and creators. It is an invitation-only platform for legitimate brands and creators to drive new kinds of fan interaction, revenue streams, and community building by establishing NFTs which deliver exclusive digital assets and experiences. ngageN does not require users to hold any cryptocurrency, it follows copyright rules, and permits legitimate NFTs with trusted provenance.
Is it possible to decouple NFTs from cryptocurrencies?
Yes. ngageN is the first platform where you can buy NFTs only in INR. The ability for end-users to come to the platform and pay in INR to purchase NFTs and do so as effortlessly as they would on an e-commerce platform, and then receive NFTs. We worked on this simplification to ensure that NFT adoption is more white screen.
Is ngageN looking to completely remove crypto from the question?
That is right; neither the buyer nor the seller requires cryptocurrency on ngageN. It's an entirely fiat INR-based platform.
As Web3 progresses, crypto gets more incorporated into our everyday lives. At first, diving into the dark seas of Web3 may appear intimidating. Brands must find out what works for them over time using trial and error and observation of what wins and fails for competitors. NFTs for brands will become a method to develop a community of their most committed followers and customers who want to display or brag about their relationship with the company in one of two ways.