NFT: What It Stands For, What It Means, and Why the Creative Opportunities Could Be Endless.
Welcome to 2021, where the vast majority of our lives are online, including the way we buy, share, and trade unique assets. What used to be tangible goods is slowly but surely conforming to the ever-evolving digital landscape. Cue NFTs.
You may have noticed this acronym floating around the last few years, but what does it stand for? NFT stands for “Non-Fungible Token.” “Non-fungible” means it is unique and cannot be replaced. Unlike a cryptocurrency like bitcoin, which is fungible in nature. For example, if you were to trade one bitcoin for another, you’d have a different unique bitcoin, but the same exact monetary value. However, if you were to swap a rare baseball trading card for, say, a Pokémon card, you’d have something completely different. The baseball card’s value is not attached to the value of anything other than its rarity and a desire to own that exact card.
So how does it work? In a nutshell, NFTs are part of the Ethereum blockchain. Similar to bitcoin, Ethereum is a cryptocurrency, but is different in that its blockchain supports these NFTs and ensures no assets can be counterfeited or reproduced and that they can only be owned by one individual at a given time. This has led to the increasing popularity of digital collectibles, such as NBA Top Shot, Nyan Cat, and CryptoKitties.
And brands are beginning to take notice. NFTs didn’t just pop up overnight. In the last few years, they have been utilized across various different industries, including e-gaming, sports, music, fashion, and more. However, in recent weeks, NFTs have taken social media by storm, leading brands to want some skin in the game. And, we sure did.
NFTs seemed like the perfect playground for Taco Bell. The brand has always viewed technology and emerging platforms as another paintbrush for creativity, and with so much ownable IP and brand love, we knew fans would want to get their hands on some original digital art.
Introducing NFTacoBell – iconic and original artwork inspired by (and priced like) the Spicy Potato Soft Taco and the Crunchy Taco. Not only did fans have the opportunity to own their favorite tacos and hold them in their hearts and digital wallets, but the original buyer was also surprised with the gift of Taco Bell for a year upon purchase.
We released five pieces of art, with five editions of each piece, and the whole collection (25 total) sold out within 30 minutes of the drop, via Rarible, a software and website that allows digital artists and creators to issue and sell custom crypto assets. And while we set a reserve price on all the art, so the cost stayed firm at $1 (with all proceeds going to charity), we had owners reselling the pieces in hours, with bids as high $177,000.
The biggest opportunity right now is to innovate on what owning a collectible item means. Up until now, we’ve been treating NFTs like physically collectible objects that just happen to be digital. However, they are more like infinitely malleable all-access passes. Passes to what? Let your imagination go wild. For example, picture an airline minting a collection of NFTs that are not only desirable for their aesthetic value, but also grant their owners an additional bonus. What bonus? Well, maybe today it’s an extra 100 flight miles per trip, maybe tomorrow it’s complimentary drinks on the flight. Now you’ve compounded the desire to own the NFT, you can refresh the value proposition over time—and you’ve got people trading these NFTs for the collectible value, the customer-centric value, and the bragging rights.
NFTs are complex and intricate, but don’t sleep on them as a creative opportunity. Next time you’re looking to launch a new product, reward fans with swag, or just foster something great online, consider NFTs as part of your strategy. It’s really not too late to start thinking about the near future. And it’s always a good time to envision future customer journeys. Try a brainstorm and see where your teams go. You’ll be shocked. The party is just getting started.