Issue #9: NFT 2.0 - Riding the next mega trend
What is NFT 2.0 and how could it be used to create the new wave of tech giants?
Reading time: 3.5 MinsMega trends are decade defining (if not longer) changes in how we as a society operate; be it shifting economic powers, demographic changes, resource scarcity or technological breakthrough.
NFTs have been referred to as blockchain’s “mobile moment” (the mobile /smart phone revolution has been likened to the invention of the wheel).
So far NFTs have generated $41b (source) in trading volume on Ethereum alone.
With only 4m (source) unique holders, many of us (myself included) have only just got our heads around this new tech but mainly remain on the side-line.
This is rapidly changing though so let’s find out how…
NFT 1.0 – Permanent Immutable
Although the first NFT that caught on were a cute cartoon cat game, NFT 1.0 is defined as a function of what they enable - the ability to make a something digital unique.
This is the first application of the technology stage where we find an early idea that takes hold.
Example Company - Aesthetes
Aesthetes is a really cool project out of Milan, Italy that has made waves in the XRPL community by bringing Phygital (digital copies of physical art etc).
They buy and store artwork pieces, converting the the right to own it into fractional NFTs.
This has the effect of allowing more people to get financial exposure to art as an asset, the increase in value directly.
This is NFT 1.0 in action, summarized neatly by this quote:
"The first iteration of NFT is more about tokenizing digital assets such that they are made unique and storable on a blockchain network where they become immutable, verifiable, and cryptographically secured. ” ~ Daily Coin
So what is NFT 2.0…
NFT 2.0 – Unique Experiences
There are three things that set NFT 2.0 apart from NFT 1.0:
Extensibility - you can now use multiple NFTs in a bundle to create a brand new NFT e.g. say you have an avatar represented by an NFT in a virtual world. To clothe this representation of you, you buy individual NFTs for each item of clothing they wear. All together these NFTs make up you’re avatar NFT.
Interactivity/Dynamism - say you buy into an NFT for a new football (soccer) player. If they get the “Ballon D’or” for the year that NFT could automatically upgrade to a golden version making it more valuable and rare.
Generativity - This to me is about smart NFTs where they can detect the context they are being used in. These NFTs have super powers to select what aspect of their content can be used in a given situation e.g. audio on Anchor, video on YouTube etc.
These three attributes give NFT 2.0 the power to drive unique experiences for fans everywhere.
There are a number of brands already tapping into these new uses:
Starbucks Odyssey - The Starbucks Odyssey Begins via Stabucks
NikeLand (RTFKT) - The Amazing Ways Nike Is Using The Metaverse, Web3 And NFTs via Forbes
Australian Open - AO launches into Metaverse, serves up world-first NFT art collection linked to live match data via Australian Open
Implications
NFT 2.0 will be a super-powered marketing tool (in my opinion).
Once the need to profit from JPEGs is removed and it’s more about people getting into an NFT collection for the utility or perks it brings.
Marketers will be focused on giving as much value/entertainment as possible so they keep the NFT for as long as possible - why is this important?
Having something in someone’s wallet is a direct line to them and communities will pop up around these assets, linking people with shared interests.
As you will be able to see all the NFTs in someone’s wallet you will be able to see who they overlap with between communities.
We’ve seen the rise of TikTok and their dominant interest graph algorithm. Marketers can use the knowledge of people’s interests to better guide products, services and future experiences to these fans.
NFT 2.0 could hold the keys to a new decentralised version and where we could see the rise of the next wave of FAANG sized companies/communities.
Further reading
To keep this post concise I removed a lot of content from the following sources so you may want to read up on these to get a much fuller picture.
NFT 2.0: The next generation of NFTs will be streamlined and trustworthy ~ Cointelegraph
NFT 2.0: The Next Version of NFTs Are What Tokens Were Meant to Be ~ Victor Zhang via BeInCrypto
In the metaverse and NFT 2.0, marketers should focus on utility and community ~ Jack Cameron, Insomnia Labs via Venture Beat
That’s it for this weeks newsletter. I hope to be back to normal service next week!
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