Artists, musicians, and creators increasingly use non-fungible tokens to authenticate virtual works.
Digital entrepreneurs and media outlets like Gary Vaynerchuk are raving about NFTs as the “next big thing” for tracking ownership of digital assets.
Signature W Studio explains NFTs and how marketing agencies can use them to track virtual assets better on the blockchain.
What is an NFT, and how do they work?
A fungible asset, in economic terms, is an item that can be exchanged. This includes money. If you had a $20 bill, you could swap it for two $10 notes and not be any poorer. A non-fungible item is something that cannot be traded for another.
There is only one original of Andy Warhol’s Campbell’s Soup Cans or Vincent Van Gogh’s Starry Night. These works may be sold as prints or duplicates.
An NFT can be considered the “original version” of a digital asset. The possession of an NFT is recorded on the blockchain as proof of ownership.
It is impossible to falsify the blockchain ledger because it is maintained by thousands of computers worldwide. NFTs may even include smart contracts allowing artists to receive royalties on future token sales.
Why are NFTs so popular?
Many are baffled by the sudden popularity of headlines announcing the first Tweets were “tokenized” and sold for $2.5 Million. NFTs offer artists a rare opportunity to prove digital ownership.
It’s becoming increasingly more work to prove the ownership of digital assets, such as music, images, and videos, with an online domain. NFTs must be created, minted, and added to the blockchain like cryptocurrency. This gives digital materials a sense of legitimacy that was not there before.
The NFT embeds the creators of the digital assets permanently into the blockchain ledger, so there is no doubt about the original artist.
What are the benefits of using NFTs for digital marketing agencies?
We still need to determine how the NFT market will affect marketing agencies or other businesses. Early adopters and innovators, however, are determined to make the NFT marketplace profitable.
Here are some ways marketing agencies can stay ahead of the curve by implementing NFTs and better serving their clients.
An NFT can be described as a digital asset that represents the ownership of an actual object or asset. The best way for a digital marketing agency to use an NFT would be through contracts or agency agreements.
Using an NFT to mark the contract, a digital asset links the agreement with the creator. This makes digital arrangements more official and shows that the agency has the latest technology.
Retainer Tokens and Licenses
NFT is a license for agencies who work with retainer models. The NFL stadium and seating licenses work similarly. An NFT is a way for a client to purchase the right to work with you.
Clients must pay monthly fees, but the license is theirs forever. They can sell it as a referral. The sale of the retainer license will also net you a royalty.
The larger your brand is, the higher value you will get from a retainer NFT.
Proof of Deliverables
Agencies also use an NFT to signify a video, a set of files, or a website delivered to a client. This is an excellent way to mark a completed project, as it will permanently be recorded in the blockchain.
Sell Digital Assets
NFTs can be used to create digital art and sold as such. Some artists use intelligent contracts and blockchain to create their artwork, which allows NFTs as a medium to be used.
The blockchain allows for the more efficient trading of digital assets while reducing the risk of fraud.