Spirit labs
May 23, 2022

Why do NFTs Matter to Small Businesses?

  • #Software Development
  • #Blockchain
  • NFTs have recently been a hot issue. Firms of various sizes are striving to benefit from NFTs (Non-fungible Tokens). But well-known businesses are not the only ones benefiting from this new funding model, NFTs are also well-suited to a variety of other small businesses.
     

    Let’s begin the journey of applying NFTs to your business with Spirit Labs right now!

    What are NFTs?

    NFT is the short form of “non-fungible token” which is a one-of-a-kind digital asset secured by blockchain. Every item ownership is documented in the distributed ledgers, and can be allowed to be bought and sold.

     

    For instance, authentic and pirated NFTs are distinguished from each other by the digital “footprint”. It’s a unique deal between a genuine or fake Van Gogh as only one is the true artwork, while the rest of them are just imitations in the market.

    How do NFTs Work?

    Thanks to the distinctive construction of blockchain technology, each NFT has the potential of multiple applications. A digital asset management platform is appropriate for representing actual assets from real estate to artwork online. Because NFTs are constructed on blockchains, they may also act as identity management systems in order to eliminate intermediaries and link artists to audiences or make transactions more efficient.

    The Potential of NFTs

    According to the website's Non-Fungible Tokens Quarterly Report: Q2 2021 Second Quarter 2021 Report, that three-month window was a record breaker for the NFT industry. The nonfungible.com report shows that in Q1 2021, the total volume traded exceeded $500 million. During Q2, it soared an additional 40 percent to more than $700 million.
     

    Two of the biggest reasons for the growing adoption and increased sales of NFTs are that humans like to collect things and NFTs are programmed to be scarce. Basic economic theory states that scarcity of nearly anything in demand bids up its price.

     

    NFTs are easily created to be converted to digital objects, which includes both tangible and intangible items such as music, tweets, gifs, art, designer objects. Many crypto-trading enthusiasts and art collectors use NFTs, while a lot of celebrities have taken an interest in the NFT in addition to releasing unique memories and artwork.
     

    Additional attributes of NFTs are:

    • Digital permanence: They last as long as the blockchain they are built on continues to exist.
    • Cannot be counterfeited: Anyone can confirm authenticity by checking the blockchain.
    • Provable ownership: Which can be transferred if the NFT is programmed for resale.

    Top 5 Practical NFT Use Cases

    Ensuring Authenticity of Products

    As the NFT information is permanently placed on the blockchain, checking for rarity and authenticity of the product is easy. NFTs can also be used to store information about the manufacturing process, ensuring that everything is fair trade.

     

    At the present, the world has been facing fake food products like supplements and medicine and NFTs help solve this problem by tracking and tracing food products. Imagine scanning a QR code on a nutritional supplement you purchased online and viewing the supplement's full journey from manufacturing to delivery.

    Real Estate

    NFTs could be used to transfer land deeds, provide proof of home ownership and keep track of changes in property value over time using time stamped NFTs. NFTs can be used to define and speed up transactions, enable smart contracts for properties with automatic payments or even create decentralized home rental services.

    Medical Records and Identity Verification

    NFT is used to validate on several nodes when being added on blockchain ledgers, so an individual’s medical records are stored without compromising confidentiality or risking tampering from external sources. Therefore, verifying patient lifelong identities are provided and linked to their birth certificate.

    Supply Chain

    NFTs can be attached to a product to give it an NFT identifier that cannot be tampered with. Businesses can control the quality of their products and have the ability to track the manufacturing through shipping and delivery. Moreover, it can be also applied for the customers’ side to get to know about the flow of money spent as well as the product status.

    Gaming Industry

    NFTs can be integrated into the gaming world by allowing NFT cross-platform playability. They give game developers opportunities to expand their brand and create another revenue stream, while gamers are given more interest to keep playing a game. 

     

    Players do not have to worry about the authenticity of in-game items as each of them has a certificate for proven rarity and is instantly secured on the blockchain when transactions happen. 
     

    For example, Axie Infinity is the successful use case in the gaming industry which utilizes blockchain-based technology. 

    NFTs Applications to Small Businesses

    To pull it all together, small businesses could create an NFT, in which they convert products to digital assets, and then sell them on a marketplace for cryptocurrency. The transaction and all the data would be recorded on the blockchain. The exchange is so simple that your business gets the payment for the NFT, and your purchaser gets the NFT.

    Crowdfund By Selling NFTs

    Small businesses can take the crowdsourced investing route to raise money for your next project or scale an existing business. Either way, you might consider selling NFTs as a way to reach your funding goals. However, you need to market and educate the value of your NFTs to investors and make sure to get a full understanding of the NFT investing audience’s demands before designing anything to sell.

    Build NFT Loyalty Campaign

    You can persuade buyers to get along with your business by giving free NFTs to them in a specific way. For example, you might generate NFT collections seasonally or annually. By that way, customers would have a reason to keep buying what you sell or, if you’re in a renewal-based business, upgrading their subscription.

     

    In other words, a customer loyalty program is considered to give your customers a digital NFT loyalty card. Every time they visit your website or your business, they would be able to get loyalty points by scanning the NFT card. 

    Set Up NFT Authenticity Behind Corporate-based Activities

    Remember that people are spending thousands of dollars on NFT pet rocks that alone illustrates how effective NFTs to be a part of something new can be. NFTs are not all about artworks and graphics, they also legitimize something in the real life or digital world and can be used to indicate product status or ownership certificate. 
     

    Small businesses can start giving event attendees tickets or certificates in the form of NFTs in order to prove the authenticity and step by step attract customers to know about your corporation as well as your blockchain-based technology. Moreover, companies can sell NFTs that allow customers to get consulting services, then the holders could resell the NFTs, and companies would get new clients every time they are resold.

    Be with an Influencer to Partner on an NFT

    An NFT partnership with an influencer could be the quickest way to energize target audiences. 

    However, businesses need to consider the right KOLs to accompany with, so both the form of NFTs and the influencer could make a win-win agreement. In addition, approach method is also an important factor as NFTs have a hype-worthy image which means an emailed promotion code is not a good idea.

    Conclusion

    You can accept cryptocurrency or apply NFTs to your products without setting up complicated steps to create rapid cash flow when trading them. That being said, residual royalties would come after when the resales rise thanks to a good approach method. 

     

    In conclusion, the form of NFTs is the future, in which businesses have several ways to utilize them to make profit. The first step is always the hardest step, digital solution companies are always willing to help you get informed about NFTs. 


    Contact Spirit Labs or visit our website www.spiritlabs.co for more information about how to apply NFTs to your business.

     

    REFERENCES:

    • Article: 10 Practical NFT Use Cases Beyond Digital Artworks
    • Article: What is an NFT? How does it work?
    • Article: NFTs: Why They Matter to Small Businesses
    • Blog: How Small Businesses Can Profit Off Non-Fungible Tokens (NFTs)
    • Blog: What NFTs can do for small business

     

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