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Last week I sat down with a friend to discuss her shopping habits. This friend won’t mind me telling you that she has a wardrobe full of unworn clothes. Shopping is her go-to form of release. She shops both on and offline and fiercely  loyal to her favourite brands. It is safe to say that she has a passion for fashion. However, she is running out of space. 

With this in mind, I asked her to consider a digital wardrobe and began showing her some of my wearables. NFTs are giving us an unprecedented opportunity to change consumer behavior, assess our habits and create alternative experiences. Perhaps, one that won’t take up real space and won’t have as damaging cost to the environment.

What are NFTs?

An NFT is a non fungible token. A unique digital identifier that cannot be substituted or copied and is recorded on the blockchain. NFTs have unique characteristics. They are scarce, they only have one owner, they are unique, transparent and interoperable.

What does the current NFT market look like?

There were $24.9 billion in NFT sales in 2021. I know that most people will associate NFTs with crypto. However, the two industries run parallel and although we have seen some bad actors damage the crypto markets, the NFT sector has remained strong. There are over 250k monthly active users on the largest NFT marketplace Opensea and weekly sales volume has increased from 100 in 2017 to 50,000 in 2022. Although large sales like Beeple's artwork make the headlines, the average sale from an NFT is $200.

Moving from Attention Economy to a Creator Economy

The attention economy is still very much alive today as social media platforms scramble for our attention. Economist Herbert Simon coined the term Attention Economy and believed that a wealth of information creates a poverty of attention. With this onslaught of information our attention becomes even more limited, valuable, and scarce. 

Businesses have been adopting models to capitalize on this, fueling attention led products, advertising and marketing strategies. Think about everytime you are interrupted from doing what you actually wanted to do online. Ad Networks like YouTube, Facebook and others greatly benefit from this scramble for attention. 

Today, with the introduction of NFTs and creator led economies, there is a new way for brands to engage with their existing and future communities. The users can essentially become part of the brand building process. This creator first economy is allowing artists, musicians, film makers and all creators to determine their own paths of distribution. Instead of advertising models, each project starts by putting the creators and community first.

The interactions we have with online platforms and content in general changes value. Before NFTs creators had very little in terms of true digital ownership. NFTs are turning fans from spectators into investors. They are turning users into a community. They are blurring the lines between creators and buyers. A blended model of behavior has been born for all digital consumers.

Future use cases of NFTs

For this section of the presentation I am going to speak from my experience working with various NFT projects and writing about NFT projects. Some are complete, others are ongoing and some are still in development. The important thing to remember is that NFTs are unique digital assets that can be traded in the future.

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Tracking some of the biggest problems facing society

Most recently, this was evident at COP27 when Digital Art 4 Climate presented there ambitious project that drove climate change awareness using NFTs. Blockchain technology is renowned for it's transparency. Providing easy access to data, ownership and changing conditions are three critical components when devising future solutions to the climate crisis. 

Art & Collectibles

This is by far the most popular use of NFTs today. Artists and collectors are closer than ever as NFTs eliminate the need for as may intermediaries and allow opportunities for all artists to showcase unique styles.  

From 3D animation or photography, all forms of Art are now being sold to NFT collectors on various Web3 marketplace. Some of the most popular marketplaces include Opensea, Foundation, Objkt, Mintbase and Superrare.

Gaming

The world of gaming has not embraced NFTs but has paved the path to a new form of blockchain gaming. The mergence of the two strands of gaming are only beginning to be explored by some of the leading Web3 games. Although traditional gamers are opposed to the transactional nature of some Web3 games, they are starting to understand the opportunities for creation, innovation and scale from within these unique gaming communities. Games like Alien Worlds, Upland, Splinterlands and others are providing there players with unrivalled access to huge treasuries. 

Fashion & Wearables

Fashion is an obvious use case and one which I referred to earlier. Often, the only way to visually explain the value of NFTs is to connect them to the impact on the real world. Decreasing the dependance on fast fashion is a cause worth exploring with this NFT use case. With the introduction of wearable NFTs fashion has become intrinsically linked with the time we spend in the metaverse. Furthermore, by dressing an avatar the user is not wasting any natural materials and may even prevent unnecessary purchases of unused physical items.

Real Estate

If you have ever went through the process of applying for a mortgage, buying a house or even renting a property you will know the amount of paper work involved. Today, it is logical to automate most of these processes but the tracking needs to be guaranteed, consistent and stored in a logical manner. Projects like Bricktrade in the UK and Propy in the US are exploring various ways to use NFTs and blockchain technology to improve the real estate industry.

Loyalty Programmes

High profile brands like Starbucks, Gucci and Nike have launched NFT collection to both enhance there current loyalty programmes and tap into new audience with creative brand awareness campaigns. It is clear that consumers today are greener and more woke than ever. Brands have to pivot and showcase how they are aligned with these values. 

Why are brands using NFTs?

There are four main reasons that brands are currently using NFTs. Brand awareness, brand engagement, using NFTs as incentives and developing NFTs as innovation. The majority of brands realise the opportunities offered via NFTs and understand that they will be intrinsically linked with the future of the Metaverse which is estimated to be over $1.3 trillion in value for 2030.

Conclusion

If the natural world around us is to flourish and be sustained for future generations then individuals, brands and organisations need to consider the impact of our consumer behavior. NFTs offer one way to transform how users engage with products and services today. From more accurately tracking changing landscapes to moving away from our reliance on fast fashion, digital assets can offer solutions to some of societies biggest issues. In addition they given us the opportunity to create a fun way to engage with the metaverse and interact with new communities in online environments. 

It is no longer a matter of when but how organisations and individuals are going to use NFTs and the metaverse to expand their lives, habits and behaviors.