Non-fungible tokens (NFTs) took the crypto world by storm in 2021, and now every major brand and marketing guru wants in. This isn’t necessarily a bad thing, as it might help push mainstream adoption of crypto. In an interview with Blockworks, Yorke Rhodes, Microsoft’s director of digital transformation, blockchain, and cloud supply chain, stated.
“You see literally everybody in marketing wanting to do something within NFTs,” he said.
Crypto assets have “pretty good” recognition by anybody who’s an asset investor, Rhodes said. “Crypto is an obvious foundation for digital assets and NFTs are digital assets,” he said.
On the one hand, he believes that practically every large bank will become a custodian of digital assets in some capacity. NFTs, on the other hand, represent an intriguing possibility for brand marketers, according to Rhodes.
NFTs saw a growth of 328% in transactions during the first three quarters of 2021, according to a report by Brandessence Market Research and Consulting. “Growing entry of major players including Microsoft, Home Depot, Tesla, Whole Foods, Starbucks, and increasing appeal of tokenization through cryptocurrencies remain a key driver of growth,” the report said.
NFTs are most recognised for one-of-a-kind digital artworks that are confirmed using blockchain technology. These artworks can range from a digitally certified song to a screenshot of a tweet.
Nike filed a trademark application for “virtual goods” earlier this month, covering a wide range of products from footwear, clothing, and sports bags to art, toys, and accessories. These requirements imply that the firm is either attempting to advertise its products as virtual goods or non-fungible tokens (NFTs), or is attempting to prevent its products from becoming NFTs.
The idea is that NFTs will become fundamental to the developing concept of the metaverse, which Microsoft CEO Satya Nadella outlined earlier this month at a conference announcing Microsoft’s move into space.
The notion is that NFTs will become key to Microsoft CEO Satya Nadella’s emerging vision of the metaverse, which he detailed earlier this month at a conference announcing Microsoft’s entrance into space.
Separately, during the company’s fourth-quarter results call on Wednesday, Disney CEO Bob Chapek stated that the media conglomerate plans to enter the metaverse as well, consistent with its history of accepting technological innovation.
“Suffice it to say, our efforts to date are merely a prologue to a time when we’ll be able to connect the physical and digital worlds even more closely, allowing for storytelling without boundaries in our own Disney metaverse,” Chapek said.
While decentralized finance, or DeFi, is also a popular sector within the crypto industry, Rhodes said it’s harder for the public to grasp. “Then NFTs…brands can embrace them without really understanding too much about the tech,” he said.
Last week, Microsoft’s Rhodes stated that the industry has reached a tipping point and that the entire crypto ecosystem is only touching the surface of what NFTs are. As previously reported by Blockworks.
Rhodes expects to see NFTs at the top of the curve, where it currently resides, in the near future.
“Many brands will continue to ape in with their own version of an NFT, which in most cases is going to be a relatively conservative approach, right? As a first toe in the water,” he said. “Then as they learn more, they’ll start to realize there’s a lot more they can do with the technologies on the brand side,” he said.
Between now and next summer, Rhodes believes that people will begin to broaden their understanding of NFTs and what they can do with them beyond trading cards.
“I think you’ll start to see much more awareness in the market around what NFTs can be and how you might use those,” he said.