Have you heard people rave about non-fungible tokens (NFTs)? Wondering how they can be used for business?
In this article, you'll discover a deep dive into the world of digital goods and what you need to know to use them in your business.
How NFTs Can Help You Build Community
NFTs are making a huge impact in the business world. We haven't seen this large an impact or this level of excitement about an innovation since the advent of social media. It feels like the very early days of Facebook or Twitter.
Primarily, NFTs allow businesses to create digital proof of ownership, attendance, and even transference to different experiences they offer their customers.
Additionally, NFTs are transparent and instant. The smart contract coded into the token can't be edited or altered, which means the business that created that token will always see the return whenever that token is sold. If people purchase an NFT and later decide to transfer that NFT to a third party, the business will still receive a share of the transaction as written into the smart contract.
The business can still earn revenue just based on the fact that the experience it created for its audience is being accessed and enjoyed, even if that access wasn't purchased directly through one of its sales funnels.
With NFTs, businesses are also offering their audience a chance to buy into their community. This is a much deeper connection than people who simply purchase a subscription. Buying into a community essentially gives that member partial ownership of that community. The members help determine the value of the community based on how many tokens they hold, as well as their asking price when they sell off their tokens after they no longer need access.
Whether an NFT grants people access to a community on Discord, an event, a course, or a coach's calendar for special coaching opportunities, that access will be granted automatically and within a couple of minutes of purchase. So people will be able to reap the benefits of being an NFT holder faster than anything that requires manual verifications and checks or emails sent back and forth.
You also don't have to worry about technical issues such as when an email is accidentally marked as spam or doesn't get delivered for a variety of other reasons. The proof of their access is visible on the blockchain immediately, allowing immediate access.
How NFT Airdrops Work
If you use NFTs to reward your community and grant them rewards for participating in your community, those rewards are done through something called airdrops.
An airdrop is a transaction in which you send an NFT from your portfolio to someone else's portfolio.
So, for example, you could have one NFT for your community and a separate NFT for attendance at your events. Every once in a while, you could decide to move your attendance tokens over to your community's portfolios, along with whatever new benefit is coded into the smart contract of those attendance tokens.
You can also send more of your community tokens to token holders. If someone is holding 50 of your community NFTs, and you choose to reward them with another 10 tokens, you simply move them over using an airdrop.
How Proof of Attendance Works
The proof of attendance protocol, sometimes referred to as POAP, is based on the idea that you could give out NFTs based on limited-time concepts and have, possibly, a secret word to access them.
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For example, TIME magazine does an amazing job in their TIMEPieces Discord community sessions. They'll give out a secret word, and during that same timeframe, within about an hour, you can go to their website and put in the word. Doing so will grant you a special POAP.
This special NFT is limited-edition and limited-time, and can only be acquired through this secret word given out during the session. And it can grant you access to more exclusive experiences.
Find Out More About the Culture and Communities Built Around NFTs
If you're thinking about creating NFTs and bringing them into your strategy, start by collecting the tokens from other creators. This will allow you to get into the culture and start to understand the impact and the community that's growing around NFTs.
Just as on social media, the culture of any platform is largely written and determined by the earliest adopters. The same is true for NFTs. A large part of the culture is being determined and you have a chance to see the direction it's headed. Then, when you're ready, you can decide how you can impact and support your own community with an NFT.
If you're looking for examples to use as inspiration for your own NFTs, check out Twitter. The NFT community has really latched onto Twitter, and especially Twitter Spaces. This makes sense, given Twitter's longstanding reputation as a place where you can chat in real time on just about any topic. At any time, you can search for #NFTCommunity to find ongoing conversations.
You can also find and join communities on Discord.
One note of caution: As with email and SMS, don't click links in any direct messages you receive from people you don't know on Twitter or Discord. These messages sometimes contain links to well-designed sites that try to convince you to purchase a fake NFT through them, connect their wallet, or give them your seed phrase. Under no circumstances should you click on any links you don't find directly in the Twitter bio or in Discord's Important Links channel of the community you're in.
You can also explore NFTs on a site like OpenSea. However, rather than do a keyword search, start by exploring Categories (Art, Collectibles, Music, etc.) and Stats (Rankings and Activity).
As you learn more about NFTs, think about ways you could use them to bring your community closer. How can you provide value to your community through NFTs? How can you integrate your NFT into everything you already do?
You don't have to worry about abandoning any of your current projects or switching things around. You can, instead, use NFTs to strengthen or even streamline some of your current strategies.
Business Use Cases for NFTs
We usually talk about use cases for NFTs in terms of things like access to events or communities. And that does currently make up the bulk of NFTs for businesses.
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Your NFTs can grant your audience access to a private, exclusive community with access to you or your services or products. It can also be used for tickets to events, book clubs, or special access to your calendar or booking program to schedule a special coaching session with you. And there are a few other uses that would benefit both you as the business and your community as buyers.
One of the more immediately beneficial use cases for NFTs is to promote social good that you value. Because the smart contracts coded into NFTs can include a split of any revenue ongoing in any number of ways, you can choose any charity or notable cause you want to support, and a portion of every sale and resale of that NFT will go to that.
And again, this isn't something that can be overwritten or changed. If someone decides that they no longer need access to your coaching community or book club, and they decide to sell the NFT that grants them access, they can't change the terms of that smart contract. The charity or cause you coded into that smart contract is still going to get its cut of the sale, as are you and any other beneficiary you coded into it. It can't get redirected, changed, or overwritten.
Another use case would be proof of attendance. Proof of attendance is an interesting use in that it's a way of incentivizing and rewarding your community for participating in the community. For example, you can send or gift people coins for attending a certain event. And then once they receive five of those attendance tokens, they receive access to something even greater.
It doesn't even have to be an event with tickets. Imagine hosting a podcast, and somewhere during the episode, you give your audience a secret word. Listeners can then go to your website to type in that secret word, and the first hundred or so people to do that are rewarded with an attendance token. After they've listened to so many podcast episodes and provided you with so many secret words, collecting attendance tokens along the way, you can grant them extra NFTs, more exclusive content not available to anyone else, or anything you'd like.
Businesses can also use NFTs as rewards for their current offerings. You can grant NFTs when people sign up for your newsletter, sign up for your course, attend your live group coaching calls, and just about anything else that you're already doing in your business.
As we alluded to earlier, you can create NFTs as a way to bring your audience in as co-creators of your community. As buyers of your NFTs, they'll help create the value of your community and the NFT attached to it.
Where NFTs Are Headed in the Future
Given the opportunities presented by NFTs, in the not-so-distant future, NFTs are going to become integrated into nearly all aspects of our lives. In return, NFTs are going to provide more purchasing power to the buyers while also providing businesses with added security and benefits.
For example, imagine if a fashion designer released an NFT for one of their designer bags. When you purchased that bag, you'd receive the NFT into your wallet as digital proof of ownership of that authentic bag. Later, should you ever decide to sell the bag, the buyer would no longer have to worry about whether that bag is authentic. The NFT is transparent on the blockchain so they could confirm the authenticity before making the purchase.
Car manufacturers can also benefit from NFTs. Imagine creating an NFT to go with each line of cars they manufacture and sell. Because the manufacturer would receive a percentage of the resale from those cars, that would encourage them to make it easy for people to do proper maintenance of those cars to help boost their resale value. And again, buyers would be able to see everything that's been done on the car thanks to the blockchain.
While NFTs are still largely talked about within the creative entrepreneurial, content creation, and community building spaces, the truth is that NFTs hold opportunities for nearly all businesses to grow and expand beyond their store walls and beyond their social media platforms. This is a chance to connect with your audience in a new way that will lift your audience and protect and lift your own value as well.
Other Notes From This Episode
- Learn more about VeeFriends, Ethereum, Solana, Rally, Beeple, TIMEPieces, Shaquille O'Neal Notable NFTs, CryptoDads, Bored Ape Yacht Club NFTs, OpenSea, ICY Tools, rarity.tools, and inBetweeners.
- Connect with Michael Stelzner at @Stelzner on Instagram.
- Watch the interviews on the Crypto Business YouTube channel.
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This article is sourced from the Crypto Business podcast. Listen or subscribe below.
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