NFTs

NFTs are the biggest topic in the tech industry right now, as we discussed in Part 1 of our Ultimate Guide to NFTs series. In Part 2, we’ll go over some of the primary benefits and potential downsides of NFTs, as well as some opportunities for your small business to utilise them.

Pros and Cons of NFTs

‍Pros and Cons of NFTs

‍Pros

  • Solves the licensing issue by clearly identifying who owns each token.
  • Potential for profitable assets: NFTs can increase in value due to scarcity, providing owners with the future opportunity to benefit from their tokens.
  • Provides artists with better profits: NFTs give artists a chance to sell directly to consumers, cutting out a lot of fees that would typically have to be paid.

Cons

  • Uncertainty about value: At the moment, an NFT’s worth is completely defined by its aesthetic and sentimental value. This means that if you buy one, there is no current purpose for it that can improve your business or personal life other than knowing you own it. It’s hard to determine how much it’s worth as a long-term investment, so for now it’s all speculation. There’s a significant risk that the recent surge in popularity of NFTs has caused them to become overhyped. Be aware that investments made now may not deliver the returns you expect once the buzz subsides.
  • Environmental concerns: Blockchain technology has a significant environmental impact. Tokenizing digital files, like cryptocurrencies, necessitates a significant amount of processing power. The energy used to mine and run cryptocurrency systems via computers and servers, as well as cooling equipment, is comparable to one million transatlantic flights. As a result, increasing the use of NFTs will therefore increase the existing energy requirements of blockchain technology.
  • A significant issue is the security concerns raised with NFTs. While Ethereum can safeguard your copyrights and prevent others from copying your digital art, there have been reports of hackers taking them from other blockchain exchanges. It is very difficult to protect art in online form.

How to use NFTs in your startup

How should NFTs be used in my startup

‍Engage a larger audience with nfts

Individuals may be able to obtain digital copies of your products instead of the more expensive physical versions. This allows your customer base to grow and your business to expand. This could be useful when the digital ‘Metaverse’ becomes more prominent and companies look to transition their business to digital platforms.

To encourage consumers to participate with your brand, hold competitions with NFTs as prizes. This raises your company’s profile while also increasing interaction with the brand.

Create your own GIFs with nfts

If relevant to your business’ consumer base, creating your own gifs can be a great way to gain traction to your business. Not only are they unique to you, if they become popular then there is the opportunity to sell them as collectibles. However, this may not be a suitable option for a lot of businesses as it may not appeal to their TM and could be an inefficient use of capital and time.

Think to the future

It may look like they have no relevance to your business right now. But in fact the digital world is changing; NFTs are one of these aspects of said digital world that are here to stay for the foreseeable future. The virtual reality that some of the biggest companies in the world are developing may become the new internet. Therefore, it is worthwhile to make sure your business is adaptable to the digital world.

You don’t have to act right now and start investing in them or creating your own. However, it is worth making sure you have a clear understanding of them. Trying to identify avenues where your startup could potentially incorporate NFTs could bode well for its future.

NFTs explained

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