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Apart from producing their own digital collectibles, large businesses are also acquiring popular nonfungible tokens (NFTs) in response to the growing popularity of nonfungible tokens.
The nonfungible token (NFT) area is likely one of the most well-known parts of cryptocurrency and blockchain technology. Indeed, NFTs are frequently discussed, eliciting great interest both inside and outside the business.
Such is the growing appeal of NFTs outside the crypto space that major brands like Visa and Budweiser are now acquiring popular items from popular collections. These moves are different from the usual corporate interactions with nonfungible tokens that often involve creating their own digital goods.
As is often the case with crypto and blockchain matters, significant adoption from major legacy players triggers a FOMO-driven frenzy. Several NFT collections have seen massive price floor raises as other collectors hop into the trend.
Beyond the current hype, some crypto proponents say NFTs offer more than memetic appeal and can be the “killer app” for Web 3.0. If such assertions prove true, then nonfungible tokens could be a conduit for gamified investments in the emerging decentralized web, becoming the focal point of the next iteration of the internet similar to how e-commerce and social media have dominated the current cyberspace.
Visa buys Crypto Punk
On Aug. 23, Visa announced that it had purchased Crypto Punk #7610 for 49.50 Ether (ETH) — about $149,939 at the time of writing. The news arguably caused a stir in the crypto space and even beyond with several CryptoPunks getting snapped up by wealthy buyers keen to get in on the action.
CryptoPunks is one of the “original” nonfungible tokens (NFTs) from 2017, long before the current frenzy surrounding nonfungible tokens. Larva Labs created the collection in June 2017 and it has 10,000 pixelated images measuring 24-by-24 pixels and placed in the 8-bit pixel art style.
Punks have been credited as being the inspiration for the ERC-721 token standard for NFTs, as well as the forerunner of blockchain-based generative art.
Crypto Punks were initially provided for free to interested collectors. With the popularity of NFTs increasing since 2020, the vintage (at least by nonfungible token standards) collection has become increasingly valuable.
According to the Larva Labs website, the cheapest CryptoPunk available for purchase is priced at 119 ETH (about $400,000). Several owners reportedly delisted their Punks in the wake of the Visa purchase amid a wave of fresh interest following the news.
At the time of writing, the 30-day trading volume for CryptoPunks had surpassed $500 million. The trading activity of CryptoPunks accounts for more than half of the NFT volume observed in August.
Chinese internet barons have also gotten on board, purchasing CryptoPunks for exorbitant sums of money.
Premium NFTs like CryptoPunks appear to have become a status symbol in the same way that the Lamborghini craze was in the early days of crypto. Celebrities from both inside and outside the crypto community are increasingly using popular NFTs as profile images on their social media platforms.
NFT adoption and corporate brand management
Detailing the reason for its CryptoPunks purchase, Visa’s crypto chief Cuy Sheffield stated, “To help our clients and partners participate, we need a first-hand understanding of the infrastructure requirements for a global brand to purchase, store, and leverage an NFT.” While corporate NFT adoption is not a new phenomenon, actually buying an NFT rather than launching a digital collection based on a company’s offerings makes Visa’s move significantly novel.
Jesse Johnson, founder and chief operating officer of Aavegotchi creator Pixelcraft Studios, told Cointelegraph that Visa’s foray into the NFT space is only “the tip of the iceberg.”
“The market is going to increasingly see brands, organizations and businesses embrace NFTs over the coming months and years. It will start as a new way to connect with customers but eventually evolve entire industries.”
According to Johnson, the popularity of NFTs will force entire industries to rethink and realign their incentives with their customers.
According to Christian Ferri, co-founder and CEO of NFTPro, a company that provides NFT market advise to worldwide brands such as Prada and Lamborghini, corporate interest in nonfungible tokens include investments, marketing, and creating more brand engagement among younger generations.
Ferri told Cointelegraph that the present excitement surrounding pricey NFT artefacts will fade, stating:
“As the market turns, most if not all NFTs not tied to a high-status, the high-equity name will drop in value considerably, if not disappear. This dynamic will reset the attention on a new scale of digital worth, where NFT buyers will seek and demand digital authentic products from known names that, on wide consensus, carry a higher, more predictable weight.”
There is already growing NFT interest in the corporate world with several major brands looking to establish a presence in the market. Social media giant Facebook has stated that NFTs will be part of its digital asset wallet service Novi.
Reports from China say Bytedance, the parent company of the popular social media platform TikTok might also be mulling an NFT foray. Bytedance founder Zhang Yiming reportedly stated the company’s planned NFT venture in a WeChat NFT group on Aug. 26.
NFTs, gamified investments and Web 3.0
With NFTs becoming the conduit for digital ownership, some commentators have begun to highlight the gamified investment potential of nonfungible tokens, especially within the context of the emerging decentralized web architecture. In some ways, NFTs are perhaps shaping up to embody the transformation brought on by e-commerce and social media in today’s cyberspace.
“NFTs will be the backbone for the third wave of trade, or virtual commerce,” according to Ferris. NFTs are poised to permeate various layers of the expanding digital matrix, from digital avatars to virtual and augmented reality (VR/AR), gaming, and metaverses.
This rising penetration also raises concerns regarding potential connections with important digital pillars such as e-commerce and social media. Indeed, several companies are already planning to build infrastructure at the convergence of NFTs and social media, gaming, and e-commerce, among other things.
“NFTs are empowering real ownership of digital items that can often be used as utilities,” Johnson told Cointelegraph, adding:
“Businesses can utilize NFTs for many different uses, but the biggest of all is gaming. The ‘play-to-earn’ aspect of NFTs will be revolutionary in the coming years. Through this transitioning from static digital collectibles to tokens, real utility is created and will lead to the next generation of NFTs, especially as more companies and corporations get involved.”
Indeed, play-to-earn gaming has become a significant component of the NFT industry, with titles like as Axie Infinity capturing the attention of players all around the world. The increasing popularity of play-to-earn NFT games demonstrates the potential that exists at the convergence of gaming, blockchain, and the virtual economy.
Jenny Q. Ta, founder of blockchain-based social media site CoinLinked, stated earlier this month that NFTs could be the missing link in the drive to disintermediate the internet. According to Ta, NFTs will facilitate content ownership in Web 3.0, resulting in the creation of a whole new virtual economy.
Ta’s CoinLinked was recently acquired by HODL Assets is looking to launch its NFT marketplace service that will also combine e-commerce and social media features.