A lot of the hype recently around NFTs and blockchain has almost exclusively centered around digital content creators. NFTs have created a paradigm shift for digital artists, who can now sell digital copies through the block chain.
There has been an area of blockchain that’s been vastly overlooked by the common man though… the corporate world.
At a casual dinner, I caught up with a friend working in crypto. He mentioned how big name brands are going to be utilizing NFTs in a strategic way for campaigning and customer experience. At the end of the dinner, I was convinced that corporate brands that take part of the blockchain revolution may fare better and gain a competitive advantage in the long run.
Especially because ABI reported that blockchain revenues are to hit $10.6 billion by 2023, it’s worth the time to understand how blockchain is going to be used by big names companies.
So, here’s how companies are going to take advantage of the blockchain craze.
The most obvious one is increasing brand visibility. Whether its Adidas’ Metaverse NFT Collection or Taco Bells’ NFT GIFs, companies can take part in the craze around digital art. It’s a pretty easy way to increase community engagement while making a profit.
Launching a collection is a great way to bring attention to the brand and stand out among competitors. That’s why so many companies are trying to be the first by launching their own collection as soon as possible. Because most people that are loyal to big name brands are willing to pay the price for NFTs, it’s an easy win-win and strategic marketing move for the brand.
As a previous intern at a supply chain company, I can tell you first-hand that authenticating products and their origin is an imperative step in the logistics process. But it’s also painful. As products move from one area to another, they need to be authenticated at various points in order to verify origins and the quality of the product. Not doing so accurately usually leads to huge losses.
NFTs are immutable and cannot be destroyed, which provides the best chance to trace the origins of products. As one example, let’s take a luxury brand like Gucci. There are plenty of Gucci counterfeits in the marketplace, and customers may want to make sure they are buying a verified Gucci product. An NFT would be able to authenticate the origin of the product, based on tracking of the materials from the source to the product bought.
What’s even better? The NFT can verify that the product was made using sustainable methods and didn’t employ child labor.
A smart contract starts with some agreement between the owner and the buyer and is stored on the blockchain. The great thing about smart contracts is that they are self-executing, which means that they can self verify that the terms have been met. All without an intermediary!
This would be a fool proof way to guard buyers and sellers. This would significantly improve contract management, and the amount of invoices that companies would have to chase customers for would be significantly reduced. Especially for big name brands dealing with billions of dollars of sales and large amounts in receivables, smart contracts would solve a large amount of invoicing headaches.
Some investors believe that investing in companies that use blockchain (especially early on) may be lucrative in the long term because of increased revenue potential. Adidas, itself, made $23 million from their first NFT drop. Most also believe the potential benefits are not just limited to companies using blockchain to drive customer engagement and branding. Companies that utilize the vast functions of blockchain (such as for authenticity and/or branding) could see revenue growth.
So, the reasons that some investors start looking at companies that are implementing block chains include:
Important information that investors normally gather before determining whether public blockchain companies are a good investment include…
It is also possible to buy an exchange-traded fund (ETF) that specifically invests in shares of companies with exposure to blockchain.
Either way, it is wise for investors to be informed about potential use cases for block chain and which companies are implementing it.
This article was originally published on my blog www.omniareport.com. More information about money and investing can be found here.
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Blogger at www.omniareport.com. Current Med Student & Occasional Finance Nerd. Passionate about Health, Fitness, and Business.
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