History tends to repeat itself, and it may have done so once again! – New money. Bitcoin Gatsbys. And, crypto markets are reaching record highs. After a hundred years, it’s almost like we’re living in another yet digital run of the Roaring Twenties.
Along with it is a newfound fascination for “jazz” art. Starting in 2021, emerging NFT technology swept the art and video game industries by storm. News outlets and social media headlined the big question everyone’s asking: “What are NFTs?”
An NFT is basically a digital ID of any asset, virtual or physical. Got a file you want an ID on? A photo? A video? You can make AKA mint an NFT for it.
People use these digital IDs to verify the ownership and authenticity of the asset. That's why it became super popular in art because it verifies (1) who owns the million-dollar artwork, and (2) if it is an original. But, they are not limited entirely to that since they can also store data on the item it IDs, making them perfect for many B2B applications.
Over the last two years, non-fungible tokens or NFTs became one of the most talked about topics of the 21st century. Since Jan 2021, ownership, sales, and familiarity with digital tokens have been on an upward trend until mid-2022. In just a year, 6 out of 10 Americans already know about NFTs. Digital token holders have also doubled to over 9 million. And, people have already spent USD 2.7 billion minting new ones in the first half of 2022.
Although it's not trending as it was since then. Many say the hype has died out already…
But with more than 16 million people saying they might buy an NFT in the next 12 months, and more and more companies using digital tokens. Can it be too sure to say the hype is gone?
Maybe, and maybe NFTs are really more than just a "hype”. Its growing potential and benefits in the B2B space say otherwise.
Let's find out what role NFTs will play in the B2B space this 2023. And, how will it change its growth trajectory in the next ten years?
B2B NFT Trends 2023
Digital tokenization unlocked new markets in almost every industry. There's a reason why experts think that NFTs won't be going away anytime soon.
Its current downward trend can be taken more as it matures or stabilises into mainstream use. Not to mention, current economic and political events may have pushed it down further than it should be.
In a report by Cointelegraph, the NFT market might grow to over USD 230 billion by 2030. Looking at the technology more closely, it definitely has huge room for growth and will continue to change the real-world and digital economies alike in 2023.
Industry giants such as Mastercard, Nike, McDonald's, and Coca-Cola are among the first to jump on the bandwagon. It's unlikely for global companies who have so much to lose and are highly strategic with their plans to adopt a "dying" technology.
One of the most prominent uses of NFTs right now is in marketing and boosting brand awareness.
Because of their inherent uniqueness and promise of being rare, companies bank on NFTs to capture their audience's attention. From regular customers to a more involved younger audience and a rising number of blockchain and web3 users.
Digital tokens are also extremely flexible at adopting almost any idea or concept. No matter how unconventional. In fact, it's become even more beginner-friendly and easier to launch a B2B NFT strategy.
NFTs are an excellent way for businesses to boost and incentivize brand engagement, customer loyalty, and purchases.
They can be used to replace and improve traditional assets such as membership cards, tickets, and giveaways. In the process, they also help brands cultivate customer relationships and turn them into a loyal community.
Including loyalty programs, subscriptions, and exclusive experiences built around these communities.
Businesses are gifting their customers exclusive digital collectables for early, repeat, and bulk orders as well as event participation.
Many brands, whether they are aware of it or not, are taking advantage of reciprocity or the feeling of getting something in return with NFTs.
On top of the product or service they’ve purchased, customers or users get the sense they're getting more than their money's worth.
Digital tokenization goes beyond niche marketing. Utility NFTs will be the next trending use case for digital assets this 2023 and the next decade.
The lack of practical functionality is the primary recurring concern for many of those doubtful of the NFT industry. Even some of those in the crypto space themselves doubt its potential.
One of the biggest reasons why many don't understand its potential is because of the misconception NFTs are all just digital art and not the technology that it is.
In reality, NFT technology goes beyond that, especially in B2B.
Digital tokenisation can make tracking products across businesses more transparent and efficient. By assigning digital "twin" identities to products, partners and interacting businesses can exchange product data more efficiently but at the same time, restrict specific data access.
NFTs are also interoperable meaning businesses will no longer need direct access to another business' system to understand where the products are in the process. Reducing the risk of misunderstanding, conflicts, and delays in communication for any two businesses.
On top of that, digital tokens can open fresh sources of revenue for subsequent resales made by other businesses besides the producer through royalties. Brands like Gucci and Adidas are taking advantage of this idea in their B2B NFT collaborations.
They can protect ownership of physical and digital assets as well. And, authenticate business documents both exchanged and cross-checked by more than two parties such as invoices, orders, and registrations.
NFT technology is also promising in data-abundant spaces such as finance and healthcare. Because it can heighten data security and make sharing data easier because of the blockchain's unchangeable nature.
Although because of the sensitivity of data in these industries, there will be a need for legalisation and regulation.
A good example of this use case is the idea of centralised electronic health records to solve healthcare's million-dollar data issue.
No Longer Showing Off
NFT's digital art phase is more like the technology showing off what it can do. But, not "only what it can do."
Its most impactful applications are taking place on a much larger scale and yet to be seen by the public eye.
Behind the scenes, digital tokenization is transforming B2B transactions.
Although seemingly hidden, it is actually giving businesses a higher level of transparency.
Because they are built on the blockchain, digital tokenized assets give companies the opportunity to easily check transactions and processes while still limiting access to more confidential information.
That's one of the reasons why entire industries are integrating blockchain and NFT technology in their business, especially manufacturing and logistics companies.
With digital IDs, supply chains can give digital identities to their products and make it easy to authenticate them once it reaches customers.
As a result, it decreases the risk and number of counterfeit products, especially in food, pharmaceuticals, and luxury goods.
Shipping all over the world will also be much faster and transparent with NFTs able to track shipments down to every individual package.
NFTs Are Here To Stay
Trends come and go, and so will NFT’s digital art phase. But as a technology, NFTs are not going anywhere.
Current issues around the globe and crypto winter might have raised doubts about digital tokenization and web3.
Yet, as more and more companies get involved. The year 2023 will see more brands taking their share of the web3 and NFT market.
Multinational corporations to small business startups are starting to see the tech’s countless opportunities beyond digital art.
Governments and authorities are also looking into regulating the crypto market, fostering public trust and reducing the risk of fraudulent activity.
Eventually, NFTs will be a mainstream commodity. As ridiculous as this might sound, the emerging technology is almost like a teenager in their “all fun and games” phase.
Right now, it is starting to mature from art stunts to an energetic force ready to take on real-world applications.
In this new digital era, digital tokens will start replacing physical assets that function better digitally and improve current B2B systems and practices.
So, it’s not really a question of “will NFTs survive?” It’s more of a “how long will it take for it to get there?”
Regardless, it won’t be very long before we see it become mainstream.
Today, it’s a hot trend. Tomorrow, a must-have.
Explore more B2B trends in the web3 and NFT space. Send us a message to discover how to scale your brand with digital IDs this 2023.