The NFT (non-fungible token) market has blown up in the last two years. From digital artists to celebrities, everyone is selling their works online—some for millions of dollars. For example, an artist named Beeple sold his digital artwork for a jaw-dropping $69.4 million. Later on, he sold another piece, this time for $29 million.
Artists are not the only ones hopping on the trend. Because of the huge payouts, businesses from startups to big brands like Taco Bell and Nike are exploring the commercial possibilities of NFTs.
The blockchain experts at Synapse Research Ltd. weigh in on the NFT craze and the business opportunities it presents. But first, a brief background of NFTs.
NFT vs. Cryptocurrency – How Are They Different?
Non-fungible tokens use the same blockchain technology as cryptocurrencies like Etherium and Bitcoin. However, cryptocurrency is “fungible,” meaning it can be traded for an item of the same value. Much like $20 retains its value even after it’s replaced with another $20 bill, a crypto coin holds the same value after it’s traded for another.
NFTs work differently. Each is encrypted with a distinct digital signature which means NFTs cannot be replaced or exchanged for an item of equal value. Hence, the term “non-fungible token.” Likewise, their non-fungibility makes it impossible to replicate or modify NFTs.
Banksys Love is in the Air
Banksys Love is in the Air
Banksy’s “Love is in the Air.
Take, for example, Banksy’s “Love is in the Air” artwork, which will be divided into and sold as 10,000 NFTs. Though part of a single art piece, each particle is valued differently and unexchangeable.
How Are NFTs Created?
NFTs are made through a process called “minting,” where a digital asset becomes part of a blockchain like Ethereum. Almost anything can be converted into an NFT, including:
- Photographs
- GIFs
- Virtual properties
- Metaverses
- Online games
- Collectibles
- Designer clothes
- Videos and sports highlights
- Art
NFTs are like digital collector’s items. Instead of purchasing a tangible product, the customer receives a digital file. Moreover, they don’t just earn a license to use the item—they gain full ownership over it.
How NFT Is Reshaping the E-Commerce Landscape
In 2021, the market size of NFTs reached a whopping $22 billion, a significant leap from $100 million in 2020. Its increasing value is a clear sign that entrepreneurs should explore the opportunities presented by these blockchain-based digital assets. Here are a few ways businesses can leverage non-fungible tokens:
Direct Buying and Selling of Items
Today, e-commerce platforms run on a centralized system that involves third-party authorities. This often presents problems in the distribution of commissions.
NFTs eliminate the need for intermediaries, enabling entrepreneurs to transact with potential customers directly.
Fast and Efficient Transactions
The NFT marketplace operates the same way as eBay, Amazon, or Etsy—users list their items on the open market for prospective buyers to see. Plus, setting up is not difficult. All you need is a digital wallet and Etherium for minting.
And, since trade requests and offers are processed in real-time, transactions are a breeze.
Eliminates Trade Barriers
International trading of goods often involves government-induced restrictions. With NFT, sellers don’t have to worry about these guidelines since all transactions are done virtually.
Enables Fractional Ownership
NFTs make fractional ownership of assets possible even for average income earners. Fractional ownership is the selling of shares to an asset to multiple parties. The shareholders hold equal benefits like income sharing, priority access, and usage rights.
Examples of NFT-Based Business Ideas
The versatility of NFTs presents endless opportunities for different kinds of businesses, not just art curators.
Look at Taco Bell, which sold 25 taco art NFTs to raise money for its foundation’s Live Más scholarship for youths. The digital items were sold out within 30 minutes, with the highest bid at $3,646.
Besides selling digital art, below are a few ways entrepreneurs can capitalize on NFTs:
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Launch a White Label Service for NFTs
White-labeling is a process where a company creates a product or service for a client who then rebrands it as their own. This practice is used by Shopify, where small business owners use the platform to resell their products.
The same concept can be used when developing NFT services. Instead of creating a platform from scratch[1] , entrepreneurs can work off ready-made NFT marketplaces. These white label NFT marketplaces can easily be customized to fit the client’s business requirements.
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Create an NFT Marketplace
All non-fungible token transactions are carried out in NFT marketplaces such as OpenSea, Atomic Hub, SuperRare, and Rarible. These platforms earn revenue from predetermined fees from each successful transaction carried out via the NFT shop.
For instance, Rarible, an NFT art gallery, charges a 2.5% commission in Ethereum for each sale conducted on the platform.
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Create an Online Course on NFTs
Despite its increasing popularity, there are only a handful of reliable online courses on NFTs. If you’re confident in your NFT knowledge, you can start a course on e-learning platforms like Udemy. Or, if you have the resources, launch your own platform or organize in-person lectures.
One of the most popular NFT courses on Udemy has 21,749 students. So, if a full course costs $94.77, you earn a sizable profit just by sharing your knowledge.
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Establish an NFT Forum
Creators and sellers need more platforms where they can openly discuss their ideas and connect with other NFT enthusiasts. Creating an NFT platform like Bitcointalk has the potential to generate huge revenues, especially when run with banner ads.
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Craft NFT Wearables
Only a few people have explored the NFT wearables niche. With little competition, it’s a great place to start an NFT venture, especially if you’re interested in fashion.
Eduardo Jaramillo transforms an Apple watch into a diamond studded pendant
For example, Eduardo Jaramillo, an American novice jeweler, transformed an Apple watch into a diamond-studded pendant that displays a user’s non-fungible assets.
Entrepreneurs can also create their own NFT wearable tech in the form of necklaces, keychains, bracelets, and other forms of accessories.
Start Growing Your NFT Empire
With few resources available, many entrepreneurs often struggle with launching their NFT businesses. At Synapse Research Ltd., we take away the frustration of starting NFT projects.
Whether you need expert advice or help with project management, our consultants are here to help. You can be confident that our NFT solutions will be customized to your project’s unique needs and your business goals.
Unlock the full potential of your NFT business. Reach out to us today to get a free consultation.