Digital goods: business use cases
Digital goods or NFTs offer a set of technology tools which can serve as very effective “digital glue”, whether connecting the phyical world and the virtual one or simply making life easier within our own beloved meatspace. Their application is, literally, limited only by our imagination.
Many of the following business use cases are related. For example, authentication of limited editions is in fact a sub-category of proof of authenticity, while a programme of collectible items will draw equally on their uniqueness and provable authenticity, and so on. This in itself demonstrates how NFT technology can be used to act as digital glue, connecting people and objects, and locations, and experiences to build layers of value across different aspects of human activity.
It is easy to imagine numerous cases where authenticity, utility and individual attention are combined as key features of entirely new products and services, or new layers of value added to existing ones. This will become particularly important when the items in question exist only, or primarily, in the digital space.
Fanbuilders: Tickets with built-in ability to build up a community
Digital goods as tickets can combine getting access to the gig itself with additional products or experiences. They are also interesting for their ongoing collectible value, both sentimental and, sometimes, monetary.
A key point to keep in mind is that solving for one issue often solves for other, related ones. In this case, an NFT which provides proof of authenticity of a ticket does, in addition, turn into a unique and personalised keepsake, which may be used by the artist to build community and offer special perks to its members.
A paper ticket to a great concert you attended a long time ago is a memento but if you’d lost that ticket before the gig, or someone had “borrowed” it, you could not have got in. A ticket based on a digital collectible would solve that problem, as it would not be a piece of paper but an NFT residing in your digital wallet. Having the ticket on your phone, say, would of course mean that you would have a souvenir to keep, except one that has very practical value, instead of just being a piece of paper that keep stuck in a CD case.
How? Well, it would be wise for the artist or the promoter to make sure that the souvenir would be a starting point for a long term relationship with you, the fan who had purchased it – as opposed to being a single point of interaction. It can contain extra goodies like secret links to additional unreleased music or an ability to interact with the artist somehow.
“Super Fans”, people who love an artist or a band and feel like their music or performance enriches their lives, have existed for a long time, except now it is possible to reward them for their continuing interest and loyalty. The “digital glue” of NFTs makes it not just easy but also entirely logical to extend the usefulness of an event ticket beyond the date of the concert. (Naturally, while we are using the example of music and performance, such extensions are also natural for most other kinds of events where an ongoing relationship with an attendee is of value both to them and to the promoter or organiser.)
Collectibles and “connectibles”
Who collects things? Why do you do it? Of course, you love it. Collecting things, at its most fundamental level, serves to validate our existence in the timeline of history. These objects say “I have been there, and here’s proof” or “I understand this subject, and here’s proof”.
Collectibles are also a way to signal that you belong to a particular community. You can signal for your own benefit, or the benefit of the community, or both. Stamp collecting, numismatics, collecting of watches, antique toys, corkscrews (and corks) and virtually all other ephemera of our civilisation all have many thousands of passionates engaged in their favourite pursuit. Legions of collectors spend untold amounts of time, energy and money on not just enlarging the collections themselves but also on educating themselves in the ins and outs of their particular passion.
Digital goods have been very much making inroads into this field. Did you collect sports cards as a kid? Their best known current incarnation is the NBA Top Shot collection of NFTs, which has generated over a billion dollars in trades since January 2021. How about bubble gum comics (or just ordinary, book-sized comics)? Maybe beer coasters that a parent had brought from business trips? Postcards? Military insignia of a particular age or country? If someone is not working on modern versions of those, powered by intelligently applied NFT technology, we would be most surprised. Oh, wait. We are! (Our name is something of a give away…)
Collecting brings people together around activities fundamental to our social lives – contact with like-minded individuals and trading to build up significant collection and advance one’s standing within that community. What activities and interests particularly lend themselves to creating new types of collectibles, to build communities around sports, entertainment or other hobbies? Which brands may find it valuable to support such activities as long-term customer development programmes?
Disaster relief and philanthropy
Our natural instinct to help others in need comes out shining every time people end up in serious danger or deep trouble, even in remote places of which we do not normally may think. Whether the disaster is natural or man-made it doesn’t really matter – significant numbers of people step up to help. Speed is usually of the essence in such instances and digital good technology is ideally suited to jump through such hoops, as it offers flexible means of building effective fundraising programmes quickly, and the funds can be directed get to where they’re needed pretty much immediately, with very little cost. NFTs are already being used to raise funds for victims of natural disasters and populations displaced by war.
Relief organisations need effective ways to say thank you, and rewarding the givers appropriately is always a subject of much discussion since a/ givers love to be rewarded, b/ it costs money to devise reward programmes. If you send a donation you may get a nice letter, or if that donation is large enough you get a plaque but all those things actually cost money that could, should in reality be going towards the intended cause. Plus we live increasingly in the digital and that is where we cant to put the acknowledgement, for all to see – in the right way, unobtrusively but visibly, a sort of a visible reward.
Purchasing an NFT as part of a disaster relief programme, or indeed any charity drive, immediately gives the purchaser a “digital thank you” that is personal to them. Certainly an interesting and inexpensive way of rewarding the giver, and one which, of course, carries with it the ability to interact with them further in the future.
Incentives & rewards
Who doesn’t love perks? Thing is, most perks, most of the time are issued to groups be they employees, fans or Kickstarter benefactors. Even if you get sent a particular perk individually, it is still not unique to you. Well, with the digital glue you can get a unique item recognising you as employee of the month, say. Not just a boring plaque with a boring photo. You are given something that is uniquely intended for you – it’s numbered, personalised, and you can take it anywhere and show it off to people if you so desire.
Then again, before you become an employee of the month you need to become an employee, and we know what the recruitment climate is like out there right now. A little NFT sign-on bonus, where the NFT grows in value over time, could be developed into an interesting incentive scheme.
And as for loyalty programmes, ones that reach across verticals to really deliver value to participants, with built-in ability to trade loyalty points for ones they actually could use, with a purpose-built global trade and exchange platform?
Limited editions tied into the real world
A constant pain for galleries and artists is proving that when they say there are only fifty of a given piece of work in a given size people just need to believe them. It is no surprise the galleries and artists are experimenting with methods of connecting an NFT “limited edition certificate” to individual works. Blockchain-based solutions have existed for a while already; NFTs are the next logical step towards securing peace of mind for art collectors. Naturally, another layer of value is created when a limited edition print carries a mark which signifies that it is certified with an associated NFT, and that is making the work less attractive to a thief, and traceable for the rightful owner and the police.
Tying an individual art piece into a real world context extends its usefulness beyond its inherent artistic or aesthetic value. For example, we are currently considering a project which involves creating physical limited edition collectibles for music fans. With each collectible would come an NFT carrying within it a set of additional benefits, personal to the holder, such as access to special events.
Of course, we could just produce NFC cards that open doors to events, and send those with the collectible. But have you tried to reprogram a thousand NFC cards that are in possession of people across the country and around the world? It could be done, in theory, but the expense would not be easily approved by any marketing department and, more importantly really, it would be a massive pain for the members, instead of being delightful, which is where we’re aiming. With digital programmable goods, it is fast and effective to add another level of reward if we wish, like access to another event.
Certification of authenticity
There are, of course, many products which would benefit from a digital certificate of authenticity, as an added layer of security and peace offend for the purchasers. For instance, there is a profitable market in knockoff wine, just as much as in other knockoff luxury products. A 1982 Château Lafite, a particularly lovely drop, can cost upwards of $5000 for a bottle. Lafite is one of the most frequently counterfeited wines on Earth but it’s not just expensive wine that is knocked off. Experts believe that over half of even moderately pricey wines (over $35 per bottle) sold in some markets do not contain what it says on the label.
Purchasers and consumers of valuable products often like to “make an occasion” of it. Drinking a high-end bottle of wine with a selected group of people is an established social custom. Is it so difficult to imagine people burning the NFT attached to the given bottle as they uncork it? Not really, since people like to add new customs and layers of meaning to their social interaction.
Designing systems which would make it expensive, and thus uneconomical, for the counterfeiters to ply their trade is where substantial opportunities lie, and we believe that NFT technology will serve as a key building block of such systems. Upmarket fashion accessories, furniture, designer bikes, funky sneakers or anything valuable can benefit from such authentication systems, and an interesting aspect of this, which is in fact a separate use case in and of itself, is that while these objects exist in the real world, their digital doubles can dwell in the digital realm.