- “You see literally everybody in marketing wanting to do something within NFTs.”
- “Growing entry of major players including Microsoft, Home Depot, Tesla, Whole Foods, Starbucks, and increasing appeal of tokenization through crypto currencies remain a key driver of growth,” according to a report by Brandessence Market Research and Consulting
Non-fungible tokens (NFTs) have taken the crypto world by storm during 2021 and now every major brand and marketing specialist wants in, but this isn’t a bad thing — as it could help drive mainstream adoption of crypto, Yorke Rhodes, Microsoft’s director of digital transformation, blockchain and cloud supply chain, said in an interview with Blockworks.
“You see literally everybody in marketing wanting to do something within NFTs,” he said.
Crypto assets have “pretty good” recognition by anybody who’s an asset investor, Rhodes said. “Crypto is an obvious foundation for digital assets and NFTs are digital assets,” he said.
On one side, he predicts that almost every major bank will become a custodian of digital assets in one form or another. While on the other side, Rhodes said NFTs are an interesting opportunity for brand marketers.
NFTs saw a growth of 328% in transactions during the first three quarters of 2021, according to a report by Brandessence Market Research and Consulting. “Growing entry of major players including Microsoft, Home Depot, Tesla, Whole Foods, Starbucks, and increasing appeal of tokenization through cryptocurrencies remain a key driver of growth,” the report said.
NFTs are most known for unique one-of-a-kind digital artworks, verified via blockchain technology, they can be anything ranging from a digital certified song to a screenshot of a tweet.
Earlier this month, Nike filed to trademark “virtual goods” for products ranging from footwear, clothing and sports bags to art, toys and accessories. These requests hint at the possibility that the company is planning to either sell its products as virtual goods or non-fungible tokens (NFTs) or is trying to protect its products from becoming NFTs.
The expectation is that NFTs will become integral to the burgeoning concept of the metaverse, which Microsoft’s CEO Satya Nadella highlighted at a conference earlier this month, previewing Microsoft’s foray into the space.
In recent weeks, the concept of a metaverse, which is a digital universe where people can interact virtually, has inundated the market. Meta, formerly known as Facebook, has rebranded to reflect its future vision, adding that moving forward the tech giant will be “metaverse-first, not Facebook-first,” Blockworks previously reported.
Separately on Wednesday, Disney CEO Bob Chapek said during the company’s fourth-quarter earnings call that the media giant plans to take a leap into the metaverse as well, consistent with its history of adopting technological innovation.
“Suffice it to say, our efforts to date are merely a prologue to a time when we’ll be able to connect the physical and digital worlds even more closely, allowing for storytelling without boundaries in our own Disney metaverse,” Chapek said.
NFTs more mainstream ready than DeFi
While decentralized finance, or DeFi, is also a popular sector within the crypto industry, Rhodes said it’s harder for the public to grasp. “Then NFTs…brands can embrace them without really understanding too much about the tech,” he said.
Last week, Microsoft’s Rhodes said that the industry has hit an inflection point and the whole crypto ecosystem is just scratching the surface of what NFTs’ are, Blockworks previously reported.
In the near future, Rhodes said he expects to see things like NFTs at the top of the curve, where it currently sits.
“Many brands will continue to ape in with their own version of an NFT, which in most cases is going to be a relatively conservative approach, right? As a first toe in the water,” he said. “Then as they learn more, they’ll start to realize there’s a lot more they can do with the technologies on the brand side,” he said.
Between now and the next summer, Rhodes thinks people will start to evolve their understanding of NFTs and what they can do with it beyond just trading cards.
“I think you’ll start to see much more awareness in the market around what NFTs can be and how you might use those,” he said.
Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.