It would be surprising if anyone in the digital (and regular!) world hasn’t heard of NFTs, or non-fungible tokens. But what are they exactly? And how are they intersecting with the world of eCommerce?
What are NFTs?
First, we should explain what “Non-fungible means. “Non-fungible” means the item cannot be exchanged for another item of the same value. For example, a $10 bill can be exchanged for any combination of other currency that equals $10 – 40 quarters, 10 $1 bills, etc. These are examples of things that are fungible. An NFT, on the other hand, is a one-of-a-kind digital item that isn’t interchangeable.
Furthermore, an NFT is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can represent a number of items, such as photos, videos, audio, and other types of digital files.
Think of NFTs as original and unique collector items – when you buy an original painting, you know it is the only one of its kind. Likewise, an NFT is an original piece of digital content that cannot be forged. While NFTs are the newest craze, the NFT market value tripled in 2020, reaching more than $250 million. During the first quarter of 2021, NFT sales exceeded $2 billion. That is some serious coin.
eCommerce and NFTs
NFTs could have some very interesting applications in the world of eCommerce. Because of return fraud, proving ownership of a purchased item has become more and more difficult for consumers. If you bought an item using someone else’s card (with their consent, of course!), cannot produce a receipt for the item, or bought an antique or vintage item, proving that you are the rightful owner can be a terribly long and hard process.
NFTs could potentially solve this problem. A properly designed NFT could be used to represent a physical item and its legal owner would have a much easier time proving the item belongs to them. Remember that NFTs are totally unique and stored on a decentralized ledger, making it very easy to verify who their owner is.
Platforms like NFTify provide entrepreneurs with the tools to create an online digital NFT store without needing to know or write any code. This platform is also equipped with AI that helps detect NFTs that might be similar to yours. This puts a small business in the hands of an individual without the need to establish any of their own infrastructure. NFTs are also changing the way money circulates within our economy and are becoming financial instruments with which we can conduct business and earn money.
The final word
NFTs are still pretty new, and because of this, they’re not a surefire way to make a profit or revolutionize your business. Right now NFTs are linked to art and collectibles, but the technology behind them could very well one day be used for the technical needs of eCommerce store owners and platforms. It certainly looks like eCommerce is moving in this direction, as Shopify is starting to allow its e-commerce customers to sell NFTs directly.
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