September 27, 2023 | Seattle, WA
NFTs in their first iteration are worthless
In an era where digital transformation is more than just a buzzword, we're witnessing the impressive rise—and pitfalls—of the NFT space. Just a few years back, as the NFT wave was cresting, an astonishing 95% of these tokens now appear to lack lasting value, with the remainder significantly depreciated and worth much less than they were a couple years ago. The once-popular PFP (Profile Picture) tradeable avatars have proven not to be the game-changing usecase those in the crypto industry anticipated.
As someone who built a crypto company during the Initial Coin Offering days of 2017 - 2018 and thankfully never conducted an ICO, the initial frothiness of the NFT market mirrored the bad behavior of the ICO frenzy resonate. Projects using NFT sales to raise funds and promise future incentives, value, and even wealth, was a recipe for disaster from the start, skirting the line of acting as a security.
I had the opportunity to get in on mints, which is the initial creation of the NFT, I couldn't find myself to get the gumption to get involved as I did not believe in the value that I believed to be artificially being created. I'll admit, there are two mints I had serious FOMO about passing on after the fact, especially as their prices ripped, but I always had trouble believing in the speculative nature of NFTs the same way I had trouble believing in the speculative nature behind most cryptocurrency coins. Maybe I could have made money, buying and trading items I don't believe in, but simply put, I have trouble spending time, effort, and money in things I don't believe in.
Our conversations with brands revealed a common trend: many were eager to tap into the allure of NFTs, mimicking NFT project behavior, dreaming of royalties on sales and listing their tokens on secondary markets. They envisioned a thriving ecosystem where brand NFTs would be freely traded. However, this approach carried significant risks, not least of which was the specter of securities regulations. Now there are projects in the NFT space that are already receiving attention from regulatory bodies like the SEC. Niftmint's stance has always been clear: if it walks like a security and talks like a security, it's best approached with caution. This principle led us to part ways with potential collaborations with Brands and Investors, and today, it stands as a testament to our commitment to integrity and foresight.
In addition to the SEC issues, brands were miseducated and misinformed by people in the PFP Avatar NFT space that had success with those NFTs, and that led to FOMO as certain brands tried to copy the unrealistic and unnatural behavior that spawned from the rapid rise in popularity of the PFP Avatar NFTs.
While the cryptocurrency market, followed by rapidly entering investors, brands, and celebrities were diving into PFP Avatars, touting its use case adoption, myself and the Niftmint team actively voiced our concerns and instead focused on how the technology of NFTs will come to redefine Commerce.
Why are we building a NFT Technology company?
So, one might ask: "how can a company deeply embedded in the digital asset space be seemingly bearish on NFTs?" The answer lies in understanding the broader picture. Brands will offer more digital products in the future and consumers will increasingly gravitate toward them. In a landscape dominated by AI, where replicating original digital items has become an everyday occurrence, the need for digital content files—be they PDFs, JPEGs, or MP3s—to be programmable, immutable, and authenticated has never been more pressing.
In the future, that product will be a better JPEG, PNG, MP3, etc. So what does that even mean? A better JPEG, PNG, MP3, etc. would be authentic, immutable, verifiable, maintain provenance, and be programmable.
How could you make a better Digital Product? You tokenize it or essentially create an NFT (Non-Fungible Token) equivalent. NFT technology allows for a digital wrapper around a digital content file in order to unleash the ability to authenticate, keep immutable, verify, maintain provenance, and be programmable. Tokenization involves creating smart contracts and generating NFTs (Non-Fungible Tokens) for these digital assets.
At Niftmint, we've always visualized this beyond the narrow confines of the current NFT paradigm. We're not just another NFT player; we're a FinTech and RetailTech Infrastructure company that delves into tokenizing real-world assets in the commerce vertical. The avenue we use to accomplish this? Creating NFTs of physical goods or facilitating the genesis of digital goods.
I've been lucky enough to work with Brands and Retail the majority of my career, providing me with a unique perspective into how Brands operate, adopt new technology, and serve their customers with digital experiences. As someone who was early in Social Commerce in the mid 2010s and Crypto Loyalty in 2017, along with leading innovation at a big box retailer and starting my own retail company, I know intimately well how Brands make decisions. Brands care most about revenue, customer retention, customer lifetime value, and brand awareness.
Tokenized Digital Products, as we see them unlock strategic marketing behavior by decision makers. NFTs can represent a physical item, complement an existing one, or stand independently as a unique digital product. The core of this strategy hinges on user experience and the management of digital content—essentially, the manner in which people utilize and store it. Niftmint has been laboriously crafting this foundational infrastructure for the past two years.
If you're skeptical about this evolution, consider the plethora of internet protocols we use daily as consumers. Many once demanded deep technical expertise but are now effortlessly accessed via user-friendly apps. Web browsers serve as a prime example.
In conclusion, the digital future we envisage at Niftmint is one where NFTs are omnipresent, seamlessly integrated into our daily routines. The majority of users may remain oblivious to their workings, but their influence, running silently in the background, will be undeniable.
At Niftmint, we have built the Commerce Infrastructure for Brands and Enterprise to create Digital Assets (NFTs) on their existing eCommerce storefronts and applications, while allowing Brands the ability to offer these Digital Assets for sale or giveaway with the same functionality they would any other product they sell online. Niftmint also handles all cryptocurrency, cryptocurrency wallet, and transfer of the Digital Assets, supporting a full custody solution for Brands. Niftmint simply lives in the background and seamlessly turns any Web2 company into a Web3 company while staying true to the Brands current processes.
About Niftmint
Niftmint makes it simple for Brands to Mint, Sell, and Custody NFTs directly on their site while abstracting crypto and crypto-wallets from the Brand and their Customers via our embedded Niftmint Wallet. Niftmint has productized all smart contracts, wallet creations, token deployments, and transfers while providing a user experience native to traditional Commerce.
About the Author
Jonathan G. Blanco is the Founder and CEO of Niftmint and has been building companies at the intersection of Web3 and Commerce since 2017, working with leading brands to establish, build, and execute Web3 Commerce in their organizations. As a Product and Branding leader, Jonathan has been working with and building Brands since 2009 and has been building retail technology and commerce integrations since 2014. Jonathan has long been an advocate for Web3, always doing so from a product and customer lens to make sure the experience is true to the business need.