What Is So Special About Physical NFT?
There is no escaping the topic of NFTs these days. A combination of multi-million dollar sales and brazen hacking has driven non-fungible tokens into the mainstream. While most of us will think of digital art, music, fashion, and the metaverse as the primary applications of this technology, physical NFTs are also carving out a place in crypto. Check out what they stand for and how they are already being used.
What Is A Physical NFT?
In addition to art, non-fungible tokens have been issued and sold as digital representations of off-chain assets such as sports collectibles, antiques, and consumer goods. When the buyer wishes to own a physical version of their property, NFTs can serve as a guarantee of ownership. As famed digital artist Beeple explains himself, he usually provides physical tokens with his artworks, which include a high-resolution screen display, a signed certificate of authenticity, cleaning materials, etc. Ultimately, physical NFTs can either be sold for the physical item they are connected to or redeemed for other non-fungible tokens.
I want to see SAMPLES!
Well, while the focus on physical NFTs is yet to gather the momentum seen elsewhere in the crypto sphere, we have some lists to showcase some of the best (and most successful) physical tokens on current days:
Putting out an NFT collaboration with Bored Apes Yacht Club, a project whose NFTs have sold for millions, Jimmy Fallon, Eminem, and Paris Hilton are cryptocurrency darlings, the German sportswear giant forayed into the metaverse in 2021. In addition to hoodies, tracksuits, and beanies, Adidas Originals buyers could claim exclusive physical merchandise.
RTFKT (recently acquired by Nike) has long pushed physical NFTs, making it possible for holders of non-fungible tokens to easily redeem actual footwear, calling them a “blueprint” for real life. A range of physical items has been designed by RTFKT with the help of other crypto creators.
WENEW was founded by digital pioneer Mike Winkelmann (also known as Beeple) to sell “iconic” historical moments and cultural milestones, such as Andy Murray’s 2013 Wimbledon victory. Additionally, collectors can receive a museum-quality screen that displays their NFTs.
A new collection of physical hoodies has been launched by fashion retailer GAP as part of its new NFT program. Brandon Sines, an artist affiliated with Frank Ape, created the non-fungible tokens. To claim a Frank Ape collectible hoodie, fans must collect Common and Rare level tokens, according to GAP.
With Gary Vaynerchuck’s VeeFriends NFT signature characters, the legendary toy maker Mattel entered the NFT world. It seems that Mattel intends to explore the “intersection between gaming, digital art, and collectability” in the future.
Linking NFT to Physical items?
Say that you’re interested in the idea, how do you go about it?
Let’s have a case study, with a painting. Starting with making a ‘digital twin’ it is easily done by taking a photo with any of your devices, or advisable with a professional camera. Once it’s digitized, make sure all the information related to this painting, such as sizing, a technique used, authentic, or more, is as precise as possible and properly attached to the virtual file. Then choose an NFT marketplace of your choice to mint your painting. Smart contracts manage ownership and transferability of Ethereum-based tokens, which make up the majority of NFTs. Any information about the digital asset is stored on the blockchain, where the NFT is managed, defining the boundaries of any transaction. This coding is how you’re able to link your digitized painting, or NFT, to the real-life piece.
Nike, for instance, has experimented with digital shoes with a unique identifier that is associated with a physical pair using QR codes and NFC tags. Since NFTs cannot be modified after minting, you better get the details right, including coding, before minting and linking them to physical assets.
Why should I do it?
Physical NFTs offers the biggest advantage of proving authenticity and provenance. NFTs can be a valuable tool for buyers and sellers in an industry where counterfeits are estimated to be worth $500 billion. Blockchain technology makes it impossible to change, fake, or tamper with the information attached to virtual assets or their physical counterparts, providing an irrefutable data trail.
Buyers and sellers both benefit from cutting out the middleman, giving them freedom and monetary rewards. As a final point, physical NFTs can be tied to recurring royalties and the seller can receive a cut whenever an asset changes hands.
But it’s not easy!
There are disadvantages to physical NFTs, as with any emerging technology. There might be legal issues to deal with since the buyer of a physical NFT might not have access to the copyright, so they won’t be able to distribute, share or even display it in public. Additionally, a physical asset, such as a sculpture, can be created and sold to one buyer and to another without being tied to a non-fungible token. Then of course there are fake sales, less than credible sellers, and hacks, all of which marketplaces are trying to tackle, but there’s still a long way to go.
To wrap it up…
In addition to digital assets, NFTs can be applied to a wide range of physical assets. Physical non-fungible tokens are not just for CryptoPunks, Bored Apes, or NBA Topshot collectibles. They can be used in real-life, mundane areas, such as the supply chain where blockchain technology can provide traceability, authentication, and certification assurances.