The Next Generation of NFTs: Enabling Connection Beyond Ownership
Two years ago from today, I set out to build a vision of the future that bridged blockchain systems into existing e-commerce platforms. I wanted to create a new category of product that was digital by nature but was unique in the sense that it could be owned by a customer and taken with them throughout their digital experience online
The idea was simple: as consumers spend more and more time online, brands will need to shift their product offerings to meet that change in consumer behavior. If your target market lives online, you are missing out by not giving them something they can use and engage with on the internet. So I set out to do just that. and I chose to leverage NFTs at the core of what I built.
But during the next 18 months, an NFT craze consumed the internet. As a builder, I thought this was amazing. More people coming into the space would help make the technology better. However, what transpired was quite the opposite:
Cash grabs, pyramid schemes, rug pulls, hacks, and borderline criminal levels of carbon emissions and gas fees.
They promised ownership yet most didn’t even have their own smart contract
They promised utility yet most never got to step 2 on the roadmap
They promised connection but couldn’t be used outside their ecosystems
Unfulfilled promises behind Web 3 marketing lingo.
Now I’d like to mention here that not all people were doing this but it didn’t matter because as the dominoes fell and people saw behind the veiled curtain, they realized these “NFTs” were nothing more than a wolf in sheep’s clothing.
And so NFTs became something to roll your eyes at. Something that would often bring sarcastic remarks. It almost became a cult that those who were in it refused to look objectively at. And those who were outside of it refused to see past its failures.
That dichotomy was in full effect in New York NFT week just a few weeks ago. On one hand, you had a community that was extremely passionate but albeit a bit disillusioned, and on the other hand, you had everyone else who still was wondering how something like an NFT conference could still exist.
It’s a shame that I have to be careful about mentioning blockchain or NFTs with prospects or in our marketing material now. The word represents an exploitation of technology which will be recounted for some time. And the simple fact is that brands and creators are turned off by it.
So are NFTs really dead?
The iteration of NFTs that everyday consumers think of when they hear the term NFT is dead. But that doesn’t mean that the next iteration of NFTs will die with it. In fact, I think the death of fake NFTs will help builders in the space refocus on what matters and build for use cases that actually leverage the technology and not the clicks and engagement that come with it.
So what does this new iteration look like?
The next generation of NFTs will bring about new channels of monetization, customer engagement, and loyalty. They will be built on the back of actual technology that is far more environmentally friendly and scalable. It will leverage elements of both traditional web 2 and web 3 platforms to create a seamless experience for all ecosystems. It will use wallets that don’t need a degree in computer science to configure. It will enable ownership yes, but more importantly it will enable connection.
The goal is to create a product that can be directly integrated into a customer's online experience. The more they can use that product via these connections, the more valuable it is.
Here’s an example of what that connection looks like after buying a membership to your favorite brand.
1. Customer buys membership on Shopify just like a normal physical product. They then can use that membership to gain early access to product drops and receive discounts at checkout.
2. When a customer leaves the original brand site they can then connect the same membership to receive free services and discounted products at a partnering brand's storefront.
3. Then they can connect that same membership to a community board that allows them to show off their ranking in the brand and see what other digital products might align well with their interests.
4. After the customer sees the value of their membership has tripled due to demand, they decide to connect that membership to a marketplace to cash out and sell it.
And I don't just believe this sort of thing is possible in the future...I know it is as we have done the exact use cases outlined above with brands like Malbon Golf who have used this technology to change the way they do business.
The above use case is less than 1% of what this technology can unlock. In the future users will be able to flex their digital products on their socials and find friends whose wallets look the exact same, they will be able to connect their products to new brands so they can get accurate sizing information and more personalized offers, and they can connect digital products in the real world to turn an online product into a ticket for an event.
This new iteration of e-commerce will bring together brands that never even knew one another existed. As they compete against big brands like Amazon they will begin to collaborate to create Amazon Prime-like products that can unlock content, products, experiences and so much more.
Of course, this won’t come all at once. Adoption will drive most of the ecosystem benefits and It will take time. But now we can move on from the old NFT era into the era of digital products. An era defined by connection. A rebrand that can help us understand how distributed ledger-backed digital assets can be used to bring life-changing value to brands, creators, and consumers.
*As a disclaimer, I do want to make sure that this post is not directed at people who have built amazing games, projects, and companies over the past two years in this space. There are plenty of examples I can list of builders who actually are leveraging the technology and doing some amazing things. This post was just meant to call out what we all know. And that’s that NFTs will not be adopted widely until they actually do what they are meant to do. And I want this technology to be shared with everyone, not just the people who live in it.