Small businesses need to keep an eye on non-fungible tokens (NFTs). Think passes to physical or virtual events, access to reports and perks and subscriptions to spas and gyms. These are digital assets where ownership and value get set on blockchain.
Nick Casares, Head of Product, PolyientX supplied Small Business Trends with some industry predictions. And reasons why small business owners and entrepreneurs need to keep NFTs on their radar.
“NFTs are a tech trend worth following,” he writes adding this fledgling digital asset gained traction last year. “ They allow easy proof of ownership and represent a range of scarce items.”
They don’t expire. And while they can be resold without merchant permission, secondary sales will bring in new customers.
NFT Predictions in 2022
Casares’ first prediction is about being cautious.
Most NFT projects will fail due to lack of vision and resources.
He feels that many of the successful projects are riding a bubble that’s both good and bad.
“While this has been good for growth and awareness, market mania has promoted cash-grab projects,” he says. “These lack the roadmap or capability of delivering “more than a JPG.”
However, the small business push is already on. Casares points to one industry leading name that’s on board.
“Smart SMB operators should keep a close eye on headlines. And look for opportunities to experiment with the technology,” he says. “Shopify, the leading e-commerce provider for SMBs, recently announced NFT capabilities.”
That said, certain enterprises should consider an NFT now.
“Industries catering to subscription-oriented revenue streams like membership passes and recurring services will find an NFT in the short term.”
His other predictions include:
A centralized NFT marketplace that will boost the next wave of crypto adoption.
“The idea that there is no centralized entity for account recovery is scary and foreign to most users,” Casares says. He adds NFTs will borrow from the crypto toolbox. “It’s a security tradeoff. But it will help make onboarding much easier for new users.”
A “virtual land grab” as people scramble to create and own new metaverses.
“Large brands, celebrities, and influencers will push the metaverse narrative into mainstream conversation.”
Consumers will be able to mirror personal style in the metaverse.
Clothing and style will adopt a “digital twin” side.
Business owners need to remember this technology is still wet behind the ears. Even though NFTs are evolving, it’s already clear it’s not for all businesses. At least not yet.
Casares explains, “Regulated service providers like CPAs, attorneys and engineers would be wise to tread lightly. Because the regulatory rules are still in flux.”
He has some other advice for entrereneurs.
“NFT tech is moving quickly, but it is still highly specialized and prone to technical issues. A solid development partner is essential for SMBs piloting this technology,” he says. “Meaningful due diligence includes checking references and examining the team’s background. Evaluating social profiles, and, of course, inspecting the quality of previous work are also important.”
Finally, Casares predicts NFT technology will follow a path laid down by ecommerce and smartphones.
“Entrepreneurs who pay their dues by investing now will be well-positioned as leaders of a new internet.”