Non-fungible tokens sprang out of nowhere in 2021 and quickly amassed about us$41 billion in sales. It’s understandable that NFT leaders would ask if the NFT is a good development opportunity for a young business, given its quick growth and buzzy reputation.
Following the first flurry of interest in NFTs, the market saw a decline in sales volume as the value of Ethereum, the cryptocurrency upon which many NFTs are based, fell. Now that the NFT market is stabilising and there is hope that Ethereum will become cheaper to mine, it is simpler to answer the question of whether or not to invest in NFTs.
Moreover, the market’s severe energy inefficiency is about to be addressed, so removing a potential restraint on development. Thus, it appears that NFTs will remain successful for the foreseeable future. Do they, however, make sense for your young company’s brand?
The potential for success in the NFT sector continues to grow
The development of NFTs is, in many respects, just beginning. As more and more exchanges appear, purchasing NFTs with fiat cash will become standard practice. Players in virtual worlds and video games will soon be able to buy and sell their own unique avatars and virtual goods using NFTs.
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With the correct strategy, you can sell digital products with residual royalties embedded into the blockchain contract to a rising, tech-savvy global audience. But that doesn’t mean every company should rush into the NFT sector.
Contrary to popular belief, NFTs do not generate income at will. It needs marketing just like any other product, a comprehensive business strategy that accounts for all the costs and risks, and a solid team to back it up. It is also important to know how your NFT fits into the bigger picture of your firm before launching it.
As you deliberate, keep the following in mind with regard to NFTs:
Understanding the process: An essential first step
A thorough familiarity with blockchain technology and NFTs is necessary before diving into this field. There is plenty of material to help you master the technique. NFTNow is a great starting point.
You should educate yourself practically after you have learned the theory behind an NFT. Make a token you can “test NFT” on a friend or coworker and sell it to them for a dollar. Test out the full procedure to see if it’s something you and your potential consumers would be interested in doing again.
Whether or not you should get engaged in the NFT area depends on whether or not you have a firm grasp of the process and an understanding of why and how they increase and fall in value.
Evaluating NFT’s potential benefit for your business
The NFT’s meteoric rise in popularity is reminiscent of the smartphone app phenomenon of the past decade in more ways than one. Many people believed to have approached me as a software developer with the idea that they could become the next Mark Zuckerberg with the help of a mobile app.
Most of the time, a mobile browser might serve the same purpose as the intended app, if not better. For many business owners, investing in the development of an app would be a waste of time and resources that would not be appreciated by their target audience. Plenty of today’s business owners are still making this same error.
Launch an NFT collection only if you intend to remain in the market for the long haul and if you believe your collection has a unique value that NFT purchasers will emotionally resonate with rather than just to build publicity for your brand. Consider whether you can imagine a third party wishing to resell your NFT to the buyer. If the answer is no, then it shouldn’t be available to the public.
Calculating the initial costs
While it’s possible to mint and advertise an NFT for as little as US$100-US$500, that price may not reflect the full cost of starting a successful NFT.
To appeal to a new, younger audience of NFT aficionados, for example, you may need the assistance of professionals if your current customer base comprises people who adore antique art and collectibles. Just to get started with good brand design, storytelling, and creative direction, this may easily balloon into a marketing spend of up to US$50,000. Make sure you’ve considered all of these expenses before choosing if a launch is worthwhile.
Building an audience before launch
NFTs are not an “if you build it, they will come” kind of technology. It’s crucial that you have a sizable customer base that is interested in purchasing your wares. Since it is still developing, venturing into this new industry is fraught with uncertainty. The good news is that this indicates enormous untapped potential.
While the market for NFTs has largely been focused on art, many other potential uses are just beginning to be investigated. Decentraland is one such platform that is leveraging blockchain technology and NFTs to create a user-owned virtual environment.
The potential of NFTs is enormous, and it will be innovative businesspeople who will help bring that potential to fulfilment. Becoming an entrepreneur, though, requires more than just ambition. A market-reasonable strategy and end goal are essential. Otherwise, you’ll feel the heat in the end.
