Physical & Digital NFTs
Unique items have long been attracting collectors who are willing to pay top dollar to get them. Paintings, baseball cards, stamps, vintage cards and rare coins have all been sold at huge premiums to collectors in the past. Now these items are moving into the digital realm, thanks to the use of blockchain technology.
These items are now represented on several different blockchain networks as “unique” digital assets known as NFTs or nonfungible tokens. The use of blockchain technology means that authenticity and ownership are easily verifiable, especially in a world where scarcity plays a vital role in the valuation of an asset.
But why only do one or the other? Why not create a digital NFT that goes along with the physical?
Digital VS physical
It’s understandable that people who have collected baseball cards for 30+ years don’t understand why they should pay for a picture of a card on their phone when they can just buy the actual card and own it physically. But the reason is simple – both have intrinsic value in the secondary market. They may be different in nature, but both have value. Actually, recent data shows that the value of Topps digital collectibles have far exceeded that of the physical one. The easy explanation to this is the supply is far smaller and the demand is huge. In addition, it can be traded across many platforms, sold easily, and can be produced without the same effort as a physical card.
Topps NFT (Digital)
Mint number 9 out of 402
Price: ranging between $5 and $15
Ebay wouldn’t need to exist if every manufacturer website gave their customers a marketplace to resell or buy used products, right next to where the original product was sold. NFTs and technology we’re building for enterprises allow this marketplace to be created in a matter of weeks. Manufacturers would earn from every resale, multiplying revenues from the same product. It also creates the potential to build a range of secondary market services like authentication, grading, refurbishing – by the foremost product experts – the manufacturers themselves.
Combining Physical & Digital
Instead of picking one or the other, we see the value of creating a digital NFT that goes along with the physical item. Digital buyers get the NFT right away with the option to redeem the physical item later.
- Creates a market for the physical item, even pre-made, as soon as the NFT is created
- Increased physical items launched by speeding up and lowering upfront costs
- potential virality as buyers can make instant profit being an early adopter
- Possible to implement where users never even see the letters “NFT”
- The sales of the physical item can multiply
- Digital is selling at multiple of physical
- Special serial numbers sell for multiples of others
- Capture secondary/resale royalties
- Secondary market size potentially multiples of primary market
Collectibles manufacturers, if you’re not adding NFTs to your products, you’re missing out on a secondary marketplace that should be multiples of your existing market.