With NFT, finally a crypto product with a clear PR application



Communicators might not look to sell collectible versions of their tweets, but the opportunity to create one-of-a-kind brand swag shouldn’t be overlooked.

Most communicators have had little use for the world of blockchain technology, which has been the darling of the tech world for the last several years.

Sure, companies have been on the receiving end of some press attention for things like their investment in Bitcoin or a release of their own unique cryptocurrency. But for the most part, communicators have not cashed in on the viral interest in cryptocurrency tech. Its applications were complex, hard to explain and sometimes a tough sell amid a landscape filled with hucksters who swarmed the gold rush of the early rollout.

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That might be changing with the NFT, or “non-fungible token.”

What is an NFT? The Verge has this handy explanation:

“Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. You gave up a Squirtle, and got a 1909 T206 Honus Wagner, which StadiumTalk calls “the Mona Lisa of baseball cards.” (I’ll take their word for it.)

Why does the explanation use the example of collectible baseball cards as an analog for the NFT? Because that’s where most of the action is happening around this technology right now.

The technology has become the darling of the collectible card market, with users spending thousands of dollars on NBA Topshot and other items. Other digital collectibles are being traded as well. Twitter’s Jack Dorsey is offering to sell his first ever tweet with a current bid of $2.5 million.

It’s a trend that’s hard to explain unless you buy into the concept of collecting digital artifacts—which admittedly can be duplicated and will degrade over time. The Verge explains: “Bit rot is a real thing: image quality deteriorates, file formats can’t be opened anymore, websites go down, people forget the password to their wallets. But physical art in museums is also shockingly fragile.”

The PR application

PR pros should note the news of Nashville band Kings of Leon’s NFT release.

Rolling Stone reported:

The band is actually dropping three types of tokens as part of a series called “NFT Yourself,” people involved in the project tells Rolling Stone. One type is a special album package, while a second type offers live show perks like front-row seats for life, and a third type is just for exclusive audiovisual art. All three types of tokens offer art designed by the band’s longtime creative partner Night After Night; the smart contracts and intelligence within the tokens were developed by YellowHeart, a company that wants to use blockchain technology to bring value back to music and better direct-to-fan relationships.

It’s an encouraging development for the music industry, which has suffered tremendously amid CD sales evaporating in the digital marketplace—and COVID-19 cancelling countless live concert experiences.

But what does it mean for PR pros who don’t represent a music act? The NFT may well represent the future of the exclusive swag drop for brands.

Plenty of companies have made headlines by releasing exclusive items for superfans. Tesla’s release of a signature tequila is one recent example. Brands such as Taco Bell are also forging ahead with unique offerings:

Our Spicy Potato Soft Tacos can now live in your hearts, stomachs and digital wallets. https://t.co/IC8b45lmd9 pic.twitter.com/FJUcuwCuyy

— Taco Bell (@tacobell) March 8, 2021

With the NFT, brands could offer exclusive memberships or packages that users can hold onto in their crypto wallets to redeem special offers, one-of-a-kind creations or as part of a member rewards program. NFTs can be traded by customers after an initial purchase, with a percentage of each subsequent sale going to the brand if desired.

How the NFT works

An NFT can be based on any cryptocurrency, but most are currently built on the Ethereum platform.

Mashable explains:

NFTs are created on Ethereum’s blockchain, which is immutable, meaning it cannot be altered. No one can undo your ownership of an NFT or re-create that exact same one. They’re also “permissionless,” so anyone can create, buy, or sell an NFT without asking for permission. Finally, every NFT is unique, and can be viewed by anyone.

So yes — it’s like a unique collectible card in a forever-open store window that anyone can admire, but only one person (or cryptocurrency wallet, to be exact) can own at any given time.

If you want the NFT to be assigned to real-world perks, you will have to develop that with a partner, but agencies are starting to offer these services. Kings of Leon is working with the group Yellow Heart for its release.

Risks to consider

The NFT and other products based on blockchain don’t come without risks. A lot of education will be required for consumers who aren’t digitally savvy or who fail to see the value in collecting digital artifacts. A useful NFT program will also require lots of brand trust, essentially being built on consumer belief that what they just bought will remain rare and exclusive.

And then there’s the environment. The energy use from blockchain technology (which contributes to climate change and environmental damage) is both staggering and hard to pin down precisely.

Wired wrote:

The trade-off is that this model consumes lots of energy. The major marketplaces for NFT art, which include MakersPlace, Nifty Gateway, and SuperRare, conduct their sales through Ethereum, which maintains a secure record of cryptocurrency and NFT transactions through a process called mining. The system is similar to the one that verifies Bitcoin, involving a network of computers that use advanced cryptography to decide whether transactions are valid—and in doing so uses energy on the scale of a small country.

Writer Duncan Geere offers this estimate for energy consumption:

A single cryptoart NFT (“non-fungible token” – which cryptoart folks have declared to represent the ownership of a digital artwork) involves potentially dozens of transactions. Akten analysed 18,000 of these tokens, finding that the average NFT has a footprint of around 211 kg of CO2 equivalent.

There are efforts to make the technology more energy efficient, but the progress has been slow, and there are potentially real risks for brands that are trying to meet promises on reducing their carbon footprint and other CSR initiatives.

One way that some brands are testing the waters is to donate all proceeds from the sales of their NFT to charity. Both Taco Bell and Kings of Leon have pledged to donate the profits from their NFT drops to charitable causes.

Technical know-how

It’s also crucial to take extra precaution around cybersecurity and technical preparedness, says Maraget Huang, senior vice president with Ditto PR, and a veteran of campaigns using NFTs.

“Risks around NFTs are related to security and the technical back-end,” she explains. “Before launching an NFT, make sure you are working with a technology provider you can trust who has done this before. These tokens also need to be securely stored and managed, so make sure that component is a consideration. The last thing you want is for an NFT to be compromised via a security breach or someone trying to create a fake.”

Huang also recommends keeping your NFT offering simple to help audiences understand the campaign.

“I’d make it as easy to understand as possible: ‘We’re launching a one-of-a-kind collectible that is in a digital format,’” she offers as an example. “I’d want to make sure the creator of the collectible is recognized and gets a portion of the proceeds. A big part of NFTs and why they are important is that creators/artists are supported. For example, I helped to launch Audius, a music streaming platform for indie artists that makes sure content creators are fairly compensated.”

Here are Huang’s three top considerations to weigh before launching your NFT:

Make sure you’re working with a solid, trustworthy tech provider.
Create something truly unique that people will want and that resonates with your brand (and is authentic vs. just jumping on the NFT bandwagon).
Make sure consumers understand how to safely store and manage their NFTs on a digital wallet, and that the creator/artist is getting compensated for their work.

So before you work with William Shatner to sell a digital collectible of the X-ray image of his tooth, consider the many implications of an NFT drop for your organization. There are plenty of consumers who are willing to get their hands on one-of-a-kind digital arcana, but there’s still lots to be learned about this new digital medium and marketplace.

The post With NFT, finally a crypto product with a clear PR application appeared first on Ragan Communications.

Article Source and Credit ragan.com https://www.ragan.com/with-nft-finally-a-crypto-product-with-a-clear-pr-application/ Buy Tickets for every event – Sports, Concerts, Festivals and more buytickets.com

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