In less than a week, I've written about two of the United States' top food and beverage companies launching their first ever NFTs (Coca-Cola and Campbell's both announced NFTs last week). Much like SPACs, NFTs are a thing you'll likely start to see creep up all over the internet—if you haven't already—and before you know it, everyone is doing one.
But what is an NFT exactly?
NFT stands for Non-Fungible Token. That non-fungible token has a piece of data stored within it—called a blockchain—that certifies this digital thing is unique and can't be interchanged. In its simplest terms, it's means to say 'This is the original.'
Think of it like your birth certificate and the hospital you were born at's records department. You are the unique thing. Your birth certificate is the data & blockchain certifying as much. If someone wants to ensure that you are, in fact, unique, there is a means to confirm that by looking at your birth certificate. Make sense?
You may be asking yourself the next big question: Who is selling NFTs? Who's buying them?
An NFT can be used for things like photos, videos, audio, and many other types of digital files. Anyone who's ever needed a piece of clipart or stock-art for a presentation knows you can Google images, but did you also know that the person that created that image doesn't get paid for you using that piece of clipart? The same can be said for precious works of art, viral videos, sound-bytes, and even marketing collateral. What an NFT does is marks that piece of digital content as being owned by Person X.
Who owns what piece of digital content may not seem like a big deal, but to the creator of said content, it can be a pretty big deal, especially if millions of people are re-purposing their work for personal gain (Just ask any writer, visual artist, recording artist, and even social media star). With an NFT, anyone can put their content up for purchase--or auction--and anyone can purchase the ownership rights. An NFT is essentially saying "I have the electronic token that proves I own this piece of digitized content."
NFTs are a lot like going to an auction house and being able to buy a thing you've always wanted so you can call yourself the new owner. For example, say Paul McCartney had the rights to the original photo of the Yesterday and Today album cover and he wanted to put it up for auction. You'd have to become enrolled in the auction, place a bid (or bids) and if you had the winning bid, you'd be the proud new owner of the controversial cover. Convert all of that to a digital landscape and, voila, you've got NFTs.
I'm really simplifying the explanation, but NFTs are quickly gaining steam among those in the digital world. In fact, the market value for NFTs tripled in 2020, reaching $250 million. During the first quarter of 2021, NFT sales exceeded $2 billion.
If you're looking to be a food industry early(ish) adopter, consider keeping tabs on NFTs, in particular who's doing them, how much they're worth, and why they're becoming so popular.
