NFTs and Luxury Goods
One of the most interesting applications of NFTs to physical assets would be in the luxury sector. Most major brands suffer from counterfeiting, which impacts the bottom line of the companies and the brand value to consumers. Implementing NFTs would put a stop to almost all unwanted counterfeiting, improve the customer experience and improve the balance sheet of companies.
How would this work?
Imagine that every product produced from Louis Vuitton or Rolex had an NFT minted along with it, and the records were stored on Louis Vuitton and Rolex Etherum chains, respectively. The NFTs on these chains would carry the following information:
When it was made.
Where it was made.
If it were a limited edition with related information.
What wallet it originated from, for example, from the Rolex or Louis Vuitton chain.
What wallets it had belonged. (Was the item stolen)
Who was the current owner of the NFT. (Does the person/company selling the item actually have the item and the right to sell the item.)
These NFTs would allow all customers worldwide to buy high-end items new or used with confidence since they would be able to verify the authenticity and ownership of any item before purchasing. NFTs would also give customers the confidence that they could resell their items without any questions about authenticity.
For later Impact on Counterfeiting
We believe NFTs would directly impact the desirability (or lack of desirability) in producing counterfeit luxury items. Many counterfeiters make a good portion of their money by selling their goods to unsuspecting buyers who believe they are getting a deal on a real item. In the absence of an authentic NFT, the counterfeit items would mostly experience a significant reduction in sale price.
It would stand to reason that as prices of counterfeit goods fall, the quality of those goods would also fall, making them less desirable given the obvious gap between the real item and the fake item. Granted, there will always be individuals who will produce counterfeit goods and consumers who will buy counterfeit goods knowingly. But over time, NFTs would put those individuals into a smaller and smaller niche.
NFTs & Physical Assets
One of the most exciting applications of NFTs is to physical goods and assets. Think luxury goods for this example, which we will discuss in the next section. What makes NFTs so interesting in this context is how they can safeguard consumers without the need for a third-party arbitrator (think eBay or other platforms.) In this scenario, the company that creates a product would be able to control the authentic pool of their goods in the marketplace via a blockchain that records and manages their products.
There a numerous other physical assets and goods NFTs could be applied with success. For example, real estate, physical art, jewelry, collectibles, sports memorabilia, and the list goes on. What is essential to understand is the general idea of how the process would work given the luxury items example below.
If you would like a more detailed explanation for how NFTs could be applied to a given good, product, or asset, contact us directly to assist you.
How did we get here and why is there so much hype around NFTs?
NFTs are a lot simpler than you might think. Get a quick breakdown of what an NFT is and what it is not.
How likely are NFTs to stick around and under what circumstances might that occur?
Get a clear insight into how we view the value, price stability, and over drivers of NFTs.
Learn how NFTs and Creative Digital Works like JPEGS, AVI, Memes, etc. work together.
Learn how NFTs and Physical Assets could work together.