NFTs have triggered tremendous interest among brands for the past few years. The concept of owning a digital object that can be sold, traded or taken somewhere else was not possible before the advent of cryptography, blockchain and related innovations such as NFTs. But do all the rules and logic of the physical world apply? What is the current status of the NFT market and how can past experience and future possibilities guide brands in managing the risks connected to the constantly evolving uses of this technology?

NFT stands for non-fungible token, a unique piece of code where ownership is written and recorded on a blockchain and purchased using a digital wallet like Metamask, using crypto or fiat currency. They can be bought and sold through marketplaces such as OpenSea or Rarible, or a brand’s own. Each token represents rights to a unique digital asset or collectible such as an avatar, wearable, skin or digital artwork. Many luxury brands were drawn to NFTs as tradeable assets and as new business models, a classic example being the sale of a digital asset to provide a customer with access to a physical item.

Read the full article