Innovative products, services, and methods of conducting online interactions and business are continually emerging as we negotiate the digital decade, a term coined by the EU to describe the technological transformation of the 2020s . The use of blockchain technology to create, sell, and trade Non-Fungible Tokens (NFTs) is one of the most recent trends.
NFTs are a type of digital content that may be sold and collected. These tokens have unique qualities that determine their worth, unlike cryptocurrency, which uses the same ledger-based technology. The creator and ownership history data is securely stored on the blockchain, proving their authenticity.
In certain quarters, the arrival of NFTs in Southeast Asia appears to be a game-changer, notably in the arts and gaming sectors. A new location-based NFT format is gaining traction, with the potential to disrupt the user experience while also exposing them to a larger audience.
The emergence of NFTs
NFTs, like cryptocurrencies, are minted on the blockchain and have received conflicting opinions as to whether they are merely a fad or will become a more permanent fixture in our rapidly digitising world.
We take a closer look at NFT adoption in Southeast Asia
When Bitcoin first emerged in 2009, many dismissed it as a fad that would fade away fast. After thirteen years, Bitcoin has established itself as a major player in the financial markets. Companies such as payments platforms PayPal and Square have incorporated purchasing options, and governments around the world are drafting legislation and guidelines for trading.
NFTs, which are based on the decentralised finance (DeFi) tendencies of the ever-expanding crypto landscape, offer a new way to create and trade. Artists follow in the footsteps of Beeple by selling tokens with unique designs as works of art. Snoop Dogg, Shawn Mendes, and The Kings of Leon are among the musicians selling their music as collectible NFTs. NFTs can be used to buy concert tickets, experiences, and restaurant vouchers, allowing startups to build their products and services in the digital world.
Using smart contracts and secure digital identities verified through blockchain technology, NFTs offer a seamless method of conducting business transactions, shaking up the startup ecosystem as we know it. Their ability to entice those who appreciate being on the cutting edge of digital experiences. Gamification adds a fun element to the new technology by allowing NFTs to be used in virtual worlds.
Application of location-based NFT
Also known as geotagged or area NFTs, these new tokens are location specific. Because of its scarcity and uniqueness, connecting the use or collecting of data to a specific place makes it even more valuable. Many geotagged NFTs require the user or collector to be physically present at the time of purchase, which is an advantage that startups can take advantage of to boost sales in their region.
The tokens, which are geotagged to a real-world location, have the potential to become a valuable tool in the travel and tourism sector. Some travel startups are already using NFTs as loyalty rewards or as virtual passports. However, with the introduction of location-based tokens, there is the potential to use them as vouchers for products and services in the locations where the user is travelling, allowing the virtual purchase to have some real-world benefits.
Some museums, galleries, and landmarks are already allowing visitors to mint limited-edition NFTs on-site. This creative approach motivates those who are interested in collecting tokens to come to the attraction in person, as well as providing the site with additional digital marketing opportunities.
In the gaming world, the use of geotagged NFTs is inevitable. In 2016, augmented reality and near-field technology were used to entice users to collect virtual characters in the Pokémon GO game. It was a massive success, with the producers making more than $100 million USD in the first month. Because NFTs may already be acquired as rewards or purchased in games, linking them to specific locations across the world will increase their worth and desirability.
The future of NFTs for startups
As product-based NFTs, such as those for clothing and F&B purchases, become more common, there is an endless amount of potential for startups in these sectors to capitalise on the new technology trend. Companies such as Taco Bell, Uniswap socks, and crypto-trading company FTX have all unveiled NFTs that can be used to purchase real-world products. NFTs can act as a bridge between the metaverse and the real world of consumerism, taking digital content out of the metaverse and into the real world of consumerism.
Startups in ASEAN are already recognising the technology’s potential, and the adoption of NFTs in Southeast Asia is growing in popularity. As the region embraces the digital decade, the link between the meta and real worlds will become blurred further. Everything from real estate contracts to healthcare will be secured using decentralised blockchain ledgers. The introduction of the location-based NFT to this mix will allow many Southeast Asian startups to expand both online and offline, bringing even more opportunities for economic stability to the region.