Frankly, it would be fairly hard to not have heard about NFTs by now. Even if you are not 100% sure just exactly what an NFT is, you have probably heard about someone paying US$69M for an NFT called “The First 5,000 Days”. Clearly there must be a market for these things and if there is a market, that means that product managers have to get involved. However, what is an NFT and just exactly how does the NFT market work?
What Are NFTs?
Ok, so by now you are probably sick of hearing about NFTs. Just like the rest of us you have probably heard of celebrities like Tony Hawk and Paris Hilton joining in on this crypto world of art or the astronomically high prices people are paying for both cartoon monkeys and pixelated images. Let us agree that there is certainly a lot of hype around NFTs, and we are permitted to question why others are so obsessed about what seems to be just a JPEG. It turns out that NFTs are really much more than that, so let’s dive into the tech and get to understand what this phenomenon is all about and what it might mean to product managers.
The right way to start this discussion off is to start by defining what an NFT is exactly. First off: NFT stands for “non-fungible token”. Non-fungible tokens are uniquely numbered tokens that can be “minted” and are one of a kind on a blockchain. An NFT token has its metadata encoded permanently on the blockchain in a format that is “non fungible”. This means that it can’t be changed. Often this metadata includes a URI (uniform resource identifier) which is comparable to a URL. That URI points to a unique item (a JPEG or a piece of art) which is the visual representation of this token.
This token cannot be duplicated or recreated “on chain” anywhere; there is only one in the world. It can be transferred between people, but the actual ownership of an NFT means that it can only exist in one “wallet.” When purchasing NFTs, people are actually buying the piece of art – the JPEG – but, more importantly, they are buying the token as the certificate of their authenticity. “On chain” you can trace back all of its owners to the item’s ultimate creator. This is what most people – the “right click save as…” crowd – are failing to understand.
What Can NFTs Be Used For?
Product managers need to understand that NFTs are so much more than art. While NFTs are clearly great things for artists and creators everywhere, there’s actually many more things NFTs can, and will eventually be used for. The original specification for NFTs called them deeds or certificates. Because NFTs represent something that is one of a kind, they are essentially just another validation of ownership that can be attached to many different things, for example: certificates, memberships, metaverse goods, event ticketing, and real estate (in the future).
A good way to think about NFTs is to remember that an NFT is essentially a digital representation of an item’s one-of-a-kind-ness. Product managers need to realize that there’s a learning and adoption curve with NFTs, mostly because people are so used to being able to physically grasp and touch something to understand ownership of it. In all honesty, the concept of being able to own something digital is not that much of a leap considering the money and stocks we own are mostly digitally represented at this point. The records of any diplomas or certificates that you’ve earned are held in a database somewhere.
Product managers need to realize that NFTs are bringing the concept of ownership more online and making that ownership more accessible and transparent to people than ever before. It’s no longer just sitting in someone’s database; instead it’s “on chain.” If we look at the trends that are occurring, ownership becoming more digitally managed is inevitable and has real utility. While it’s easy to discount the cartoon monkeys/penguins/cats that people are buying, the concepts and technologies that they are playing with will have a big impact and utility. Groundbreaking technology usually gets adopted by gamers first, and NFTs are no exception. Product managers need to prepare for their products to be sold in the future as NFTs!
What All Of This Means For You
The world that we live in is always changing – new things keep showing up. One new thing that has shown up recently is something called “NFTs”. These things seem to be getting bought and sold online for very large amounts of money. What is an NFT and how should product managers be preparing to deal with them in the future?
When NFTs first showed up, people seemed to be paying a lot of money to take ownership of pixelated images that anyone could just download off the internet. NFT stands for “non-fungible token” which is something that uniquely numbered tokens that can be “minted”. There is only one in the world. It can be transferred between people, but the actual ownership of an NFT means that only one person can own it. NFTs have been used to allow art to be sold online. However, there’s actually many more things NFTs can, and will eventually be used for. A NFT is essentially a digital representation of an item’s one-of-a-kind-ness. Digital ownership is becoming more digitally managed is inevitable and has real utility.
Product managers are responsible for products. In the future, there are going to be more and more digital products. If NFTs are going to be how these products are bought and sold, then product managers are going to have to become experts with NFTs. Make sure that you get ready – NFTs are coming your way!
Question For You: Do you think that customers will be willing to buy NFTs for things that used to be physically purchased?
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What We’ll Be Talking About Next Time
I think that we all realize that the Covid-19 pandemic affected just about everyone. Even after the vaccine was available, people could still get sick. The one thing that everyone wanted was a way to determine if they had Covid-19. Sure, they could go to the doctor and get tested, but what they really wanted to be able to do was to test themselves at home. This customers desire for an at home Covid-19 test created a marketing frenzy and that’s when the product managers stepped in.