1.
How to sell real-world items as NFTs?
Almost anything can be tokenized these days — and some companies have already started converting physical objects into non-fungible tokens.
Perhaps one of the biggest and most compelling use cases to emerge so far involves property. If you’ve bought a home before, you know how arduous and time-consuming the process can be — with tons of paperwork and antiquated systems.
NFTs are touted as a way to modernize the way things are done, with ownership properly recorded on the blockchain. This could speed things up, reduce disputes, and help combat fraud.
It also opens the door to buying homes using cryptocurrency instead of fiat currency — a number of businesses, especially in Miami, have sprung up in recent months to make this possible.
2.
Will this help modernize the lucrative world of collectibles?
Yes – and potentially improve safety in the process.
Sports memorabilia remains incredibly popular — and Pokemon cards have also seen a resurgence in recent years.
NFTs can be used to create digital representations of items that exist in the real world. This helps combat counterfeiting and creates a clear record of ownership.
Some cryptocurrency companies have been set up to even provide safekeeping services for blue-chip collectibles – ensuring they are kept in a safe place and intact. While this may sound counterintuitive at first, it can prove particularly compelling if you view your memorabilia as an investment opportunity.
It can also simplify the auction process in the secondary market.
3.
Are any big brands getting involved in physical NFTs?
Yes - although the bear market volumes have cooled. More big names are bound to join in the future.
Nike tops the list of major brands generating revenue from NFTs, with recent research suggesting the sportswear giant has raked in a whopping $185 million after diving headfirst into the world of digital sneakers — thanks in part to a savvy acquisition of Web3 studio RTFKT.
But Nike's efforts go beyond just making sure the avatars in the Metaverse look good in cutting-edge virtual threads. It's also dabbling in the NFT series, combining digital designs with real versions of the sneakers they bought. This could become a new wave in the fashion world - and the innovation doesn't stop there.
Another particularly desirable souvenir for music fans is the ticket stub they get after going to a concert—a lasting memory they can put on their wall that says, “I was there.” Ticketmaster is now dabbling in creating NFT tickets that can serve as mementos of a memorable show, immortalized forever on the blockchain. Other forms of technology, called Proof of Attendance Protocol (or POAP) could take this concept further.
4.
What are the safeguards against fraud?
Ensuring that an asset’s authenticity, provenance, condition and ownership are verified is critical – giving buyers confidence in what they are purchasing.
Standards for the NFT industry can help in this regard. When the physical object backing an NFT goes into a vault, it is critical to clarify who has the authority to take it out again. External auditors can also be tasked with assessing the context behind transactions, and information about the status of the item can be woven into the metadata.
Above all, it is critical that NFT platforms gain a reputation as trustworthy and credible. Not only is word of mouth a powerful marketing tool, but it also reassures consumers that they are in safe hands if they purchase collectibles through one of these platforms.
5.
What if something goes wrong?
Often, disputes end up in court – but this can be a mixed bag.
It’s easy to forget that NFTs are still a nascent technology, which means the legal system still lacks an understanding of how they work. This can mean that the nuances surrounding digital assets can be missed in civil lawsuits… but those involved in the lawsuits will still have to deal with huge legal bills.
Mattereum - a new protocol that provides transferable proof of digital ownership - aims to do things differently. It provides its customers with the legal technology capabilities to create trusted NFTs for their physical assets, as well as a legally binding dispute resolution mechanism that is enforceable in more than 160 jurisdictions around the world. This smart contract creates a link between the ownership of the NFT and the ownership of the physical asset, whether it is six bottles of wine, a luxury car or a rare musical instrument.
While this approach may seem to take more time at first, it can have advantages. Providing valid authenticity documentation can significantly increase the value of an asset and improve the likelihood of a sale. It also creates a solid legal framework for the future.
6.
Discussed what challenges the NFT field will face in the future?
Mattereum will host a dedicated event on September 21st to discuss physical asset NFTs.
The party starts at 6pm London time – 7pm Berlin time, 1pm New York time, 10am California time.
The last event, held in July 2022, addressed how coveted, high-value assets such as wine, art, and real estate could benefit from Mattereum’s NFT approach.
As more blue chip companies explore this space, adoption by everyday consumers will continue to soar. Mattereum is determined to ensure that the industry stays on the right track and puts investor protection first.