If you’ve been keeping abreast of the tech world, you’ve likely heard the term “NFT” floating around recently.
An “NFT” stands for “nonfungible token.” It’s a unit of data on blockchain, which is a digital ledger. NFTs are crypto-based assets, and are, basically, digital collectible items. They’re digital files like videos, GIFs, audio files, video games, or art. And investors are spending millions on them.
Why are they so special? Why are investors snatching them up? And what should membership organizations be aware of when it comes to NFTs?
The Appeal of NFTs for Investors
NFTs are called “Nifties” by some investors and insiders. The ownership of NFTs is recorded on a blockchain, reports CNBC. Like Bitcoin, NFTs are documented in the crypto-sphere. Their specific values prohibit them from being interchanged in the same way Bitcoin is because each has its own, specific value, making them “nonfungible.” NFTs are unable to be copied or replicated; they are one-of-a-kind items. These tokens capitalize on increasing value by creating scarcity.
Similar to a rare piece of art auctioned at Christie’s, NFTs are sold in live auctions, too. In fact, Christie’s recently auctioned off an NFT from artist Beeple titled “Everydays: The First 5,000 Days.” Beeple’s NFT was created over the course of 5,000 days, and this incredible, digital-based collage was the first purely digital artwork – the first NFT – offered by Christie’s, reports the famed auction house. It sold for over $69 million.
NFTs like the Beeple piece prevent piracy, due to how they’re encrypted. This makes them a seemingly safe bet for investors — as long as there’s a market for them.
Membership Organizations & NFTs: Educate and Inform
For membership organizations, staying on top of the latest technology is not only beneficial, but it can keep you ahead of the curve. NFTs are still in an early form, with some going so far as to call them a “crypto fad,” and even a “scam.”
Regardless, it’s likely that NFTs are here to stay for a while. Membership organizations will need to know about – and understand – NFTs in order to inform their own members. For example, members may come to your organization for information and guidance. NFTs may, in the future, have the potential to affect members’ investments or digital investment portfolios, and members may look to associations to guide them or their organizations.
Membership groups should be aware of how NFTs may affect members so that when members come for information, membership organizations can provide it. For instance, AARP members may ask the AARP for information about Bitcoin. First, AARP itself needs to have a strong understanding of Bitcoin. For associations like the American Bar Association (ABA), having an awareness of NFTs is vital so that the ABA can know how to direct lawyers who want to advise their clients about these new, nonfungible tokens.
Plus, NFTs might even become a source of non-dues revenue. The New York Times made headlines — including its own — in recent days for selling a copy of one its writers’ columns for $560,000. Not a bad haul for a piece of content.
Become a Resource for Members to Understand NFTs
To start, membership organizations should understand NFTs to act as a resource for their members seeking knowledge and understanding. NFTs may also, in the future, affect content-delivering capabilities, so an association may have broader possibilities for getting content to their members. The more secure the technology, the more important it may become.
Think of it this way: 20 years ago, the idea of signing a document on a computer to buy a house was unimaginable. Today, because online signatory capabilities are so secure, it’s a commonly used and accepted practice. Secure digital personas will affect how members interact with the world: Job markets, receiving money, purchasing digital files, so member associations will need to know how to interact with those digital personas and deliver content.
Membership organizations also serve as advocates for their members, so associations will need to know how to advocate for people who feel like they’re not digitally savvy when it comes to emerging tech like NFTs. Associations serve as the conduit for understanding and helping members understand how NFTs might affect them.
How NFTs are Changing the Digital Game
“Nifties” are changing the game. And, as a result of the pandemic, the NFT market exploded due to stay-at-home orders and people spending more time online. “Many investors are buying them as a speculative investment, hoping to flip them for a much higher price than they originally paid,” reports CNBC.
In many ways, it’s still too early to predict how NFTs will impact the world. For membership organizations, understanding NFTs so that you can inform, educate, and act as a resource is the most important thing right now. Members look to associations for guidance and service. By understanding NFTs, you can provide both and create added value for new and existing members.