Many people believe the key to mass adoption of web3 is it being hidden from plain sight. Just one example of blockchain technology being used for recognisable processes is rewards schemes and loyalty programmes. NFTs are less scary when they’re tucked behind loyalty cards.

NFTs and blockchain technology can seem intimidating. The barriers to entry appear high, and the knowledge specialist. There’s a popular belief that NFTs can be popularised if used incidentally for familiar schemes, rather than being the star of the show. A prime example of this is the loyalty programme.

NFTs shot into the limelight last year, with the rise of celebrity endorsed JPEG tokens, like Bored Ape Yacht Club. These seeming vanity projects sold for unbelievable amounts of money. Former CEO of Twitter, Jack Dorsey’s first tweet sold for $2.9 million last year. And yes, it really was just a tweet – no magic powers, no hidden gems. Earlier this year, the very same NFT version of the tweet went on sale at auction for $48 million. In the end, the highest bid offered was £280. That’s a nosedive in value of over 99%.

Lately, Justin Bieber suffered the same fate when his BAYC NFT was revalued at $71,500 (he paid $1.3 million for it last year). Stories like this are, understandably, enough to put anyone off wanting to invest in music NFTs, or any kind of NFTs. The thing is, though, it’s widely misunderstood that all NFTs are digital collectibles.

In fact, NFTs are a broader technology. A variety of practical uses can be attached to them, and are so much more than just profile pictures.

Table of Contacts

What Is an NFT?
NFTs & Assets
Making Web3 Accessible
Starbucks NFT Loyalty Programme
Why Web3, Anyway?

What Is an NFT?

It’s probably helpful, if you weren’t already sure, to clear up what exactly an NFT is.

We’ll assume you have no previous knowledge or ideas about NFTs or blockchain technology. After all, that’s what this article is all about – the adoption of NFTs without an in-depth knowledge of them.

An NFT, or non-fungible token, is a token that exists on the blockchain. A blockchain is a digitally distributed ledger, by the way. NFTs, at their core, act as authentication of ownership. Speaking purely literally, an NFT is a string of code made up of letters and numbers. This code is completely unique, hence the “non-fungible” part. This means one NFT can’t simply be swapped for another.

But, what about NFTs that look the same? It’s true that you can buy a digital artwork NFT, and someone else can buy another one, identical in appearance. But, the string of code attached to each digital artwork – the code that sits on the blockchain – will be different. This differentiates one unique NFT from another, no matter how similar the assets appear.

And that’s what makes the potential of NFTs so interesting and exciting – the assets attached to them.

NFTs & Assets

Digital artwork and collectibles are an iteration of NFTs that most of us are somewhat familiar with. Fairly notorious, these types of NFTs are, it’s fair to say, largely responsible for the divisive reputation of NFTs in general.

They cost lots of money, and don’t do that much to make it worthwhile. That’s what people are catching onto now, hence the plummeting prices. It might look like a disastrous time for NFTs. However, it’s actually a very exciting time full of opportunity. No, we’re not delusional, let us explain…

With JPEG NFTs tanking so spectacularly, it’s the perfect time to look at the other ways NFTs can be used. Additionally, it’s a great time to examine how NFTs are valued.

When someone says an NFT has utility, they mean the NFT has a practical use attached to it. Examples of this are NFT tickets, NFT birth certificates, an NFT loyalty programme, or NFT real estate. Buying houses on the blockchain is much faster, and the fees are significantly lower. An NFT house sale earlier this year proved that people can look past the novel aspect of NFTs, and pay only the value of the asset attached to it.

Productive assets can be attached to NFTs, making them even more valuable because they work for you. Our favourite example of this is music streaming royalties. At Fractis, you can buy NFTs that represent a share of a piece of music’s digital streaming royalties. Not only do you get to own a slice of your favourite music, but you can earn revenue on a monthly basis. Passive income is glorious.

Making Web3 Accessible

The secret to helping any new technology become widely accepted is ease of use. A lot of people will say that they won’t use NFTs because they don’t understand them. Whilst it’s wise to know what you’re dealing with before diving in, how many of us can truly say we understand how the internet works?

Lots of companies, in the last year or so, have focussed on developing programmes or features that incorporate NFTs and web3 processes in a way that the user wouldn’t necessarily realise.

Side note: Web3 is the version of the internet that features decentralised applications and platforms, created on the blockchain. It’s also referred to as the “read, write, own” version of the internet. We’re most familiar with web 2.0, the “read, write” version.

Instagram is aiming to take web3 mainstream. The social media company revealed it would be making the creation and trading of NFTs available directly on its platform. Bringing NFTs to the 500 million daily active users of Instagram could certainly help with mass adoption. But, these are non-productive NFTs, just tokenised images and videos. With the dropping value of similar NFTs recently, this new feature might not help the cause of NFTs all that much.

The sale of real estate and the investment in music royalties are brilliant examples of practical NFTs. But, do we need something even more every day and straightforward to bring web3 to the mainstream? Starbucks seems to think so.

Starbucks NFT Loyalty Programme

World-famous sellers of bean-based caffeinated drinks, Starbucks, have recognised an opportunity to incorporate web3 practices in their customer experience.

The loyalty programme, dubbed Starbucks Odyssey, is set to arrive later this year. Just like a regular loyalty programme, customers will be able to collect stamps to eventually become eligible for perks. The difference is, these stamps will be in the form of NFTs.

Accumulating these NFT stamps will result in people becoming eligible for bonus rewards, including merch, interactive experiences, and invites to special events. Starbucks has teamed up with Polygon for the initiative. This blockchain’s fast speeds, low fees, and carbon neutrality make it a seamless and user-friendly option.

Throughout developing this new rewards scheme, Starbucks has avoided using terms like “blockchain” or “NFT” too much. The idea is that only those who took a look behind the scenes would realise that sort of technology was being used. Participants won’t even need their own wallets to store NFTs and rewards. The coffee giant stated that it aimed to create a new way for customers to connect over unique and exclusive experiences.

With so many of us getting paper loyalty cards stamped, so we can claim a free coffee, will the step towards a NFT-based loyalty programme feel as natural?

Why Web3, Anyway?

You might be wondering, what’s the point in all this? Why are people and companies so keen to push web3 practices and make NFTs a part of how we do things?

There are a number of advantages to web3. We’ll explain why Fractis is built on the Solana blockchain, and why music investment is best done with NFTs.

  • Accessibility – The blockchain is globally accessible. That means there are no complications based on where in the world you live. You can invest and trade freely, whether you’re in the UK or the North Pole.
  • Speed – Solana is one of the fastest blockchains you can trade on. You won’t have to wait several working days for money or NFTs to transfer from person to person.
  • Affordable – The transaction fees, or “gas fees” on Solana are lower than most. This is thanks to the high transaction speed.
  • Control – When you buy or trade NFTs on Fractis, and most blockchain projects, the revenue goes directly to the creator. That means no middlemen taking unreasonably large cuts.
  • Support artists & creators – With revenue going directly to creators, a healthier ecosystem can be developed in creative fields. Independent artists, especially, will have a fairer chance at a fruitful and fulfilling career.
  • Transparency – Know exactly who is investing what. No question marks on how things are run, no being left out in the cold even though you’ve invested your hard-earned money.

Whether it’s music royalties NFTs or loyalty programme NFTs, the mass adoption of web3 spells a fairer and more transparent way of doing business. Sure, it might seem like a tough time for NFTs, but there’s actually never been a better time to get on board with web3 ideals.

Sign up to Fractis today, and be among the first to make music investment better and fairer.