When I bring up NFTs around my Gen Z teenagers, they start coughing. Exaggerated, wheezing coughs, as if they’d just stuck their heads in a coal plant smokestack.
It’s snarky teenage shorthand to signify intense hatred for non-fungible tokens. They have been taught in school — and reinforced in copious online hangouts with friends — that NFTs cause pollution and accelerate climate change.
Gen Zers aren’t alone in their animosity toward NFTs. A survey of 2,000 consumers by CX vendor Tidio revealed that 60% of people, regardless of age, think NFTs are a scam, with 82% of Gen Zers feeling that way. Mashing up that research with informal chats with attendees at last week’s HubSpot Inbound, it’s safe to say that millennials pretty much agree with Gen Z. Gen Xers and baby boomers don’t really see value in digital goods in the first place, let alone get into the political ramifications.
If you’re looking for more proof that people recoil at the mere thought of NFTs, look no further than Salesforce: Earlier this year, more than 400 employees protested the release of the company’s NFT Cloud.
So why would tech vendors go all-in on NFTs, such as Salesforce or NFT.Kred, a company that evangelizes NFTs as a legitimate marketing tool for SMBs and that bought a booth at Inbound? Because they believe that there are business drivers behind NFTs that have nothing to do with collectibles, auctions or cryptocurrencies.
These forward-thinking companies believe that NFTs will eventually be used as a single source of truth for a customer’s data, backed by new, eco-friendly blockchains. This logic was somewhat validated on Monday, when Starbucks launched Odyssey, an NFT adjunct to its Starbucks Rewards customer loyalty program. Luxury leather brand Coach has also experimented with selling limited-run NFTs to its customers, as well as handing them out to its Insider club members. The Gap has also done it.
Noah Eisenbruch, product manager at NFT.Kred — which produces the NFT.NYC conference — at HubSpot’s Inbound 2022 conference last week. He says NFTs have utility far beyond the speculative secondary collector market.
Thought of this way, NFTs could power all sorts of everyday things, such as next-generation customer loyalty programs, event tickets, health club memberships and even real estate property deeds, these optimists believe. Such NFTs would be distributed for free or as part of a service package. On the blockchain, it’s harder to counterfeit documents.
Some companies, including SAP and tech consultancy PwC, have also experimented with NFTs to gamify digital certifications or awards that employees can earn for trainings, said Noah Eisenbruch, product manager at NFT.Kred. People who attend NFT.Kred’s company events gain entry with — you guessed it — an NFT. His company’s pitch to Inbound was that NFTs can be used to build customer communities and empower them to become brand ambassadors.
“We’re not really in the digital collectible NFT game,” Eisenbruch said. “We’re in the utility game.”
Last year’s model
If it were still 2021, the haters would be correct — and supremely righteous — in their disparagement of NFTs. NFT proponents get lumped in with misogynistic crypto bros, who collectively comprise what has been termed “the internet’s most annoying archetype.”
It’s also hard for the average person to relate to the secondary auction market of NFT collectibles and artwork, where people speculatively bid mind-blowing sums for what is essentially an arrangement of pixels parked on a blockchain.
American artist Beeple saw a work sell for $69 million. Noah Davis, who facilitated that sale, went to work for Yuga Labs, an NFT developer that runs the Bored Ape Yacht Club and CryptoPunks. Davis is connected to a majority of the top 10 priciest NFT sales.
With that in mind, we can pardon the boomers, Gen Xers, millennials and Gen Zers for coughing at the mention of NFTs. This is not our scene. Too much money spent on nongoods whose value is artificially pumped up by internet hype generated by NFT “brand managers” such as Davis. And the environmental concerns are no joke. When they’re on the Ethereum blockchain, NFTs’ environmental impact is indisputably toxic. In fact, the two biggest blockchains would rank 27th in energy consumption combined if they were a nation — more than countries such as Norway, Egypt and Sweden.
That perspective, though, is so last year.
Marketers: Rethink your stance
The main reason that NFT technology has a chance to reform its reputation is the rise of eco-friendly blockchains that use very little energy. Solana is a popular one; Starbucks Odyssey is built on another, Polygon.
Marketers, however, don’t change overnight. NFT proponents have a steep uphill climb into headwinds of collective, intergenerational loathing of the technology. We all probably can agree that the loathing is somewhat justified, considering the original NFTs were on the energy-guzzling Ethereum blockchain. One artist among a particularly vocal group on Twitter once characterized NFTs on Ethereum as “an ecological nightmare pyramid scheme.” Add in the whole crypto bro guilt-by-association, and people are understandably down on NFTs.
Anything that can be tokenized as an NFT should be. Noah EisenbruchProduct manager, NFT.Kred
Even when setting all of that aside and taking into consideration newer, eco-friendlier blockchains, there’s just not a lot of mainstream interest in NFTs, judging by the tenor of conversations with marketers, analysts and even the typically ebullient HubSpot executive crew at the Inbound conference.
But that isn’t going to stop Eisenbruch and his fellow NFT advocates from evangelizing what could become the next wave of customer loyalty platforms — if it hasn’t already. NFTs used for exclusive club memberships or rewards accounts put consumers in control of their stuff, he said. They help consumers protect their investments by giving them the ability to resell things they don’t want anymore.
“We’re going to be using NFTs more in our day-to-day life,” Eisenbruch said. “Smartphones became a utility very quickly, and now it’s a tool that none of us can live without. I think the same thing is going to happen with NFTs because of their programmable and decentralized nature. That’s why I believe anything that can be tokenized as an NFT should be.”
Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service and enabling technologies for TechTarget.
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