The NFTs Attribute Matrix
Understanding why NFTs are a superior technology for specific use cases
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Let’s analyze how the relationship between NFTs and brands can evolve over the next few years. To do this, we can start by looking at how we got here.
During the first decade of the commercial internet, which lasted approximately between 1995 and 2004, most brands were still adapting to this new technological paradigm. The word of the day was Commerce.
We had the birth of the first e-commerce platforms, the first CRMs, and marketplaces, which brought a new form of relationships between consumers and brands and new shopping experiences. Suddenly, buying through a website started to become a reality for millions and millions of people. Here, online brand building was basically done through online sales and communication was one-way.
In 2004, with the launch of Facebook, the most influential social network in the world, we had the beginning of a new era, enhanced in 2007 with the launch of the first iPhone. Social networks and smartphone capabilities have ushered in a new era, this time with Connection as the watchword.
Users have become consumers and content producers. Communication between brands and consumers was no longer done only through large mass vehicles and unilaterally.
The hyper-connectivity brought by mobile, social networks and user-generated content has dramatically increased the number of possible touchpoints between brands and potential customers. Here, brand building is done through content, sales and other forms of marketing and communication have become more two-way.
Now, with NFTs, we will see the real creation of online cultures emerge. We already have this growing trend since the emergence of the first social networks, online communities and online games, but NFTs are the perfect technology to take this to a new level because of their fundamental characteristics of providing blockchain-based ownership.
Here, brand building is done through content, sales and other forms of marketing, but it’s no longer being built to customers, but with customers, with a multilateral communication.
Let's take a look at one of the Oxford dictionary definitions of "culture":
“The arts and other manifestations of human intellectual achievement regarded collectively.”
Read that last sentence again. Regarded collectively. Culture is a collective construction.
And this kind of collective construction was already possible in previous eras - Commerce and Connection - but it will be massively scaled up with the help of NFTs. Internet-based Culture. Not because of speculation. Not because there is hype around NFTs, but simply because they are a technology that, at its core, has superior characteristics to previous ones in terms of ownership, scale, access, breaking down geographic barriers and more.
Take Batman, one of the most beloved fiction heroes of all time. DC Comics, one of the subsidiaries of Warner Bros., announced the launch of a collection of NFTs called Bat Cowl, with a supply of 200,000.
According to the company, the idea is that token owners can vote on story development, character creation and development, in addition to having access to exclusive merch.
NFTs can leverage the relationship between brand and users. A superior technology for ownership, with specific attributes, that can serve as a pass to choose how the story and franchise will unfold.
To understand exactly the superiority of each of these attributes, let's analyze the NFTs Attribute Matrix.
This matrix is composed of 5 elements that refer to attributes presented on NFTs. These attributes are not necessarily unique to this technology, but when put together and within the context of the blockchain, they make NFTs a superior technology for creating new products and communities.
These 5 elements are:
Ubiquitousness;
Verifiability;
Association;
Composability;
Integration.
Ubiquitousness refers to the property of NFTs to live on blockchains, which by design already gives them a near-universal status, as they can be accessed by virtually anyone. Dependence on local providers and gatekeepers decreases - although not necessarily extinct - which significantly increases market potential.
Verifiability refers to whether we can verify the ownership and transaction history of a particular item. As they are recorded on the blockchain, NFTs are a superior way of verifying whether a particular person actually owns an item and what the transaction history of that item is. All this is stored, with values, wallets, days, and times and can be checked at any time, which drastically reduces the need for third-party intermediaries.
Association refers to the superior ability of NFTs to be a central point of association between users and brands, as NFT ownership can confer certain perks to the user, such as exclusive access, exclusive content, periodic airdrops, and so on.
Composability refers to the fact that NFTs have smart contracts at their core, which allows basically anything about them to be programmable. Imagine, for example, that your brand has developed an NFT as a reward and loyalty system for the user and that he must perform a certain action for 90 consecutive days for his reward to be released. It is easily programmable to insert into the code of this NFT that it will be destroyed if the user breaks this consecutive sequence of actions. Another important point is: Smart Contracts provide Permissionless Innovation, that is, anyone, anywhere can innovate and create new things from that without necessarily having access to an API from a centralized company.
Many users have difficulties in visualizing the real potential of composability. Gated Commerce and Gated Content are just a few of the possibilities. Your brand can create a store or a piece of content exclusively for holders of certain tokens. And you can think something like: "Okay, but today I can already make this type of gated content using emails and other platforms, for example".
And you are 100% correct.
One of the great powers of composability comes precisely from the fact that you can reach other users besides those who are already in your base. Your brand can, for example, create a store or exclusive content for people who have NFTs from collections similar to your business.
And you don't need to ask them or any API for permission for that. If tomorrow your brand wants to create a gated commerce that can only be accessed by people who have a token from the 10 largest collections by volume on OpenSea, you can. Composability then brings a new form of interaction between brands and the potential for brands to reach new communities in a way that was not possible before.
If Web 1 was about Customers, Web 2 was about Customers and Fans, as it was based on mobile and social media. Web 3 will also be about Customers and Fans, but will add Community to this equation.
Finally, Integration refers to the ability of NFTs to connect with other instances of the new internet, such as DAOs, De-Fi, tokens, and crypto in general. As they are natively created in this new world, it is not necessary to create or plug them into legacy systems for these integrations to happen.
Note that in the two previous eras of brands on the internet - Commerce, and Connection - some of these characteristics were already present. But this new era, marked by Culture, brings precisely a capacity for creation and coordination on a scale that was more expensive and difficult in previous eras, as there was a lack of a technological instrument that would encompass all these attributes.
Because of their intrinsic attributes - Ubiquitousness, Verifiability, Association, Composability, and Integration -, NFTs mark a new phase where brands can not only make commerce and connect with their users on the internet, but build real cultures together with them.