Some time ago, NFT became popular because of luxury goods. To commemorate the founder of LV, LV developed a mobile game Louis the game. The highlight of this game is the 30 hidden NFTs. Starting from LV’s positioning, it does not need to use the “hot search” on the NFT to increase sales. In fact, it is more about market value management.
“We won’t make money from this game. It’s an irrelevant business. We basically just want to achieve the purpose of market education and accumulate some interesting, empathic and attractive experience.” Louis Vuitton CEO Michael Burke (MichaelBurke) said.
Because LV is not satisfied with only being a traditional luxury giant, it also needs to explore digital channels, and operating through NFT will undoubtedly give shareholders a bright feeling. In the past six months, the overall daily average value of “NFT” Baidu search index is 2005, and “luxury” is 1281.
NFT is a label with great hype value. Any project labeled NFT can get more attention, but when it is implemented, what benefits can NFT bring to the real economy?
NFT is an excellent distribution channel
In addition to LV, Audi released its own digital NFT on August 10, followed by Burberry on August 11. Why do so many well-known brands begin to pay attention to the NFT market?
First of all, they all need to broaden their channels to enter younger consumer groups, so they must use young people’s way to get closer. It is not wise to stick to the original consumer group, so even big brands need to broaden the consumer group. NFT and luxury goods have similar attributes, including originality, limitation and artistry, which is undoubtedly suitable for online monetization of luxury goods. channel.
Secondly, there is another special factor, which is the demand for carbon neutrality. EU countries are to achieve carbon neutrality by 2050, that is, carbon emissions and carbon absorption are equal. Therefore, enterprises in EU countries are exploring low-carbon or even zero-carbon business models.
NFT mobile games are very consistent with this principle, because the operating cost of electronic channels is much lower than that of physical channels, and there are not so many fixed asset investments. It also reduces the investment in water and electricity grids and consumables, which not only reduces customer acquisition costs, but also It can reduce carbon emissions at the production and consumption ends, which means that this is a distribution model that is in line with sustainable development.
NFT’s good home is the sharing economy?
As we all know, sharing economy projects often end in failure, such as shared kitchens, shared rental clothes, etc., because the model used is wrong, and the balance of payments cannot be achieved under “heavy investment”. This is why the country is increasingly advocating the balance of development, trying to change the situation of excessive monopoly of resources in some industries.
The “China Sharing Economy Development Report” pointed out: “Large platforms usually have capital advantages, data advantages and customer advantages. Once some small and medium-sized enterprises with development potential appear in the market, large platforms will either use equity or holding shares to support them with capital. Big and monopolize the emerging Internet market”.
In other words, the model based on small and medium-sized enterprises and individual economies is a new trend in economic development. It is mentioned in the “Fourteenth Five-Year Plan” that the role of the sharing economy in the past has not been fully utilized. It is necessary to encourage product intelligence upgrades and business model innovation. The sharing economy will usher in a new model, and it will also be implemented in local policies. Mentioned the integration with blockchain technology.
However, NFT is a good medicine for upgrading and improving the sharing economy. It can upgrade the sharing economy model to the rental, transfer and sharing of the right to use personal idle resources . To achieve transformation, three problems need to be solved: truly idle resources to replace excess capacity, sufficiently low operating costs and reliable payment systems.
1. Really idle resources replace excess capacity
Let’s look at the definition of the sharing economy: institutions and individuals with idle resources transfer the right to use the resources to others for a fee, the transferors get rewards, and the sharers create value by sharing the idle resources of others.
But apart from Airbnb, almost all merchants under the banner of the sharing economy transfer “pseudo idle resources”, which are only purchased or leased at their own expense, which is essentially excess capacity.
- The bikes shared by Harrow are made by merchants
- The clothes in the tote box are purchased by the merchant
- Shenzhou Rent-A-Car is a car purchased by a manufacturer
Regarding personal idle resources, such as cars, bicycles, computers, and real estate, NFT is undoubtedly advantageous in terms of confirming rights and identifying assets through digital identities.
The assets affixed with the NFT identity tag, whether it is the transaction of the right of use, the transfer of the physical location, and the payment, are clearly recorded in the distributed network, and have the advantage that the data information cannot be tampered with. If the management efficiency can be improved, it can bring a stable cash flow to individuals during the idle period of assets.
1. Sufficiently low operating costs
The personal-led sharing economy model requires a “light operating model”. The existing model is not suitable for individuals because it requires building platforms and laying channels, and requires high capital investment and operating costs.
One of the benefits of a distributed network system is light investment: individuals do not need to invest a lot of cost to build the system, only need to embed basic IOT equipment on idle resources, such as chips that can support signal transmission, so as to achieve intelligent management.
2. Reliable payment system
The reliability of the payment system is particularly important. Traditional payment methods have the problems of high handling fees and slow payment. Intermediate financial institutions charge high handling fees, and the payment is not real-time.
The French private car-sharing company BlaBlaCar promises that the arrival date for private car drivers is 1-5 working days. However, the use of digital currency payment through a distributed system can reduce a lot of transfer fees to a certain extent, and it does not need to go through an intermediary bank to make point-to-point payments to the counterparty’s account.
All in all, NFT applications have very good prospects in the sharing economy. In 2020, China’s sharing economy transaction volume will reach 3 trillion yuan.
Sharing economy incorporating NFT
In fact, there has been a business model that applies NFT to the sharing economy.
The Slock.it team is trying to commercialize this concept. I want to build blockchain nodes in cars, homes, home appliances and other equipment to improve the experience of sharing items. Its vision is ambitious: the goal is to solve the challenge of trusting strangers in the sharing economy and to subvert the rules of the game for institutional platforms to make money through monopoly.
Based on smart contracts, asset owners complete the binding of various locks and assets by setting rent, deposit and related rules. Through the APP, the end user pays the corresponding rent and deposit to the asset owner, obtains the control authority (key) to open the lock, and then obtains the right to use the asset.
It does capture some of the pain points of the sharing economy, including the trust between strangers and the control of rules by big platforms.
SmartKey can be said a few things really landing Block Chaining (BoT) of the project, its solutions are things connected devices, and is compatible with Ethernet Square Dapp’s.
It has already landed products such as the private car rental cooperation between Mercedes-Benz and Kia owners: through the setting of smart contracts, an NFT key can be generated to personalize the use of the vehicle, such as who is authorized to use it, the length of use, Paid to use or free, etc. It should be noted that the platform does not charge transaction commissions.
Another highlight of the program is to pay: You can pay by SmartKey, it captures the essence of the NFT: represents a unique body of any tangible assets of parts identification.
The target market not only focuses on the time-sharing lease of private property, it also combines NFT with smart cities: when an emergency occurs, any building in the city can activate the digital NFT key, and the door is automatically opened to the rescue service team. This solution Has landed in Olsztyn, a city in northern Poland.
Four aspects must be done well to achieve mass adoption
NFT can help us reshape the sharing economy, but to be better implemented and widely popularized, we need to work hard on market regulation, operability, profitability, security, and market education.
1. Market norms
Every industry needs to operate within the industry norms. For this new type of industry, a lot of content needs to be redefined: what is an “idle resource” suitable for the sharing economy. Although NFT can theoretically represent the identity of everything, not all types of tangible assets are suitable for the sharing economy.
Specific analysis should be based on the specific conditions of the application scenario, such as for personal travel tools, such as cars, bicycles, electric two-wheeled vehicles, etc., are ideal types of idle resources because they have realistic needs, high frequency of use, sufficient surface area and space for installation The IoT chip is an ideal subject of the sharing economy. In addition, we also need to study which individuals can participate and so on.
In this process, regulatory agencies, enterprises, associations, and individuals have the opportunity to participate in the formulation of standards. Only when the norms and standards are in place, can innovative development models play a role in the market.
The traditional sharing economy is “asset-heavy”. We need to think about how to “weight down” so as to have a set of “asset-light” operating models suitable for individual suppliers.
In addition, we need to consider various situations in use. For example, if there is an accident during use, how to solve the accident? Do I need to join the insurance claim link? In different actual scenarios, more complicated problems will be encountered, and detailed planning and design of different application scenarios are required.
Considering the network security issues of the ever-growing distributed systems, such as the $600 million encrypted stolen incident of Poly Network that happened before . We need a more secure system, and we must continue to improve the security of the program to prevent losses caused by hacker attacks.
4. Market education
Distributed systems and digital currency payments are still emerging markets. Although NFTs are popular, they are still only receiving attention in games, niche product copyrights, and early investment projects.
We need to spend more time to provide market education for ordinary users. In addition to the joint participation of enterprises, the whole society and regulatory agencies, it is also very important. From the implementation of technology to the implementation of the market, the key is to gain the trust of users.
Today, when the internal circulation is emphasized, it is very meaningful to explore a sustainable model that will not cause overcapacity and can satisfy ordinary individuals to increase their income.
NFT has made good attempts in confirming rights, traceability, and entertainment. Through exploration, we found that the combination of NFT and idle assets with practical value can bring greater potential economic benefits and achieve additional personal income.
How to apply NFT to the design of a new type of sharing economy, realize the realization of the value of idle resources, release economic vitality, and improve the quality of life through technology is a problem worthy of attention.
How do you think NFT can be applied to the sharing economy? Welcome to share your views in the message area.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-non-negligible-potential-and-space-of-nft/
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