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Issue # 29 - Our “Ah Ha” Moment about NFTs
Mike headed from Money 20/20 to Lisbon for WebSummit which had over 40,000+ attendees, and the Solana conference which had untold thousands. Looks like conferences are back.
Fun Facts: Portugal has a higher COVID-19 vaccination rate than any other country in the world, and there’s no personal income tax on crypto-currency capital gains.
CoinTaxList: Is Portugal really a Tax Haven for crypto?
Why Financial Institutions Should Pay Attention to Non-Fungible Tokens (‘NFT’)
The other day my brain exploded because I finally understood why NFTs and DeFi are so important to financial services.
If you’ve heard of NFTs then you know they have something to do with blockchain and crypto-currencies, and folks are paying millions for random pieces of digital art.
Dextero: Top 10 most expensive NFTs ever sold
Many also know that VCs are investing heavily in NFT startups, even faster than with Fintech.
BNY Mellon: Venture Capital Investment in NFT
But many ask “If these digital works can be easily shared and re-shared to anyone at any time for free, how is that a good investment?”
Here’s our take:
NFTs are a trackable, shareable and secure digital way to authenticate physical assets. Having information from a digital certificate, warranty, or deed stored on a blockchain, it both reduces the risk of fraud, and removes the middle men that try to take a piece of the pie or get in the way of a transaction.
This capability is mission critical to driving value from data rich payments. It increases the speed and lowers the cost of financial transactions for physical assets.
Here’s two great summaries:
World Economic Forum: If data is the new oil, then enterprise NFTs are the tankers
Here’s the example that opened my eyes:
Luxury goods manufacturers are issuing NFTs to authenticate their products at the time of sale. This lets them sell insurance policies at the point of sale, and set up online marketplaces for resale of authenticated goods, not to mention facilitate communications between owner and manufacturer without the use of email or other personal identifying information.
Here’s some other examples to get you thinking:
American Bar Association: Non-Fungible Tokens (NFTs) as Art Loan Collateral
WinstantPay: Accelerating trade with NFTs for LCs
Real Estate: Could you imagine closing a real-estate purchase without closing paperwork or title companies?
Entrepreneur Magazine: How NFTs Could Change Real Estate
If you have thoughts or questions to share on this series, please leave a comment.
These musings on the developments in data-rich payments are assembled by the team at 20022 Labs. See more issues and subscribe to get updates in your inbox.