Beyond Art: How NFTs Are Powering Digital Identity and Brand Loyalty

The Problem of NFT Identity: An Introduction

The JPEG Story

The first thing that comes to mind for most people when they think of NFTs is a JPEG of pixelated art or weird monkeys that sold for millions of dollars. This doesn't seem like a trend in technology; it seems more like a fantasy. The NFT craze was fun at first because it was a mix of new ideas, greed, and creativity. Then the change happened. Prices fell a lot, projects stopped, and most people thought NFTs were just a passing trend.

That story is true, but it's not the most important part of the NFT story. NFTs were never just things to keep. The JPEGs were a shallow way to show something much more important than JPEG art: a new way to show digital information, ownership, access, and identity. The truth is that NFTs are no longer just collectibles; they are now infrastructure.

NFTs: Not Just Rare

NFTs will be worth more than just how rare they are and how much people think they are worth. They will be worth more because they can be used as digital access keys, ID cards, and membership keys. They are more than just things to collect; they are a way to get into the new digital economy, where your wallet is your passport.

These are the main parts of this break:

• You can show that you own every NFT because each one is a one-of-a-kind digital asset.
• Token-Gating: NFTs let you see and do things that only you can see and do.
• Digital Membership: NFTs let brands stay in touch with customers for a long time.

It's not about getting things; it's about being a part of something.

NFTs as the Building Blocks of a Digital Identity (The Main Point)

Ownership that Doesn't Change and Can Be Shown

No one can change the record of who owns each NFT. You can show that ownership hasn't changed because it is stored in a blockchain. If you use standard Web2 logins, your identity may be stored in company databases. A Web3 identity is unique.

For example, Web2 lets you rent your identity. You used Facebook or Google to log into someone else's account. You own your own identity in Web3. Your NFTs are proof that you own them, and your wallet is the key.

This isn't just a thought experiment; it's real life. You don't have to log in or be stuck in a central database to own something with NFTs. You now have the information you need to access portable data.

The Idea of Self-Sovereign Data

NFTs also bring up a new idea: data portability. You don't have to worry about logging into every new platform and rebuilding your reputation anymore. Your NFT identities will be stored separately and will always be yours.

You can have a digital identity in NFT format that shows your achievements, memberships, and even things like your rights. This is your data. You didn't just own your account; you also had the rights that came with it.

Getting People to Stick With Your Brand in the Future

From Points to Persistence (NFT Membership)

Loyalty programs that are the same for everyone don't work. They are weak, centralized, and don't work very often. Points run out, prices go down, and customers get stuck in systems that don't let them out.

You can always keep your membership and move it with an NFT-based loyalty program. It's not just a number in a database anymore; it's something you own. It is safe, can be moved, and can even be traded. You can make rewards more flexible, and they depend on how engaged and important someone is. Loyalty is no longer just "points for buying." It turns into a real relationship that grows and changes over time.

A Look at What Starbucks Odyssey Is All About

The idea for the Starbucks Odyssey is a great example of how things can change. Starbucks has made "Stamps" out of NFTs that show how much you care, what you've done, and what you collect. Coins are more than just digital badges; they are interactive tokens that let you do things like go to new events, buy things, and earn rewards.

This makes loyalty more like a game than just a way to get to know a brand. Users feel like they are in charge of what they do instead of just following a marketing funnel. Going from loyalty based on transactional value to loyalty based on emotional value is a big deal, even though it's a small change.

An Example of Nike's .SWOOSH

Another well-known example is Nike's .SWOOSH. In this case, NFTs are like digital clothes and shoes that you can find in a lot of online worlds, like video games and the metaverse. NFTs are more than just things to own. Nike uses them to let people buy special items that not everyone can get.

Key principles Nike follows:

• Let your customers help you make it.
• Give people a way to own things in both the real world and the online world.

This isn't "advertising." It's making something as a group. Customers are more than just people who buy things; they help the brand grow.

The Future Landscape: How to Govern and Work Together

Loyalty to a Brand and the Ability to Build on It

The next step in using NFTs is to get them to work together. Imagine that your Nike NFT not only gives you prizes, but it also collects them while you're at a concert in the metaverse. Or that you can get a discount at a Republic Coffee event if you have a Starbucks NFT.

This is when NFTs change from being just a brand to something else. As a group identity layer, they will start to work together, and doing business in one environment will make another ecosystem more valuable. Thanks to blockchain standards, brands will be able to work together in different digital spaces without having to keep all of their data in one place.

Governance with Tokens: The Change from Consumer to Co-Owner

NFTs are also helping brands work together and share power. People are becoming more involved in things instead of just being passive consumers. Brands can give out governance NFTs that let customers vote on things like how to get involved in the community, what products to sell, or how to advertise.

This will make a governance framework called "tokened-gated governance," which will make customers partners. It will also give loyal models of loyalty more than just special chances.

The Infrastructure for Technology

To make this vision bigger, you need a strong infrastructure. Layer 2 networks like Polygon, Arbitrum, or Optimism make it easy to buy and sell a lot of NFTs for a low price. They let you offer loyalty rewards and small memberships for a low price. Layer 2 networks and other scalable solutions are what make NFTs useful for more than just expensive art.

A Summary of the Reframe: NFTs Are a Protocol, Not a Product

NFTs aren't things you can buy; they're more like rules. NFTs are a digital standard that are supposed to help people trust each other, own things, and work together in the digital world.

When a business sees NFTs as part of its infrastructure, they become rules for a decentralized identity and a new way for brands to talk to customers. Users have real control over their data, and brands are more open, which helps them build long-lasting relationships.

The real breakthrough of NFT technology is not art, but freedom. When you are free to do so, you can bring your identity, your things, and your community with you on your journey through any digital world.

Brands that understand and adapt to this change will not only get more customers, but they will also build communities that join them on their journey.

 

This article is contributed by an external writer: Jocelyn Hamoy.

 
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