The demand for a dissection between the digital and the real world has become necessary as technological adoption has increased rapidly in recent years. Phygital nonfungible tokens (NFTs) are replacing the idea that digital assets are just blockchain restricted and have no real-life representation. The primary objective of phygital NFTs is to create a real-life replica of digital assets.
Phygital NFTs are an amalgamation of two terms, physical and digital. Phygital NFTs allow blockchain developers to represent nonfungible tokens with material goods and experiences. Buying or selling any Phygital NFT means users have claimed or lost real-world representation of the token purchased or sold.
Why Do Industries Adopt Phygital NFT?
Phygital NFTs are growing rapidly amongst blockchain users. It has also seen mass adoption in real-life industries as they see it as a means of seamlessly promoting their brands in both the physical and virtual marketplace. Notable brands like Timex and the Bored Ape Yacht Club, Whiskey Barrel, Starbucks Odyssey, Cult and Rain, and Bstroy x Givenchy have all adopted the phygital NFT trend.
Industries apply these digital cum physical nonfungible tokens for a variety of applications. Some brands use the phygital experience by encouraging users to buy the NFT associated with the real-world collection. Users are then told to burn the minted NFT to access physical goods or experience.
Brands also indulge in the phygital experience by either offering customers an NFT collection when they have purchased real-life goods or providing them with an alternative nonfungible token after burning the initially acquired asset. Brands mostly use these experiences to build strong community relationships.
Phygital NFTs also have great gaming applications, as gaming companies create fun-filled experiences for customers and reward them for milestones attained. Gaming firms can also replicate characters and in-game collectibles and sell them to customers.
Do Phygital NFTs Have Advantages?
Phygital NFTs are scaling due to their high traceability. Any NFT or physical goods acquired can be traced to the first buyer, thus lowering the risks of purchasing counterfeited products in the market. This quality of phygital tokens creates and sustains authenticity and trust from customers.
The phygital experience has created new business opportunities for brands, creators, and developers. Creators, developers, and brand correlation are increasing because of phygital NFTs. With this new technology, creators can create content for brands and receive royalties. Developers can also partner with brands to create tokens for phygital experiences.
Most notably, phygital nonfungible tokens have boosted the community experience between industries and customers. Companies have now seen a new way to interact better with their user community while profiting from such connections.
Phygital or Conventional NFTs? Which is Better?
Users might argue that a physical touch to phygital NFTs gives them an edge over their conventional counterparts. However, this feature doesn’t determine the value of nonfungible tokens.
Phygital NFTs use proof of physical presence (PFP) to confirm to owners the authenticity of the assets possession. This is the same process where traditional NFTs are used to verify the ownership of digital assets.
Hence, the physical presence of phygital NFTs doesn’t make them better than conventional nonfungible tokens, as they both have advantages and disadvantages. One might decide which to use depending on the nature of the collectible being monetized.
How Bright is the phygital Future?
There are chances of massive acceptance of phygital NFTs in the future because the world is heading toward a tokenized economy. There are good NFT projects out there, and how to find valuable NFTs has become easier. The community-inclusive nature of the token is also a plus to its adoption.
However, proper handling of physical representations of the digital asset will play a huge role in its adoption. If the physical collectibles are well stored, verified, and tracked, customers will be confident in phygital NFTs and venture into it.
Phygital NFTs are here to stay, and the best part is that we are still early on this NFT type. With a clear understanding, which this article has provided, giving a go phygital NFTs wouldn’t be a bad idea.