The hashtag “#NFTcommunity” is trending, and the buzz is spreading into the event industry. The acronym “NFT” stands for “non-fungible token,” and it is essentially an online (blockchain) record that represents ownership of a digital asset — usually an image or a video clip, but theoretically anything in the digital sphere. NFT traders are generally not exchanging copyright, but instead the idea of ownership. The NFT itself usually does not contain the digital object being “purchased,” but instead a link to it.
Despite the abstract nature of NFTs, the interest in them is very real, and the event industry is paying attention. As the global capital (and status) value of NFTs skyrockets, we’re starting to see ideas pop up in the online world about how event professionals can harness the excitement they’re generating to promote engagement and build community.
Some have suggested that it’s time to start incorporating NFTs into ticketing solutions, swag bags, and several other novel use cases in the industry. To examine the practicality of these ideas, we take a closer look at the hype around NFTs and how (or if) event professionals can put that excitement to work for their organization, clients, stakeholders, and attendees.
How Do NFTs Work, and Why Do They Cost So Much?
In some ways, NFTs are an extension of the thinking behind cryptocurrencies like Bitcoin. NFTs and cryptocurrencies are both part of blockchain technology, but while individual units within a cryptocurrency are mutually equivalent (one Bitcoin is equal to any other Bitcoin, much like one USD is equivalent to any other USD), NFTs are not equivalent to one another. This is where the “non-fungible” part comes into play — it means they can’t be traded for one another in a one-to-one way.
NFTs are a bit more like stocks than they are like currencies. And much like stocks, they are attracting speculators with big wallets. But does that mean the event industry stands to make money by getting in on the game?
NFTs as Collector Items Driven by Celebrity Power
It’s hard to ignore the buzz, but it’s also important to understand the reason why some NFTs are fetching millions of dollars.
In the last week, for better or worse, NFTs are being brought up a lot more than the fun fact that a group of apes is called a “shrewdness.”
This is probably because a shrewdness of bored yachting apes (or rather, the digital artwork depicting them) is currently trading for huge amounts of money, with Justin Bieber, for instance, dropping nearly $1.3 million last week to join the Bored Ape Yacht Club.
Bieber doesn’t control the digital art depicting his particular ape. Anyone on the internet can view his and many of the 10,000 slightly different versions of the image — you can even screencap one and bring it to your own digital home. As mentioned earlier, NFTs do not confer copyright unless a special deal is arranged.
Instead, what Bieber and other notables like Jimmy Fallon, Tony Hawk, and Serena Williams have paid for are non-fungible tokens that prove they are the sole owners of the original digital images, even if they have no control over who views or re-publishes their particular apes.
In pure tech-speak, an NFT is a chunk of unique blockchain code connected to specific digital files, which allows the person who owns it to demonstrate that they own that original file, and which therefore distinguishes their “original” digital file from other digital copies of it.
How NFTs Gain Value
In NFT-jargon, the term for creating an NFT is called “minting,” and it must be done on an NFT platform.
If conference tickets or branded swag-bag mementoes are minted into NFTs, will they also grow exponentially in value? To answer this question, it makes sense to think carefully about the factors driving up the value of art-based NFTs.
The inherent value of any new piece of digital art is theoretically zero, but if the creator were to mint it as an NFT on a marketplace like Rarible, they might be able to sell it to someone who values it so much they believe that owning the “original” would be a sign of status worth paying money for — or alternatively that its resale value might be even higher. (It is, in fact, possible for someone to set up more than one account on an NFT platform, and then anonymously buy their own NFTs to drive up the value.)
An NFT is largely accepted as stable proof of your individual ownership of a digital asset, which explains why right now most of the very high-value NFT transactions are coming out of the global art market. There’s social clout involved in that ownership — owning an authenticated Vincent Van Gogh painting is a very different sign of status than owning a print of it, or even an impeccably accurate physical copy. NFTs are a technology that theoretically makes this kind of ownership possible for digital art.
How the Global Market for High-End NFTs Is Growing Exponentially
The market for high-end NFTs is in some ways self-perpetuating because the higher the dollar value associated with owning one, the more status it brings.
It is in part for this reason that the global market capitalization of NFTs is growing exponentially. In 2018, the total value of the market was 40.96 million. At the end of 2020, it was 338 million. At the end of 2021, it was estimated at 40 billion.
A lot of this value is being driven by the high-end art market. For instance, in March 2021, digital artist Beeple sold a single piece of digital art through Christie’s Auction House for an eye-watering $69 million. There are now thousands of artists hoping to cash in on the trend, minting NFTs for digital pieces that they sell on marketplaces like OpenSea (the oldest and largest peer-to-peer NFT marketplace), Rarible, Nifty Gateway, and SuperRare.
It’s important to note, however, that just like many paint-and-canvas artists struggle to make money off their work, those minting NFTs are in no way guaranteed to see the kinds of returns that Beeple has. With this in mind, event organizers should ask themselves: Does an NFT conference ticket have any hope of holding the same cachet as high-end NFT art?
The Buzz Around NFTs in the Event World
As more and more investors become interested in their potential value, the use of NFTs is expanding out from digital art to other collector markets and asset fields.
Most, however, are associated with big-name brands or celebrities. For example, Nike introduced CryptoKicks in 2019 to help combat the counterfeit shoe market. And as of February 2021, the market value of NBA’s TopShots, a marketplace for collectible digital videos of excellent moments in basketball, had seen over $230 million in business.
With that said, some other applications point to forms of ownership that could lead to business opportunities beyond mere bragging rights and resale value. More recently, the trade of NFTs as deeds for land and other virtual properties and assets in the metaverse is picking up steam.
Many are forecasting that the event industry is next. As event tech becomes an inseparable aspect of events in general, there’s increasing interest in integrating NFTs into the suite of features that can promote attendee engagement on digital platforms — both during and after events. There are a few use cases specific to event planning.
NFTS as Swag Bag Gifts
One of the most talked-about use cases involves providing NFTs as gifts to event attendees.
In 2019, Consensus (an annual conference of cryptocurrency and blockchain enthusiasts) presented their attendees with an NFT swag bag that combined tokens that were “good for” physical objects like t-shirts and for digital assets like CryptoKitties. Given that the average price of a CryptoKitty in 2019 was about $65, and in 2021 was $256, it’s evident that swag-bag NFTs can sometimes become collectibles that increase dramatically in value over time.
This application had its mainstream debut during last year’s Oscars, when the Academy partnered with NFT marketplace Rarible, AdVenture Media, Taillard Capital, and Metaversal to present award winners with NFTs for digital artworks.
In both cases, however, the NFTs were from collections or artists who already had some form of name-recognition value. A swag bag stuffed with NFTs based on sponsor logos may not see a surge in value post event.
NFTs as Tickets
Another possibility is the use of NFTs for ticketing. Companies like Leeway Hertz have branched into offering NFT ticketing protocols, which can be particularly useful for events where fraudulent tickets can cause problems (think high-demand concerts prone to unscrupulous scalpers).
A physical ticket is much easier to copy than an NFT, and as the company argues, using NFTs makes it easier to integrate different food and drink options into the ticket price. Because it’s nearly impossible to counterfeit, an NFT can also provide a way to verify the authenticity of a digital ticket if it were to become a collector’s item. Since NFTs can also incorporate rules around resale within the blockchain coding, event organizers could either allow ticket holders to transfer their pass to someone else in advance of the event — or not.
Another claim is that NFTs might make it easier to update attendees about changes to event information as it happens, a utility that is especially important in pandemic conditions.
Finally, NFT-based tickets for exclusive experiences can be integrated into gamification at hybrid events.
Is the Hype Real?
As of yet, most of these use cases are untested, except in fairly rarified waters like the annual Consensus conference. So, let’s take a closer look at some of the potential pitfalls of incorporating NFT tech into event design.
The first, and most obvious hazard, is what might happen if NFTs are incorporated into events just for the sake of “cutting-edge” optics. It’s safe to assume that conference attendees who are still getting used to digital and hybrid platforms might be a bit perplexed — and possibly even a bit frustrated — to be confronted with yet another type of technology without good reason.
In the section below, we take a critical eye to some of the claims being made about the benefits of NFT tickets and swag.
Creating More Sophisticated Ticketing Systems
In terms of ticketing for events, many event tech platforms already have sophisticated registration and profile-building features built-in, which at this point would not be substantially enhanced by creating NFT tickets.
Transferring Tickets
When it comes to the notion of ticket holders transferring their pass to others, it’s important to remember that a conference or industry event is quite different from a concert. The sense of community and exclusivity at industry events is built through curating the list of who’s invited, and by who is engaged enough in the field to make the commitment to pay for a pass — not to mention taking the time to register under their own name and professional credentials.
For these reasons, the idea that NFTs could make it easier for ticket holders to transfer their passes does not make much sense in the context of business events. For most industry, education, and trade-show events, the secondary market for tickets would be pretty negligible. NFTs could even risk making the registration process more complicated than it needs to be for anyone buying a ticket off someone else.
Protecting Against Fraud
Similarly, while NFTs are a useful technology for preventing a shady market in potentially fake tickets, this isn’t necessarily the context that business event organizers operate within. Trade shows simply do not sell out in the way that David Bowie concerts did.
Creating Valuable Collectibles
While it’s possible that some attendees might hold on to their passes from particularly meaningful conferences as keepsakes, their personal significance doesn’t necessarily mean there’d be a market for them as either physical or digital collectibles.
Finding Cost Efficiencies
In terms of reducing registration costs, while platforms like EventBrite do take a cut of ticket sale proceeds, that does not necessarily mean that using NFTs would create better value for clients. This is because NFTs cost “gas fees”: Charges associated with both minting and selling a token, which can fluctuate quite unpredictably even within the same day. In some cases this might present savings, but that can’t be guaranteed, and the unpredictability in budgeting for ticketing and registration costs could cause significant friction for clients.
Even at their most affordable, NFTs are not an inexpensive ticketing option. As of December 2021, the minimum cost associated with minting a single NFT was approximately $70 USD.
Collecting Data
In addition, by using NFT ticketing instead of registration functions that are integrated into a hybrid event platform, event organizers could lose out on the benefit of using an event platform that tracks attendee data analytics.
Ensuring Better Security
NFTs can be traded, gifted, or sold — except in rare cases where rules against resale are built into the NFT’s “smart contract.” In other words, it is conceivable that an attendee could receive an NFT for a one-on-one with a keynote speaker, and then sell that NFT on OpenSea to the highest bidder. In an era of Zoombombing and increasing concerns about digital safety, an NFT-encoded invitation seems like a less, rather than more, secure way of making sure that people attending exclusive events are there with good intentions.
Improving Sustainability
Some have even argued that NFT swag will make events more sustainable because it will cut down on the shipping costs associated with provided physical goods, but this claim is questionable at best.
As many environmentalists have pointed out, there are significant carbon costs associated with minting NFTs. Most NFTs are connected to Ethereum, which currently participates in the classic model of bitcoin mining. That’s why the fees associated with minting NFTs are called “gas fees.”
Like most blockchain entries, NFTs are generated through a process called “proof of work,” which requires a computer terminal to complete incredibly complex mathematical problems that burn a huge amount of energy.
Ethereum, for example, uses almost as much electricity annually as the entire UK. While the company behind Ethereum has promised to switch to a less energy-intensive method of verification, called “proof-of-stake,” that hasn’t yet happened and there’s no firm deadline for when it will.
Providing NFTs as tradable digital assets, either as a ticket or swag, could take an event pretty far away from the Net-Zero Carbon Events commitment. While it’s very difficult to calculate the precise carbon cost of an NFT over its lifecycle, it has been estimated to be about the same as driving 513 miles in a typical US gasoline-powered car. Even if the energy used to power a particular NFT marketplace is produced from sustainable sources, this still puts a strain on global energy production. Until our entire energy supply comes from renewable sources, using them on one project means diverting them away from another.
Making It Worth It: Using NFTs to Build Community at Events
Until less carbon-intensive methods of minting have become the norm, throwing NFT minting around without a clear and significant objective seems irresponsible. However, there may be scenarios where bringing in NFTs can help build community and promote engagement, meeting client networking needs that organizers of hybrid events have so far found a difficult nut to crack.
NFTs for Exclusive Experiences
When thinking about the value of using NFTs, it’s important to remember that a big part of their appeal boils down to a combination of status and resale value.
An NFT for an exclusive experience could inspire a sense of industry recognition, connection, and engagement in the person who achieves access, not least because that NFT could be retained as a keepsake after the event has concluded.
Not everyone can have tea with the keynote speaker or enjoy an invite-only food and drink event with top professionals in their field. That invitation conveys status, access — and bragging rights. As a result, it’s highly motivating and could integrate well with existing gamification strategies, driving engagement at events and helping purpose-specific communities grow out of them.
NFTs to Verify Educational Credits
Another possibility is introducing NFTs as a way to authenticate education credentials for members of professional associations.
Several post-secondary institutions are moving to implement blockchain verified badges for microcredentials, a method that could be ported over to events whose primary purposes is client or employee education.
This system gives attendees the ability to display digital badges of their microcredentials on their profiles, which could facilitate networking as well as enhance a sense of community in digital and hybrid event environments. It could also prove a strong motivator if certain more exclusive events require digital microcredential badges as a prerequisite for registration.
NFTs as Proof of “Land” Ownership in the Metaverse
Looking forward, another emerging trend might see associations and companies using NFTs to gift exclusive access to an intentional community in one of the several metaverses that are coming online.
NFTs can act as deeds to virtual space which make it possible to grant a very valuable privilege: A chance to hold virtual desk space in an office shared with outstanding professionals, a community of specialists, or an elite group of vendors or sellers.
This may be a way to meet the very real need to mark and celebrate an employee or associate’s status that until recently was usually met through invitations to exclusive social events and activities. For instance, an up-and-coming, high-performing accounts executive could achieve treasured “face-time” in a hybrid or fully digital event in a company-owned metaverse environment.
IN CONCLUSION
What makes the Bored Ape Yacht Club NFTs valuable is not the image itself. It’s that they act as proof that the owner belongs to an exclusive and exciting community.
Whether it represents fine-art acquisition, metaverse real estate, community membership, or a combination of the three, what really powers the value of an NFT is scarcity. Understanding how NFTs can align with the purpose of an event may be the answer to using them effectively — and deciding if the carbon cost is worth it.
