NFTs Could Benefit Cannabis Industry
Difficult to understand, NFTs have wide-ranging possibilities which could benefit the cannabis industry.
More people likely know about NFTs as a punch line than know anything about what they are and how they function. NFTs are an elusive concept to grasp, and it seems that the current NFT market is based more on speculation than on an actual monetary value. But, the technology behind NFTs could significantly impact society soon.
NFT stands for Non-Fungible Token. Fungibility is defined as “the property of a good or a commodity whose individual units are essentially interchangeable and each of whose parts is indistinguishable from another part.” The non-fungible aspect (the “NF” of NFT) means it is unique and cannot be negotiated by substitution.
For example, if five apples are placed in a barrel full of apples, and five different apples are removed, those five apples have the same value as the first five apples.
That’s not the case with NFTs. But, the actual value of NFTs may lie not in their potential as an asset to be bought and sold but as something more flexible and wide-ranging.
“The Crypto Cannabis Club” has created a series of algorithmically generated NFTs that combine different data points to create unique images.
If you purchase any of their NFTs, you immediately become a part of the Club. The Club can then host activities open only to club members. Thus, the NFT becomes a means of exclusive access.
Because NFTs cannot be replicated, they become an extremely effective way for brands to create special categories of interaction between them and the NFT holder – discounts or invites to unique events.
NFTs can benefit the cannabis industry, too. A cannabis breeder could utilize NFTs as a means of registering crops to provide a time-stamped, unalterable, digital record that could prove they were “first” in creating a particular strain. People may also be able to order their cannabis supplies.
An NFT is “minted” via a platform like OpenSea – one of the largest NFT marketplaces. Then, using a digital asset of your choice (frequently a digital image), you add it into the blockchain, which then makes it available for sale.
The majority of NFTs live in the realm of digital art, but it’s this underlying technology and connection to the blockchain that places NFTs at a pivotal point in history.
People continue to ascribe new meaning and function to NFTs, and they will undoubtedly become more commonplace in coming years. Additionally, as long as cannabis is federally prohibited, banking within the cannabis industry remains extremely difficult, if not impossible. For the cannabis industry, moving to the blockchain seems a logical next step.