What are Physical NFTs? How to Sell Physical Assets as NFTs?

Key Takeaways

Physical NFTs are cryptographic tokens linked to physical assets that provide ownership of artwork, merchandise, property deeds, and others.
Physical NFTs have two parts - the digital part stored on the blockchain, and the physical asset that you turned into an NFT.

Non-fungible tokens (NFTs) stand out from the rest of the crypto assets with their unique characteristics. The popularity of NFTs was also one of the reasons behind the 2021 crypto bull market. Just when people started questioning the actual utilities of NFTs, new innovations took place in this space, leading to the emergence of several applications such as physical NFTs.

Gone are the days when NFTs were only limited to digital art. Today, the concept of NFTs can also be applied to physical assets. Physical NFTs are the non-fungible token versions of tangible assets and physical items. Feeling confused about how NFTs are combined with physical items? We will learn what these new NFTs are and how you can sell physical assets as NFTs in detail. Let us start!

Physical NFT: What Is It Exactly?

While NFTs are mostly associated with the art world, they are also issued and sold as a virtual representation of off-chain assets, including antiques, consumer goods, and collectibles. In physical NFTs, they act as a cryptographic token of ownership over a physical and real-life item for the buyer if they want to have a physical version of the NFT. To put it simply, a physical NFT is nothing but a non-fungible token that is connected to a physical asset.

Due to the fact that physical NFTs are linked to real-world assets, they are also known as “phygital NFTs.” Similar to any other non-fungible token, physical NFTs can also be sold or redeemed for the physical asset that they are connected to.

How Do Physical NFTs Work?

A physical NFT typically consists of two parts, where one refers to the physical asset and the other one implies the digital asset that has been issued on a blockchain. The physical assets, on the other hand, are generally connected to a corresponding unique identifier, including a QR code or an NFC tag (near-field communication).

Physical NFTs not only contribute to the authentication of the non-fungible tokens but are also useful when it comes to supply chain management. With blockchain technology traceability and certificate, allowance becomes easier for physical NFTs.

Examples of Physical NFTs

While in the NFT space, the focus is yet to be reflected on physical NFTs, there are some big names that have introduced themselves in the domain.

Adidas Original

In 2021, Adidas, the German sportswear company, made its way into the world of the metaverse by putting out an NFT collaboration with the famous Bored Apes Yacht Club. Buyers could get a hold of exclusive physical merchandise that includes beanies, hoodies, and tracksuits.

WENEW

Co-founded by Beeple, WENEW is a platform selling “iconic” moments in history as well as cultural milestones as NFTs.

GAP

The popular fashion retailer GAP has also joined the NFT space by launching its first NFT collection that offers physical hoodies. The project was in partnership with Brandon Sines, the artist of Frank Ape.

Advantages of Physical NFTs

There are a number of benefits that come with physical NFTs – from proving authenticity to assigning transparency.

Improving in-person Experience

While NFT memberships are already in demand for being the gateways to online communities full of virtual experiences, physical NFTs act the same way. The main difference is that the value you will be getting is completely based on the real world. For example, event ticketing is becoming one of the best instances of changing the in-person experiences through physical NFTs.

Adding Extra Layer of Transparency

Purchasing a second-hand collectible can often get challenging as most of the time you get negligible amounts of information on its previous price and market value. Having an NFT, will give you the freedom to get access to a complete overview of the NFT’s transaction history.

Eliminate the Risk of Counterfeit Products

A major advantage of physical NFTs is that they have the ability to prove authenticity and provenance. With a physical NFT, you can easily eliminate the chances of someone counterfeiting your product. With the help of a QR code or NFC technology, businesses can easily link a product’s serial number to an NFT which will help the buyers to check the authenticity of the product as well as track its price history.

How to Sell Physical Assets as NFTs?

These days, it is safe to claim that practically anything can turn into a token form. Many businesses are already taking advantage of this fact by linking physical assets with non-fungible tokens. When it comes to selling a physical item as an NFT, there are mainly two ways to do so.

You can either take the manual approach, where you need to digitize the artwork you are willing to transform into an NFT in order to sell it on the blockchain. However, if you are selling a physical product that is not art, then it is better to rely on a platform that approaches it manually.

While for artwork, you only need a 2D scanner or a high-resolution photograph to create a digital copy. This gets challenging in the case of a 3D object, as you might need design software or a 3D scanner. Upon digitizing your physical NFT, decide on which blockchain you want to store them. After choosing the blockchain you can mint your NFT that you can sell on various NFT marketplaces like Exchange.art, OpenSea, and more.

Conclusion

The world is moving forward with the gradual adoption of Web3 and blockchain technology in the mainstream. In this scenario, physical NFTs are bridging the gap between physical and digital. By transforming how we interact with real-world products NFTs are doing the impossible. Linking NFTs to physical items has the potential to be a crucial use case of NFTs and blockchain technology.

Frequently Asked Questions (FAQs)

1. What are the top 5 brands that are selling physical NFTs at present?

Adidas, Gap, RTFKT, Damien Hirst, and Patrón are some of the top brands that have introduced themselves by bringing physical NFTs to the market.

2. What are the steps to selling a physical product as an NFT?

You need to follow some simple steps such as making a digital version of the physical asset, minting it into an NFT, including its meta data and description, and adding a certificate of ownership based on a blockchain.