NFTs, Web3 and what we tell clients who ask

Four years ago we wrote about Bitcoin at $19,000 and said we would revisit it. Here we are. Bitcoin is higher, a digital collage sold at auction for $69 million, and this summer every second brief mentions NFTs or "Web3". A bakery asked us whether it should mint its loyalty card. We said no, kindly. Here is the longer version.

What an NFT actually is

A receipt on a public ledger that says "this address owns this token", where the token points at a file that usually lives on an ordinary server. The receipt is durable. The file is as durable as the server. The value is whatever someone will pay for the receipt. That is the whole thing, stripped of the vocabulary.

There are real uses in there — provenance for digital art, tickets that cannot be forged, memberships that can be resold. There is also an enormous amount of theatre.

The question to ask

Would a customer who has never heard the word "blockchain" get something out of this? If the answer is yes — a ticket that works, a membership they can sell on, a piece of art they wanted — there may be a project. If the answer is "they would get to own a token", there is no project; there is a press release.

What we tell brands

• Do not do a drop because your competitor did one. The audience that buys NFTs is small, specific and mostly buying to resell. It is not your customer base.
• Do not put "Web3" on your website. We said the same about "blockchain" in 2017. It dates the site in a year and confuses the visitor who came for the opening hours.
• If you do it, do it as a design object. The only brand NFTs that have not embarrassed anyone are the ones that were beautiful, limited and honest about what they were. Treat it like a print run, not an investment product.
• Watch the energy bill and the reputation bill together. Whatever the technical debates, a large share of your customers currently associate this with waste and scams. That is a cost even when the tech is not.

What we are actually interested in

Wallet-based login with no password, tickets and memberships that cannot be counterfeited, artists getting a cut on resale. Those are product ideas that happen to use this technology, and if one of them fits a client's real problem we will build it and enjoy it. We are not interested in building a countdown timer with a "mint" button, and we say so in the first meeting.

The 2017 advice still holds, word for word: build the thing people use, put the price on it, make it fast. We will check back in a few years. It will, again, be interesting.