In previous blog articles, we’ve covered the basics around cryptocurrency, a broad view of NFTs, how to generate your own NFT collection, and taken a closer look at popular NFT collections such as Bored Ape Yacht Club.
👀 In this article, we’ll offer a brief guide that looks at a new emerging trend in the world of NFTs – the phygital NFT, and define what it is, how it works and provide some examples. So, are you ready? Let’s get phygital!
❓ WHAT EXACTLY IS “PHYGITAL”?
👉The term “phygital” describes the intersection of the physical and digital worlds. It often describes products or experiences that combine elements from both of these realms. Chairman-CEO at Momentum Worldwide, Chris Weil, coined the term in 2007.
👉Phygital NFTs, or “Physical Digital Non-Fungible Tokens,” are a type of cryptocurrency, token, or NFT that allows for the ownership and trade of unique physical items. They do not necessarily rely on native web3 communities such as Ethereum or Solana, where their native users often rely on their NFT’s blockchain. Communities around phygital NFTs can be blockchain agnostic, and focus on the brand that they feel an affinity with.
⚙️ HOW DO PHYGITAL NFTs WORK?
Phygital NFTs operate by linking a verified physical item to a unique digital NFT. They can be anything from a limited edition piece of art🖼️, a collectible (such as a luxury watch⌚), or even real estate property🏡. The item is verified by a third-party and assigned a unique identifier, such as a QR code, NFC tag or embedded microchip🖫.
Phygital NFTs represent ownership, authenticity, and transferability. The digital NFT contains information📜 about the linked physical item and can be transferred💫 between owners, reflecting any changes in ownership on both the physical item and the metadata of the NFT. Verification of the physical item by a trusted third-party is crucial to prevent fraud and loss of trust in the platform.
The combination of the physical item and the digital NFT creates a new type of asset that has both tangible and intangible value.
🛍️ PHYGITAL EXAMPLES
Examples of a phygital experience would be virtual reality games🎮 that incorporate real-world objects or online shopping with in-store pickup. Until recently, phygital experiences have traditionally been created by adding a digital item to an existing physical product. However, with the meteoric growth of NFTs and digital assets and collectibles, many are now buying digital products that have no physical component.
Here are some industries with examples that have benefited from phygital NFTs.
🍽️🍷 Food & Beverage
Blockbar offers phygital NFTs with corresponding physical bottles🍾. The company stores the bottles in its warehouse and ensures 100% authenticity until the purchaser of the NFT redeems it for the physical counterpart.
Another innovative liquor brand that markets its products phygitally is Scottish🏴 online whisky platform, The Whiskey Barrel. Its Digital Provenance Certificate (NFT) provides digital proof of ownership and the provenance of each bottle.
Iconic French🇫🇷 fashion company, Givenchy, in collaboration with streetwear brand (b).STROY, created a physical capsule collection with accompanying limited edition NFTs. The unique collection included t-shirts👕, hoodies, jeans👖, varsity jackets, statement bags👜, and footwear👠. Web3 artist collective Felt Zine created unique NFTs to accompany and represent the Givenchy x (b).STROY physical items in digital form.
Phygital fashion NFTs can also apply to virtual avatar metaverse fashion and merchandise.
Regarding high-end luxury items💎, digital luxury marketplace, Truefacet, created digital tokens representing physical jewelry pieces, offering their buyers assurance in a genuine purchase.
In another example, the Azuki NFT collection broke web3 and skateboarding records by holding a 24-hour Proof-of-Skate auction of eight golden skateboards🛹 plated in solid 24K gold. Along with a detailed golden dragon🐲 design and unique emblem, each skateboard is embedded with a BEAN chip – a cryptographic chip🖫 tying the physical item to a digital token to verify authenticity and ownership.
✔️ADVANTAGES & ❌DISADVANTAGES OF PHYGITAL NFTs
✔️ Easily tradable and transferable💫
✔️ Offers authenticity, trust, traceability🔍 (provenance) & proof of ownership🧾
✔️ Nurtures customer loyalty💗
✔️ Generates revenue💰
✔️ Increases brand visibility👀
❌ Technology still relatively new & untested
❌ Criticized for commodifying & undermining the value of art
🔮Looking ahead, phygital NFTs offer a unique bridge🌉 for web2 brands, collectors, fans and creators into the web3 space. Competing with conventional NFTs that offer similar benefits without the additional costs and complexities poses a challenge. Phygital NFTs offer scarcity to real-world objects and enhance our IRL experiences. As a result, they can help us flex💪 our digital assets in a physical way.
👉 EARNING NFTs WITH BLOOM
📲.They might not be phygital, but the Bloom shopper rewards app allows you to earn NFTs and other crypto (like Bitcoin, Ethereum and a range of other altcoins) with every purchase made on your Visa card💳.
🦉 All you need to do is download the Bloom app, register an account, link your Visa card and shop anywhere using your credit or debit card.
💰 With every purchase, you will earn Bloom Coins by simply using your Visa card💳. The more you use your card, the more Bloom Coins you will earn.
🎁 Bloom Coins earned can be redeemed for rewards within the app, such as NFTs or crypto.
🆓 Converting crypto on Bloom is free of charge and has no gas fees!
💎 Earn exclusive 3x Bloom Coin rewards with a Premium Membership.
The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such. Bloom does not recommend that any cryptocurrency or NFTs should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.