Niftmint Looks to Take The Friction Out of Enterprise NFT Deployment
As buzz phrases go, "the NFT is the new cookie" is getting some traction in enterprise blockchain circles because of the incredible shrinking usefulness of cookies; bits of data that, when allowed into a user's desktop or mobile web browser, make it possible for web sites to build more personalized user experiences. But, as with many technologies that involve end-user benefits, cookies are a double-edged sword that can also be used to invade a user's privacy. Such invasions have led to privacy laws that have eroded if not fully stripped the cookie of its utility. Unlike cookies, however, non-fungible tokens (NFTs) are by their very nature permissioned. In other words, users should never be unwilling recipients of an NFT the way they often are with cookies or spam. As such, NFTs create new opportunities for respectful but high-fidelity relationships with customers. But seizing those opportunities is a different story.
To make NFTs work in this capacity, enterprises must first understand the role that blockchain plays in both the minting and ownership assignment of NFTs. As enterprise workflows go, the process is almost as complicated if not more complicated than the way cookies technically work. Browser cookies worked well because, until laws were passed that restrained them and browsers started blocking them, end users often played little to no role in cookie management. Similarly, for businesses to unlock the promise of NFTs as the new cookies, they'll need to be friction-free from the customer's perspective.
According to Niftmint founder and CEO Jonathan G. Blanco, "As with any form of industry revolution, it's all about how things become more simple. It's not like 'We created this new industrial revolution and now things are more difficult' so productivity is more complex." While at the NFT.NYC 2023 Conference in New York City, Blockchain Journal editor-in-chief David Berlind had a chance to speak with Blanco shortly after he finished his presentation on what it will take to onboard the first billion users to blockchain. One thing it won't take: friction.
By David BerlindPublished:April 18, 2023
David Berlind: Today is April 12th, 2023. I'm David Berlind, and I'm bringing to you the Blockchain Journal Podcast from New York City, where right now NFT New York City is taking place. We're in the Javits Center on the west side of Manhattan. The place is full of all sorts of people who are interested in NFTs, [and] vendors who make technology to help furnish NFTs. Sitting with me is Jonathan Blanco. He is the CEO and founder of Niftmint. You have your t-shirt on, so you're doing a lot of great branding here. You just gave a talk on what it's going to take to get to the next billion NFT users.
Jonathan G. Blanco: The first billion.
Berlind: The first billion. We're not even there yet.
Berlind: Okay. So first let's talk about Niftmint, what it does, because it says, "NFT commerce infrastructure." So we're all about enterprises and big brands using blockchain. Infrastructure is one of those kind[s] of words that gets my interest. So what is it that NiftMint does?
Blanco: Yeah, so Niftmint is the simplest way for brands to sell or offer NFTs to their customer directly on their existing commerce platforms. What we do is we abstract all the cryptocurrency in the crypto wallets and allow them to be able to mint, sell, and custody those NFTs directly on their e-commerce platform because we believe the brand needs to own the customer experience when it comes to NFTs or anything that they sell for that matter.
Berlind: Okay. When you say custody, because a lot of people in the enterprise world will be watching this, they're not familiar with all of the terminology. Is custody a reference to the fact that you would have a custodial wallet for... Like if you're some big brand, you would have a custodial wallet and you would hold the digital assets on behalf of your customers?
Blanco: Yeah. So that's a really great question. So when you create an NFT, it's minted, it's created, right? But that NFT needs to go somewhere. And so, one of the biggest complexities that happens with NFTs, and frankly something that's frustrating for brands, is the fact that they have to educate their customer on how to use these things. And basically, what it amounts to is sending people away from your dot-com over and over and over again. And so what Niftmint does is we actually custody that NFT on your behalf for the customer or for you. So as far as the consumer knows, they think that they're going on your dot-com and seeing their NFT and your custodying for it, but in reality, we're doing it for you in the background via a series of APIs. So the brand doesn't need to worry about any of that heavy lifting. We do all that for them.
Berlind: So when I hear you describe this, I'm reminded of Starbucks' Odyssey Program, which is basically going to incorporate the NFTs into their mobile app. There's no wallet or anything like that. Sometimes when we talk about programs like that, we talk about this idea of Web 2.5. It's not Web 2, it's not wholly Web3. It's somewhere in the middle.
Blanco: Yeah. So, I love answering that because I like to think about it as... I think we just need to redefine what Web3 is. And so I still think of that as Web3 overall to be honest. It's just there's this notion or this thought that Web3 has to replace Web2 and all Web3 is really attaching some of those principles onto the Web2 functionality. So if we think that Web3 means that the customer has to fully own an NFT or fully own a digital product, I personally think that's the wrong way to think about this overall, because as any form of industry revolution, it's all about how does things become more simple, right? It's not like, "Oh, we created this new industrial revolution and now things are more difficult. So productivity is more complex."
So yeah, with Odyssey or Nike, there's a lot of really good brands that are currently getting into NFTs and exploring this, but I believe the ones that are going to find the most success are the ones that focus on their core customer first as opposed to focusing on the crypto consumer. Because, as I said in my presentation, as of last year, there's roughly about 30 million customers who have cryptocurrency, or... have cryptocurrency wallets via MetaMask. There's about 50 million people in the US that have cryptocurrency. Most brands have more loyalty members or people in their database that they can market to. So if a brand offers a Web3 experience or NFT to their existing customer base, I believe they'll have a lot more success than targeting specifically a crypto consumer.
Berlind: One of the big areas for friction in terms of customers for brands has to do with this idea that if the brands are the ones that are dealing with the custody of their digital assets, whatever that digital assets may be, and they're trying to make it easier for the customers, at the end of the day, those same customers working with 20, 30 different brands could end up with 20 or 30 different wallets. Doesn't that get a little messy?
Blanco: It does get a little messy, and that's why you need to have trusted providers. There's a reason why most brands not named Amazon, don't do their own fulfillment, don't do their own shipping and logistics, don't do their own PCI compliance, and their credit card processing. They've used someone else, right? And we see the same thing when it comes to Web3 and NFTs and the creation of it, the management of it, the selling of it, et cetera. And then again, what's most important is making sure that you're offering products, services, [and] experiences that your customers want. And so, if that means that that needs to take place on your website, which I believe it does, then that means that you should probably think about how is this being custodied on the site. And so what Niftmint does is we facilitate that, we handle that, and we basically link it based off of different identifying factors like email or cell phone number, et cetera. We can't even do it off of a wallet address if someone wants to manage it that way.
Berlind: But by that you mean they can bring their own wallet?
Blanco: They could bring their own wallet if they want to. But again, early data shows that that's just not what the mass consumer wants. We're here at a crypto conference and everybody here probably wants that, but the mass consumer's not demanding owning the NFT on their own wallet. They don't wake up in the morning and say like, "This is a problem for me." But they do want the digital experience. They do want the product because they love the brand, right? They'll do what they can to get the experience from that brand.
Berlind: When you were talking about retailers, retail experience, opportunities for NFTs, you mentioned that loyalty's probably the biggest one right now, but that you thought a bigger one had to do with this idea of phygital or digital twin technology.
Blanco: Sure. Actually, yeah. So I think loyalty is really big. What's really interesting about loyalty with NFTs is if you think about the marketing behavior that you're trying to achieve and you're trying to unlock, NFTs really unlock that behavior because it is this notion of badging or key in a way. I think phygitals and digitals are also really interesting. I believe every high-ticket price item that you ever purchase will have an NFT equivalent to it. And I think that actually also scales down to, over time, most products that you purchase will have an NFT equivalent. What I was mentioning on stage is I really believe in the authenticity aspect of NFTs and having things like warranty information and service information built into the NFT from the onset.
Berlind: Was it a refrigerator there?
Blanco: Yeah. I always like to use the Whirlpool dishwasher NFT. No one's going to be like, "Oh my gosh, I'm trading my Whirlpool dishwasher NFT for millions of dollars." That's not why you want it. But if it becomes a way for a brand to attach service plans easier on sales, that becomes really interesting. You purchase a dishwasher at Best Buy, and the person comes to you is like, "Hey, do you want to buy the service plan that comes with it?" That service plan happens to be an NFT, cool little image, et cetera. But more importantly, it has the warranty information, the service information, where it was manufactured, parts, et cetera, all in one simple, easy-to-use place. And now you have a[n] easier way to manage your appliances. You scale that across different things that you purchase for your house. Perhaps you have a wallet that's dedicated to all your household items.
There really becomes this notion of like, "How do I manage my home more efficiently or products or the things I purchase?" Once we get past the vehicle or the delivery method, which is what we're working on, it basically becomes a better experience than you can offer by just giving someone a PDF or a JPEG of something or a piece of paper.
Berlind: So that's a pretty clear recommendation to big brands like Whirlpool. "You got to take this approach. It's kind of innovative, it's disruptive." Have you followed the use case where I think it's Lowe's and then the Home Depot followed where they used NFTs to unlock the power drills or the power tools so that if somebody stole an item from the store, it actually wouldn't work?
Blanco: I haven't seen that, but there's some interesting ways that you could kind of do that, right? So whether that be you have an NFC or some sort of chip built into the system, and then by pulling in your NFT into the app, that's what unlocks it. Because really what an NFT is a digital wrapper around a digital product or around a JPEG. And so there's a lot of programmability that can come in with that, that doesn't have to live on one centralized system. That's minted on the blockchain, et cetera. So, whether or not someone takes it off of the network or keeps it in the network, you're able to really keep and understand that authenticity.
Berlind: So those big brands that you're working with and you're providing your infrastructure to, if let's say I'm a customer of two those brands, do you federate my wallet under the hood so I only have one wallet for the two brands?
Blanco: So that's a really, really interesting question. So, we understand that information in the background. Currently, we don't, but that actually is part of the plan because it would be a little frustrating to go to each and every brand. But that also becomes a decision that the brand gets to make if they want to make sure that the information can be federated overall. We are actually working on our Niftmint wallet, which is a dual-parts custody and non-custodial wallet. In the custodial wallet function, you would see all your NFTs across the different brands. And the non-custodial side, you can add anything you want to it. So basically, yeah, we can do that.
Berlind: Okay. When you were talking after the session, there's a crowd of people. As always, [the] speaker gets mobbed. You were talking a little bit about some of the regulatory obstacles, and I thought you really had a great way of putting it. You kind of looked at a line that was in the floor here and you put your foot on it and you talked about how close you can get to the line and when you're stepping over the line. Can you repeat that?
Blanco: Yeah, I mean, I think that the rules are more clear than people make them out to be, right? So, basically don't do things that look security-like, don't treat these as something that goes up and down in value and you're participating in that value creation — the things that you would do across the board. So you just had to follow basic SEC type of rules.
Berlind: You mentioned incentivization of behavior that's designed to drive a value of a digital asset up.
Blanco: Right. Exactly. So I don't believe any brand should participate in the value creation of the secondary market of the products. So that just becomes highly problematic. Whether or not you want to make the argument if it's a security or not, that doesn't matter. All that matters is are you willing to have a legal battle about this? Do you want to spend a million dollars, a couple million dollars to prove that you are right? My opinion is you might as well just stay away from that at the current time. I do think that there will be more clarity into how to operate with these types of products, but I do think currently, based off of the current rules, you definitely should not be as a brand participating or getting your products actively onto a secondary market. Now, if they find themselves on a secondary market on their own, because someone decides to list their NFT that they got from you on OpenSea, you didn't do anything to do that, there's no issue there.
Berlind: That's happening...
Blanco: I'm not a lawyer, but this is what I've studied from our legal team and how we kind of go about it. Frankly, when we talk to brands, that usually becomes a blocker for them from their legal department. They're like, "Hey, we don't want to manage cryptocurrency. We don't want to manage the crypto in a wallet or the NFTs in a wallet. We don't want to have these on a secondary." More often than not, that's the legal advice that they're getting.
Berlind: Yeah. The general counsel's job is to say, "No."
Blanco: Yeah. Yeah, definitely.
Berlind: You also mentioned something, which is it doesn't matter what the rule is, it matters...
Blanco: Oh, yeah, yeah. It doesn't matter if you're right. It matters if you want to fight it or not.
Berlind: You also said it matters what the guy thinks who knocks —
Blanco: Oh, yeah, exactly. It matters what the person thinks who's knocking on your door to let you know that you're doing something wrong. So it's just not a fight that I don't think any brand wants to deal with. There's plenty of ways to do this and be successful. There's plenty of ways to get earned media opportunities when you offer NFTs. Just think of all the publicity Starbucks got in earned media just from announcing an NFT. There's plenty of opportunities in revenue and loyalty just by simply either giving these away or selling them that you don't need to worry about secondary markets, especially if your industry or your products you normally don't sell it on a secondary market anyway.
Berlind: That's really great advice because one, there's a lot of companies just went out there and talked about the secondary market, probably something they should have done. And two, there's so much other low-hanging fruit to go after.
Blanco: Yeah. There's so much opportunity just in doing things the way... Just treating it like a product, the evolution of digital products, there's so much opportunity there.
Berlind: Well, Jonathan G. Blanco, CEO and founder of Niftmint, thank you very much for joining us on the Blockchain Journal Podcast.
Blanco: You're welcome. Thank you for having me. I really appreciate it. It's good to meet you.