The prevalence of the word “phygital” has risen steadily in recent years, with interest growing by more than 57 percent in the past year alone. according to MeetGlimpse. And the trend shows no signs of slowing down.
Today’s consumers expect to shop and interact with brands quickly and securely. By combining physical elements with digital assets for seamless omnichannel interactions, businesses and investment enthusiasts can meet these demands and bring convenience to the modern world.
Phygital is not just a buzzword. In a world that is becoming increasingly digital, and as the Web3 and NFT space continues to grow, companies that embrace the phygital space offer near-instant gratification without losing their physical allure.
Let’s dive into the world of phygital and explore its potential to revolutionize the world of NFTs.
What does “phygital” mean?
The word phygital is a portmanteau of the words physical and digital. While the term could describe anything that tries to bridge the gap between the physical and digital worlds, it is commonly used in businesses to describe a marketing strategy or retail experience.
It can include the use of augmented reality, virtual reality, and artificial intelligence to interact with digital assets in the physical world, or the use of digital devices to control physical objects. For example, when you order an item on your phone (digitally) to pick it up at the store (physically).
In the investment space, phygital NFTs are a type of cryptographic token that allows ownership and trading of unique physical items.
How do phygital NFTs work?
The idea behind phygital NFTs is to create experiences that combine physical elements with digital technology. Tokens can represent physical goods, such as collectibles, works of art, or limited-edition goods, but there’s a twist. These tokens will not only exist in the physical world but also on the blockchain as an immutable record of authenticity and ownership. That means you can own and store your tokens physically and digitally and enjoy the benefits of both realms.
Benefits for artists, creators and brands
In the NFT space, phygital can create a new level of NFT ownership experience. By linking your physical assets to digital tokens, you can display your property on a digital platform or in a virtual reality environment. This creates an engaging and more immersive ownership experience for collectors.
Owners of fictitious NFTs can sell their physical assets and still retain ownership of the digital tokens. This is particularly lucrative for musicians, artists, and other creators who have been unable to monetize their assets in the past. Phygital NFTs can increase transparency and provide a secure and tamper-proof record of ownership. Since each NFT is recorded on the blockchain, there is a permanent record of ownership and transaction history. This is important because it increases accountability and trust between traders. It also reduces fraud.
With fractional ownership, you can diversify your portfolio and gain access to a wide range of assets without buying them outright – fractional ownership of high-value assets that would otherwise be inaccessible to most investors.
Phygital NFTs also increase the liquidity of assets, and they do this by providing platforms where collectors and cryptocurrency enthusiasts can buy and sell assets. That means you can easily buy or sell ownership of your assets without going through traditional processes.
Phygital NFT Risks
With the benefits also come the drawbacks. One of the significant risks of phygital NFTs is that they are dependent on the items they represent. So if an asset is damaged, stolen or lost, it loses its original value. You can mitigate such risks by taking measures such as securing assets and using secure storage to protect your assets. Additionally, you can represent your assets in multiple digital tokens to spread the risk of damage or loss.
Furthermore, phygital NFTs exist in complex legal environments. Therefore, when buying or selling an asset, you must comply with applicable laws and regulations. You must also trade the assets on licensed exchanges and platforms.
Specific uses
Food and drinks
Phygital NFTs can represent food and drinks in the real world. For example, Whiskey Barren used NFT phygital recently to offer exclusive access to a limited edition rare whiskey. Blockbar also offers NFTs with physical bottles of spirits and wine, with the token providing proof that the bottle is original. When you buy these Blockbar tokens, you get a QR code on the bottle. The company will store the bottle securely until you redeem the token for its physical counterpart.
The Starbucks Odyssey uses NFT phygital to offer an exclusive experience to its customers. Participants can immerse themselves in interactive activities called “Journeys,” ranging from taking a virtual tour of a Starbucks coffee farm in Costa Rica to trivia about the Starbucks legacy. Once a ride is complete, members earn Polygon-based NFTs called “Seals” as well as Odyssey loyalty points to gain access to real-life perks and immersive experiences.
Luxury articles
Brands can also use phygital NFTs to represent luxury items. For example, it will be true, a digital luxury marketplace, has an NFT token that represents physical pieces of high-end jewelry. The tokens provide proof of authenticity, which can help prevent fraud when buying jewelry. This also assures buyers that their purchases are genuine.
Italian fashion brand Diesel he also launched phygital NFT wearable in his D:Verse collection. Diesel NFTs give holders VIP access to their NFT community where you can experience the next fashion show first hand.
luxury jewelry house tiffany and company made a splash in the NFT space after launching its NFTiff CryptoPunk NFT pendants, exclusively available to Cryptopunk holders. The limited-edition pieces feature 87 different attributes and 159 digital punk colors, physically converted to the closest gemstone color enamel.
Physical art and other collectibles
Phygital NFTs can also represent collectibles, like physical art, in innovative ways. This allows artists to produce and sell art that collectors can experience physically and online. Such NFTs in the art industry can represent a wide range of works of art, including sculptures, paintings, jewelry, and clothing. They can also represent collectibles such as figurines, trading cards and toys.
Additionally, phygital NFTs can unlock new ways for artists to get paid and generate royalties. FVCKRENDER partnered with the artistic community before art to launch two phygital sculptures with accompanying NFTs.
our phygital future
The potential of phygital NFTs is enormous. From collectible toys to fine art, they can revolutionize the way we perceive physical assets. The combination of physical assets and digital tokens also has the potential to transform real-world applications such as supply chain, digital identity, and ownership experiences.
Furthermore, by offering brands innovative ways to engage with consumers and build brand loyalty, phygital NFTs can potentially revolutionize the marketing industry.
