Although 21 per cent of the US millennials are actively collecting NFTs, the industry is still struggling to grasp real adoption among the masses. For instance, the process of creating and collecting NFTs is tedious and technical to the average user, let alone understanding the underlying utility. Similarly, there is also a loose link between NFTs and the inherent value they represent. All of these technical hurdles are slowing down mainstream adoption despite the huge potential.

But on the brighter side, new technological advancements in the industry are solving these challenges, bringing an array of novel opportunities. Location-based NFTs are disrupting user experience and utility, making NFTs easier and more ubiquitous to access by all levels of users. Moreover, location-based NFTs add a new layer of scarcity by requiring users to physically go to a specific location, drawing potential on how NFTs can empower new business models.

Location-based NFTs explained

Location-based NFTs, also known as geotagged NFTs or Area NFTs, are a class of digital content, albeit pieces of metadata, that are tagged to real-world locations. These non-fungible tokens secured by smart contracts can represent digital identities of social media profiles, a concert ticket or even an exclusive voucher for a local restaurant. The location part comes in to enable business logic that encapsulates geocoordinates. For instance, in order to access these NFTs, users need to travel or be within the radius of the specified coordinates as in the case of Lost Worlds, a mobile-friendly platform for location-based NFTs.

Making location a key aspect for unlocking NFTs creates a new breed of possibilities in rewarding loyal customers and users. Think about fans who can unlock branded merchandise only when they are present at a live music concert. “Binding NFTs to a real location allows shared experiences to be blended through the interaction of the physical and virtual worlds. By allowing any business to expand their offerings to consumers with unique geotagged NFTs, we see more value behind the utility of NFTs for many sectors including fast-moving consumer goods, retail businesses, restaurants and entertainment,” says Quaison Carter, CEO & Co-Founder at Lost Worlds.

Also Read: Demystifying NFTs and DeFi

Location-based NFTs drive new businesses models

Entrepreneurs are still catching up with how NFTs can help revive their offline businesses, especially after the pandemic’s disruption of consumer behaviour. That’s why 41 per cent of businesses are trying to pivot from offline to online operations, even though most of their revenues are generated from in-store purchases. Fortunately, location-based NFTs can help revive the existing habit of in-store experiences that consumers are almost giving up on and transform into a hobby.

A majority of NFTs making recent headlines are primarily seen as another “profile picture” collection that offers little utility beyond art. But the truth is that NFTs are more than what meets the eye, especially now that geolocation technology is in play. This technology expands shopping experiences to become part of hobbies or turns daily outdoor activities into lasting rewards.

Geolocation NFTs are merging the real world with the metaverse to make Web3 apps accessible to more users. With a typical smartphone and a free Web3 wallet, anyone can start using NFT platforms like Lost Worlds. This empowers brands to engage and connect with consumers in innovative ways that drive content ownership, monetization, and redemption, as well as shared digital experiences with friends and family.

“Besides a fluid user experience, attractive rewards remain a key driver for customer retention and acquisition. With location-based NFTs, businesses can invite users to redeem exclusive rewards only when they physically mint them at select places. This concept will help drive consumers to visit physical stores, unlock redeemable content in the form of NFTs, and in effect drive more revenue for offline retailers,” says Quaison.

Rethinking consumer and brand interactions

Location-based or Geotagged NFTs are just starting. Their practicality opens up many use cases to disrupt all industries, as long as location can be fused into the user engagement model. For instance, the music industry can adopt location-based NFTs to redefine the experience of acquiring, using and interacting with artists and their content. Fans flock to events when they stand a chance to collect exclusive giveaways, as a means to emotionally connect with their favourite celebrities. These giveaways, in the form of NFT merchandise redeemed at select locations, are now reinventing how fans engage with artists.

Similarly, record labels can leverage this technology to stimulate new revenue streams for their artists. By leveraging location-based NFTs and shared experiences, record labels can create digital experiences that directly connect fans to music artists. For example, record labels can host events that bring communities together based on regional or seasonal events. These communities create a ready market for NFT-driven campaigns that upgrade the overall fan-artist experience.

Also Read: NFTs provide new ways to handle IP management, empower content creators: Inmagine CEO Warren Leow

Expanding the potential of NFTs

“One of our goals is to encourage business owners to tap into the full potential of NFTs that bring new engagement models for their end users,” says Quaison. Consumers are already intrigued by NFTs and are more inclined to see how they can spend, redeem, or unlock them as rewards. It’s just a matter of time before NFTs become closely integrated as the new normal.

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The content was first published by The Human & Machine.

Image Credit: The Human & Machine

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