Connecting Physical Items to the Blockchain Through NFTs(Physical NFTs)

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Coinmonks

5 min readMay 21, 2022

The current use cases of the blockchain are digital assets, “if it’s not a digital asset, you can’t use blockchain technology” — So I heard.

One of the significant questions I get from people is what of we that sells food? or shoes? or some obvious physical items that cannot be easily digitised, they conclude that web3/blockchain isn’t for them! I can’t get involved!

What if we could connect physical items to the blockchain? In this article, I will walk you through how this can be possible through NFTs. I will also share a manual way I found based on research on how to go about this.

What Are NFTs?

NFTs are known as non-fungible tokens, which implies that they are not interchangeable because no other asset can hold the same value. The idea of non-fungibility is its uniqueness.

If you understand status in society, you will understand NFTs — Ajulu

The history of the uniqueness of the NFT exists on a blockchain, which is secured using cryptography. An NFT can be seen as digitized information of an asset(physical or digital) or as a digital asset in itself. An example is an artist that creates a copy of his painting and goes and sells it on a dedicated marketplace like opensea. Currently, the most use cases for NFTs are arts, photography, music, sports collectibles etc

Now that NFTs have been defined, we need to see how it relates to physical items.

The Concept of Linking Physical Items to the blockchain Through NFTs

This can also be called a Physical NFT. To explain this simply, Here, the NFTs can act as a guarantee of ownership over a real-life, physical item if the buyer indeed wants to have a physical version of their property.

Currently, we just mint NFTs for a lot of money, thousands of dollars but you don’t exactly get anything for it. But in the concept of Physical NFT, you can mint an NFT and also have the option of getting that exact NFT(I mean the property that was minted) as a physical item. A great example of this is how Beeple a famous digital artist provided physical tokens that are connected to his artwork, which will typically include a high-resolution screen art display, a signed certificate of authenticity etc. Beeple gave a detailed explanation of his thought process here

For simplicity, let’s take a physical painting as an example. You have to start by creating a digital version of that painting, like a digital twin which can easily be done by taking a photo with your phone or digital camera. You can also reach out to a digital artist to clone the same for you using photoshop and the likes. Once you have digitized your work, it is important that all the information related to the painting is precise and attached to the virtual file. From here, you choose a marketplace to mint your painting. Smart contracts assign ownership and manage the transfer of NFTs especially for For Ethereum-based tokens, which are the majority.This is how you get your physical painting in the blockchain. Now allowing users to get this NFT as a physical product, is the completion of the process of physical NFTs.

In the end, physical items can be sold like any other non-fungible tokens or be redeemed for a physical item it is connected to.

One of the major concerns of people is why will I get a digital art for a lot of money and nothing will come of it, it either increases in value which is based on the project and the community or reduces in value. A lot of people have also lost money buying NFTs and in the long run, the value reduces to zero

Before we move to the benefits of physical NFTs, let me walk you through some examples of physical NFTs.

Examples of Physical NFTs

Currently, in the NFT space, the energy of physical NFT is yet to be seen, but there are projects focused on this already and are taking off.

Niyo DApp: Niyo DApp is an F-NFT visual discovery platform powered by AI/ML and augmented reality that allows creators to turn their creations into NFTs. The creators will be able to convert their F-NFTs into real products and services that they can try before they buy on the Dapp. NIYO is frequently collaborating with creators to design a range of physical items in the fashion, hair and beauty space.

2. RTFKT Studios: They are known as Virtual sneaker powerhouse RTFKT which was recently acquired by Nike. They allow owners of NFTs to easily redeem footwear, calling the NFT the “blueprint” to real-world creations.

There are more examples like Mattel, Adidas Originals, WENEW

Benefits of Physical NFTs

The biggest upside to physical items is being able to prove authenticity and provenance and in a market where over $600 million has been spent, Physical NFTs can be a valuable tool for buyers and sellers. Thanks to blockchain technology, information attached to virtual assets and their physical counterparts can’t ever be changed, faked or tampered with, providing a data trail that can be trusted.

Another major benefit is removing middlemen from transactions providing freedom for both buyers and sellers.

Lastly, it makes more people get involved in the NFT space, not just digital freaks but also people with vocational skills in blockchain technology.

Conclusion

The NFT space keeps getting wider both in the physical and in the virtual world(metaverse). While we attribute NFTs to big projects like CryptoPunk, BoredApe, FancyBears etc, some have pointed to linking NFTs to physical items as one of the strongest cases for the use of NFTs and blockchain technology.

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