Individual activity and its traceability is baked into the foundation of blockchain protocols. Put simply, people interact with blockchain technology through digital wallets, each identified by a public key. All blockchain transactions are public, so anyone can view the tokens an individual wallet is holding by knowing its public key. Although the initial use cases for cryptocurrencies have centered around fungible assets, as their use expands, Non-Fungible Tokens (NFTs) will offer enhanced data capabilities and insights into user behavior.
Prior to the 2021 NFT boom, the vast majority of transactions recorded on blockchain networks revolved around cryptocurrencies, which act as stores of value and utility tokens, which pay for the access to the network. Cryptocurrency transactions provided financial data, and utility tokens allowed high-level engagement with applications. The advent of NFTs, meanwhile, opened a gateway to understanding consumer behavior on the blockchain.
What are NFTs?
Unlike cryptocurrencies which are tokens substituted freely for each other, NFTs represent unique digital items. At their inception, NFTs were designed as ownership records for video game items, collectibles, and digitally native art. However, more recently, NFTs have resonated with a much wider audience than previous blockchain use-cases, bringing hundreds of thousands of new users to blockchain ecosystems. Within the first three months of 2021, the NFT market grew by 1,785%. There has been a collapse of prices surrounding the speculative art and profile picture NFT market, however NFTs have firmly been established as the fundamental tool for digital ownership on Web 3.0. As this technology continues to develop and expand it will increasingly support enterprise applications like ticketing, receipts, coupons, loyalty programs, and more. With the use of NFTs, we can now see tokens within individual wallets linked to sports, movie memorabilia, art, music, and other important consumer markets. This is the valuable consumer data that cookies work to capture in Web 2.0.
“ With the use of NFTs, we can now see tokens within individual wallets linked to sports, movie memorabilia, art, music, and other important consumer markets. ”
NFTs offer the potential to capture data similarly to how cookies allow for data capture in Web 2.0. Snickerdoodle Labs is building the tools to allow for this while at the same time putting individuals first and giving them the ownership and control of their data. Moreover, looking forward, NFTs have far greater potential for enterprise use cases than is currently understood. As NFTs realize their potential, the depth of the data they provide will far surpass that of the cookies used in Web 2.0. They will capture data more frequently and with greater insight.