A Hollywood film, called Zero Contact, starring Anthony Hopkins, has turned to NFTs to help raise the finance to create the film. 

Source: YouTube

Also in the entertainment sector musicians have used NFTs such as the band the  Kings of Leon who sold three different tokens: 

• one with their new album, 

• one for live show perks such as front row tickets for life, 

• third contains exclusive audio visual art.

NFTs have been used by other owners of intellectual property (IP) to raise capital by creating digital versions of their IP. However, it is not just works of art but it could also include an organisation’s brand/ image rights as seen by the UK Premier Football league which is looking to sell over £430million of NFTs. 

Diamonds NFTs

Source: Icecap.diamonds

Even jewellery gemstones are being packaged and sold as NFTs. This potentially makes the ownership of diamonds and other precious gems more available globally, and as the metaverse grows in popularity no doubt some avatars will we to ‘show off their bling’ as they wander around virtual lands. There is then no reason why people will not want to trade these digital NFTs in the same way people trade physical gems. 

This new model of raising capital using NFTs is beneficial to both the business and owners of IP as well as investors. For the seller of NFTs, it gives them the opportunity to raise capital without potentially relinquishing equity in their company. For NFT buyers it enables them to own a unique digital representation of an asset which may appreciate in value and or can be sold at a future date as well as potentially giving the buyer other benefits such as access to see a movie, concert, football match etc.

There is also another benefit for the creators of NFTs and that is to create an ongoing stream of income, similar to the royalty revenues enjoyed by musicians and the film industry. If the NFT is constructed in the right way every time the NFT is traded the original issuer of the NFT can earn a percentage of all future sales. Unlike selling a picture or a gemstone at an auction or to a dealer where the seller receives a one-off amount of money an NFT can be programmed to generate income on every subsequent sale of the NFT.

As with many investments, the financial success of an NFT depends on the confidence of buyers and their belief they have that they are able to sell the NFT for a higher price at a later date. Thus, the success of an NFT project dramatically improves if there is an active community/fan club as there are likely to be buyers in the secondary market. Building a vibrant community usually starts with defining who the target audience is, this is important to building value for a project. Then a vision can be shared with the community explaining what the project is and how they stand to benefit from it. Social media platforms are usually the preferred way to communicate and inform potential community members about a forthcoming NFT. Discord Telegram, Twitter and Reddit are the main platforms that NFT issuers use, although You Tube, TikTock and Instagram also can be useful platforms to raise awareness and interest. Pitching to potential buyers is not easy and increasingly we are seeing influencers even Artificial Intelligence influencers are being engaged to promote NFTs. It is important that even after the NFTs have been issued to maintain a vibrant community and keep them updated and assured that the project has longevity. 

At present, the limitations of blockchain in agriculture are considerable. Of all the necessities of life, food is arguably the most important and safeguarding this is the food industry - an amalgam of government and private players. The use of blockchain technology in the agriculture market globally is expected to grow from $128.87 million in 2020 to $886.18 million in 2025, at a CAGR of 47.1%. Blockchain-powered platforms are being implemented in agriculture so as to improve efficiency and transparency and bring benefits for customers, suppliers and retailers alike.

Information being asked about the food supply chain 

Source: Consumer Preferences for Traceable Food

The technology is being further utilised in a variety of ways so as to help meet the challenges around food wastage, which the UN estimates to be as much as “14% of food [is] wasted p.a. from harvest to retailer” with complex and often international supply chains - and fraud. Of the many ways that blockchain technology is being used in the agriculture sector, here are just a few examples.

• agricultural insurance - (Blockchain Climate Risk Crop Insurance). Smart contracts can help assess agricultural insurance claims, making the claim process simpler, fairer and quicker. Insurance frauds and false claims will also be alleviated with the use of smart contracts as they are immutable; no party will be able to change the policies to their advantage. It is estimated that claims can be paid in a week, as opposed to months, and the cost of insurance could be reduced by as much as 30%.

• agricultural supply chains and sustainability - (SAP and Unilever Green Tokens). The transparency blockchain can bring to agriculture is unparalleled, bringing greater clarity and trust in what can be complex global supply chains. Because there is greater transparency and knowledge, retailers and consumers can have access to where goods come from and the sustainability of supply. Environmental sustainability is an increasing demand from retailers and consumers and having transparency and  greater clarity as to foods sustainability could well enable farmers that use a blockchain the ability to charge higher prices, so increase their profit margins

• food safety - (IBM’s Food Trust). By digitising information about transactions regarding food growers, processors, shippers, retailers, regulators and consumers, all are able to access one database and have greater confidence in the food supply. This is vital in the event of an issue when food needs to be withdrawn due to a potential health/infection concern. 

• provenance - (Agriledger in Hati). If a blockchain is implemented with Internet of Things (IoT) in agriculture, it hugely increases the traceability problem presently pervading the industry. Due to the current framework in the industry, fake agricultural products enter the system and, because they are untraceable, put consumers at risk. Over 40% of people claim: “where their food comes from will be an important issue for them”. Historically, food producers have been remote from the consumer and often earnt a relatively small percentage of the final selling price paid by the end consumer. However, by using blockchain technology food producers can enjoy a higher price for the goods they produce.

Meanwhile, it is well known that food waste is also a real challenge in the agriculture sector (as the chart below shows). Globally, the numbers are massive in terms of wasted resources such as water and fertilizers, not to mention the carbon emissions.

The impact of food waste

Source: TraceX

The use cases confirm that blockchain technology is neither a silver bullet nor a solution to every problem in the agriculture sector since blockchain does not come without its challenges. The initial substantial costs to establish a fully operational blockchain-powered platform and allocation of who pays what (i.e., the farmer, transportation, retailer etc.) is an ongoing challenge. Furthermore, as there is the cost of hiring technical experts, is this something the average farmer is able to afford? Interoperability is yet another limitation blockchain technology faces, as different blockchain networks cannot easily communicate with each other. This creates a potential digital island problem. There are also regulatory and privacy laws that may hinder how data is handled in different countries. EU -GDPR (General Data Protection Regulation) with its “right to be forgotten” or CCPA (California Consumer Privacy Act) directly contradicts blockchain’s immutability quality so care needs to be taken as to what data is being held and where. 

For blockchain technology to be viable in the agriculture industry, it needs to be utilised in conjunction with other industries. Santander has recently partnered with Agrotoken to allow farmers the opportunity to take out loans backed by Agrotoken’s tokens. Santander include soybeans, corn, and wheat, all of which are, in effect, types of stablecoins since they are pegged to values of these different grains - with each token being worth one ton of grain. The tokens allow farmers and other parties in the agribusiness industry to access this new financing system. Santander is investing $225 million in the project and it is to be tested initially in Argentina. Farmers can tokenise their grains online and have the tokens in their digital wallets. The tons are validated by a Proof of Grain (PoGR) network which has a multichain infrastructure. Interestingly, the PoGR network is able to operate using the Ethereum, Polygon, or Algorand blockchains. 

So, the use of blockchain technology within agriculture is certainly set to change the traditional agricultural sector. Having access to more information (potentially in real time) and also to different forms of finance, and being able to enjoy cheaper insurance and reach out to the unbanked farmers, are just a few of the advantages. The solutions should ideally be designed in ways where they can be accessible by an everyday farmer. Without doubt there are challenges, but we are already seeing more widespread adoption of blockchain technology and indeed the use of digital assets in the agriculture sector around the world.