Conversation Transcript
John Paul Mains 00:13
So we are here today to talk with Ted about NF T’s and what the world that stuff is, and why does it mean anything to your business? And truthfully, I’ve struggled with this myself, since I’ve heard the first term of Bitcoin even being used. I was like, I don’t even know what this is, I don’t know what NFT is. And so here we are to figure this stuff out with. Cool.
Ted Jones 00:47
So you know, you said it once in NFT? Why does it even matter? And, you know, obviously, there’s a lot of news and buzz worthiness with NFT’s. And, you know, there’s still new technology. And that’s really what it is, it’s technology, and a lot of people can, you know, lose that, because they hear a lot about the money aspect of NFT. That’s what I’ve always
John Paul Mains 01:17
thought, yeah, it’s like, oh, this is art, or this is something and this doesn’t have anything to do with me as a business owner. So yeah, yeah.
Ted Jones 01:24
Yeah. And I think art really was the big thing that got the attention of the technology. But I think as you start peeling that back, you start kind of seeing some of the benefits of NF Ts. And, you know, you even just mentioned it about, you know, blockchain and what is blockchain? And, you know, just in its simplest terms, you know, it’s just a ledger, you know, all it is, is just recording every single transaction on a decentralized network and just saying, Hey, I have a Bitcoin, I’m going to send you a Bitcoin. And when I do that, it says, I saw me sent you this amount at this time, this date. And that’s a ledger. And you know, what Bitcoin and Aetherium and other blockchains do is record those transactions, and a decentralized way, meaning that there’s no central entity holding those transactions and can edit those transactions.
John Paul Mains 02:33
So is that you said decentralized? I mean, that sounds like nobody’s in control over it. But is it so is it secure? I mean, somebody’s got to have this somewhere, I would think
Ted Jones 02:44
it’s all a part of the, the nodes that you hear about. So when you hear about decentralizing back, gone way back, like peer-to-peer days, where I even go back to Napster. I mean, Napster is probably the easiest way to think about a distributed network is your kind of user utilizing your computer, your processing power to help secure this network and to help log those transactions on this ledger. Gotcha.
John Paul Mains 03:17
Gotcha. So yeah. So how does an NF T relate to any of this? I mean, is it separate different what I mean, can you can you walk me through what is the NF T would? Yeah, yeah, for something.
Ted Jones 03:33
So you know, bitcoins easy to kind of understand, in a sense, it’s transactional, where NF T’s really kind of took off was on the Ethereum blockchain where, you know, they introduced a concept called smart contracts and, and smart contracts basically, are a program just any, any executable program like you would install on your computer. But this is actually the code is living on that blockchain. And it basically dictates the terms of any type of agreement saying that, let’s take the Bitcoin example of me sending you a Bitcoin, let’s say, I’m going to send you an Aetherium. That same transaction gets logged to that ledger. But now let’s end. Let’s insert a smart contract between us that says, Hey, John Paul, I will send you one, ether one eat if you meet the conditions of this agreement, and a lot of those agreements are the purchase of art, which is really what kind of popularized it right is
John Paul Mains 04:52
that people sort of crazy silly stuff is like, why would anybody buy this thing?
Ted Jones 04:57
Right? It’s the digital asset. Think of anything digital these days, you’ve got music, you’ve got video, you’ve got PDFs. You’ve got, you know, you’ve been in the space long enough. We’re in a digital world right now. And I think, you know, what it really is, is just that certificate of ownership that that a token on the Ethereum blockchain that signifies the ownership of that digital asset. And you know, there’s some of those digital assets that are on the blockchain. Some are, like decentralized space, but
John Paul Mains 05:37
to kind of design defining it as kind of like a collectible. So does that have some or a token? I guess? So that is the NFT. So what gives that thing value? I mean, yeah. I mean, if I threw a picture out there of a stick, that’s like, I mean, I mean, what, what makes these things valuable?
Ted Jones 05:57
Well, I know you John Paul. I mean, I, maybe to me, that stick has a little bit of value, because you published it. You Kurt, you, you mentioned it on the on the blockchain. And the value comes from who creates that, right? It’s all and that’s the term right now, the creator economy, right, is that NF T’s are enabling this creator economy where digital artists who normally didn’t have a easy way to sell their art, or really be able to garner an audience and, and push that art to someone, their fans, their community, they’re there, there are people that give that that aren’t value.
John Paul Mains 06:49
So we like had Taylor Swift here that kind of took over Tampa here for a few days. And so she put out an NFT, it’s hers, she’s the originator on it, it would be way more valuable than if I created an NFT with her picture on it. Nobody cares about me first. So if she’s put that out there and somebody bought it, it would be extremely valuable is what you’re saying. Right? Right. Yeah,
Ted Jones 07:17
that’s a good example. I mean, Taylor Swift would, it would be easily verified that Taylor Swift actually did that. Right. And there’s a there’s a big thing in the NFT space called, oh, I can just right click and save that. Yeah, we’ve been in the web long enough. We, you know, we, we were, you know, viewing source on HTML code years ago. And, you know, yeah, you can right click and save any image. But it’s not verified to that smart contract. Right. It’s not a token that Taylor Swift’s fans went and made a purchase. And that’s what I think you got the right example there.
John Paul Mains 08:01
If I, let’s say, I bought that, and it probably be a zillion bucks. And I wanted to sell it and make some money off it and that person wanted to sell and that person wanted to sell it does, is it retaining its value? If it keeps getting sold and sold and sold? I’m assuming it is always able to point back to the originator. But
Ted Jones 08:18
yeah, I mean, that we I mean, we’re still early, right? I mean, we’re in a lower time of what digital collectibles are meaning the value is lower than what it was. And there’s all these cycles, and, you know, the, you know, that’s where I’m trying to separate the money from the tech, right? Because you it doesn’t matter if Taylor Swift, you know, launches an NFT project that only has 1000 digital pictures of her on stage or whatever, or different pictures of her on stage. But come five years from now, it’s easily verifiable that these are the people that purchased that NFT when she first launched it, it may be it was her true fans, maybe it were was people that had access to it, you know that she gave privileged access to it or something, and it then allows benefits later on down the road. Right. So because then live, it just remains.
John Paul Mains 09:27
It’s down the road. So can you elaborate on that?
Ted Jones 09:32
Yeah, and I think one of the things I’ll get into loyalty, obviously, is an expanding area of NF T’s where you can you know, actually, I’ll just jump into it now but Starbucks, right? Like, like Starbucks, like Starbucks right now is kind of in their Beta program of their what they’re calling Starbucks Odyssey. And Starbucks Odyssey is an extension of their Starbucks Rewards program. You know, and the general loyalty program is, you know, you buy so many, you know, my products, you get so many points so that I can reward you with more of my products and that kind of stuff. Yeah, yeah. And then okay, well, you know, you’ve got so many points now, you know, we’re gonna give you a, you know, a free Starbucks mug, you know, and Starbucks is interesting, because not only do they sell coffee, there’s a lot of loyal Starbucks fans that collect their coffee mugs, my brother in law, you go to his house, he has Starbucks mugs from all over the place. Like I, you know, I’m not big on Starbucks. But yeah, you know, he, I don’t know, when he started this collection, I should ask him, but you know, he’s got him from all over the world. He spent years in China, he’s got, you know, a Chinese mug, you know, there’s a Starbucks in China. So he’s got the mug for it. But, you know, that loyalty program, and the extension that they’re doing into NF T’s, is kind of building up that community of their fans, right, they’re starting to see a, a purchase process of these, these digital assets. And it’s very new, right? You can sign up to be on their waitlist right now. But they’ve had two NFT drops, they had one in March. And really, they just had their second NFT launch last week, and it was called. What was the cause? Of Oh, the first store collection, and basically it was they partnered with an artist. And as you know, if you go into a Starbucks, you know, they have different art throughout their stores, but they partnered with an artist to create a collection of their first store. And all of these are different based off of rarity, they each have, you know, maybe a different, you know, look and feel to another one. So that’s, that’s the other aspect of it of NFTS is that they, they’re unique, right? There’s, they’re no, they’re not the same. And that’s what makes them you know, have value to is some may have different trades than others. And so, Starbucks really was able to launch this collection that says, hey, you know, you may get a very specific NFT that has very rare trades, it’s going to be worth this many reward points.
John Paul Mains 12:59
So it’s kind of like, some ways you think about it’s kind of an adult version of the McDonald’s Happy Meal. And the toys you get in there.
Ted Jones 13:06
Yeah, yeah. But
John Paul Mains 13:09
it actually means something, I can actually use it for something rather than it just Oh, yeah, my parents go through the garbage. And when I don’t want I’m turning my back.
Ted Jones 13:16
Well, if only you could take all those McDonald’s toys and then get some type of return on that right either, either from McDonald’s or, you know, from a secondary sale. Obviously, there are some McDonald’s toys that have a collectability about them. Well, there you go.
John Paul Mains 13:32
We need the adult Happy Meal from McDonald’s so that we can collect NF. T
Ted Jones 13:38
worthwhile. So there we go. Off to do some research. See if what kind of adult happy males are out there? Yeah, good.
John Paul Mains 13:46
Yeah. So yeah, I totally get it on the loyalty side now. Does you know how it gets in the business case in the Starbucks, in this case, you know, they’re handing out these NF T’s and people are collecting them and possibly even selling them off. And so it creates a whole community it sounds like that businesses could take take advantage necesite advantage of but leverage this for greater customer engagement at the end of the day, so yeah, I don’t lose customers. If I’m Starbucks, I want people more people coming into my location. I don’t want them go into the coffee shop down the street. I want them to continue coming to me because there’s value in them continuing to come in through my loyalty program and here’s the latest way that you know, in especially for the younger audiences that are out there the I guess the 18 to 30 year
Ted Jones 14:42
old digital natives work.
John Paul Mains 14:45
Yeah, this is how they work. This is this is what they know they’re used to trading goods in a digital space from I guess online games and buying stuff there. They love digital goods. They get it so I guess this is the younger generations way. One Lt programs and FTEs
Ted Jones 15:02
Yeah, and, you know, Starbucks, I think they’ve they’ve, you’ve mentioned kind of these fans and building that community, you know, in this NFT space, a lot of projects will create a Discord server. If you’re not familiar with discord, you know, it’s, uh, you can create a server where it’s just chat channels, basically, you have different channels related to specific subjects, whether or not it’s upcoming releases, or it’s, or it’s different perks from a specific NFT that you might have. So, you know, that but community building is a big aspect of this. And, you know, there’s community management, people that are in there engaging with these people every single day. So actually, I was looking at the guy’s Twitter, who, he’s the Community Manager in discord for the Starbucks NFT project. And so, you know, at that same time, they’re slowly allowing people enter their Discord server, you know, at the same time, they’re kind of ironing out these kinks in this, this technology, because what I’ve realized is, you know, in this day and age, just the communication travels fast, and any little technical issue you might have, like, Starbucks did have a technical issue on their first NFT launch. And, you know, a lot of it was dependent on maybe a previous NFT that they might have owned, right, and being able to verify that to be able to move into the next step of that loyalty program. So, you know, there’s a lot of communication that goes on inside those discord channels that, you know, allow them to engage one on one with their loyal supporters.
John Paul Mains 17:03
Very cool. Yeah. So it gets at the end of the day, what this really means is, I’ve tried to regurgitate it back into NF T, is basically a digital collectible that isn’t, doesn’t just have to be art. But businesses can leverage this in ways, at least, for what we’re talking about to date loyalty programs for engaging, especially with these younger audiences that are out there that are used to doing this kind of a transaction in it creates greater value beyond just yeah, the that the hat McDonald’s Happy Meal, it actually literally has value, which that which creates community around the whole concept, but it’s still the Wild Wild West, it seems like there’s gonna be a lot of interesting things coming out a lot of interesting case studies, I think on this topic, but we’ll continue to explore that. So yeah, definitely.
Ted Jones 17:52
We’re excited for it. Yeah.
John Paul Mains 17:54
It simplifies it a lot for me, because, truthfully, I mean, until we started talking, I was like, I don’t know what an NFT is, I would never use this day out, get this stuff. But if what you’re talking about makes a whole lot of sense. From a business perspective, it’s it takes it out of being some kind of esoteric thought out there. And that’s the elders buzz. But now it makes a lot more sense on how do we in starts making mistake? How do we start over doing this? How do we start using this as a business? How do I start engaging with my audience out there using NFT’s? And so there’s a lot of studies that are starting to come up, and we’re going to address those here in the future. So definitely, awesome. Awesome. All right. So that’s it. We’ve kind of reached our, our end here. So follow us on our channels, we’re going to be continuing to do these on a regular basis, talking AI, NFT, whatever bleeding edge stuff that we’ve got coming out here. Be sure to follow us here on wherever you watch this. Obviously, you can find us on youtube or LinkedIn.