Physical NFTs: Bridging the Gap Between Digital and Physical

In this article, we will explore how some retailers, wanting to capitalize on the trend, bridge the gap between the digital and physical worlds for NFTs.

Though NFTs, or non-fungible tokens may seem a bit obscure and not everyone may be able to define them, they have already entered the lexicon and popular culture. NFTs represent unique goods in the form of digital assets that live on a cryptocurrency blockchain and can be bought and sold. Besides digital artwork, NFTs can also be photography, music, videos, tweets, memes, or any kind of easily reproduced digital file.

NFTs received huge media attention after a number of high-profile sales in early 2021. Billionaires, tech moguls and celebrities like Mark Cuban, Gary Vaynerchuk, Elon Musk, Snoop Dogg and Jack Dorsey have participated in the trend. Dorsey sold the first tweet he ever posted as an NFT on Twitter for over $2.9 million.

NFTs have real industry potential and not just in the digital world. They can be applied to so many industries as they hold the key to bridging the gap between virtual and physical worlds. First, the NFT is connected with a physical product. This connection needs to be secure so that no one could access the NFT technology. One way to do this is securely encrypted NFC tags, also the blockchain is essential for the incorruptible protection of data.

What are Physical NFTs?

As we know, NFTs are stored on a blockchain and act as verifiable proof of authenticity and ownership for all kinds of assets. Physical NFTs, also referred to as phygital NFTs, are digital tokens tied to real-world assets. Phygital NFTs combine the digital and physical and can be used to prove ownership over real-world assets, such as artworks, fashion goods, property deeds, tickets, and more.

There have been massive transformations in the way consumers shop for products and services. Nowadays almost every activity, including grocery shopping, watching the cinema and collecting your favorite pieces of art is digitalized. Phygital basically defines any product, service or experience which helps in the merger of digital technology with different physical elements.

Some of the examples of the ‘Phygital’ phenomenon include app-based grocery store pick-ups, QR code restaurant menus and targeted ads on Facebook. Businesses are another example of using “Phygital” to their advantage in the use of digital push notifications that help in promoting physical stores by using geolocation to invite customers with a coupon when they are in proximity to the store.

The association of physical artwork with NFTs has helped many artists successfully sell their artwork through NFTs ensuring safeguards against counterfeiting, fraud or plagiarism. This enables artists to interact directly with the buyers.

Moreover, many popular fashion brands, such as Prada and Nike, have entered the world of NFTs and improved customer experiences.

Why are Phygital NFTs Important?

The importance of Phygital NFT is an obvious spotlight in any introduction to Phygital experiences. Here are the main reasons you should choose these new types of NFTs.

1. Proof of Ownership

The foremost spotlight of NFTs refers to the digital scarcity they can create, in contrast to other assets. Digital art has been going through a period of renaissance, particularly for the newly discovered scarcity in the field. However, the growth of a Phygital NFT marketplace in the latest occasions has been pushed more by authenticity rather than scarcity. For example, diamond is clearly a scarce resource. However, it is valuable only when it affords proof of authenticity, such as a certificate from professionals. On the other hand, you can look for better and extra genuine proof, such as the diamond featured in a major motion picture.

You can notice viable prospects for the future of Phygital experiences within the area of NFTs. First of all, you can notice that the authenticity of an asset determines the status conferred on its proprietor. With a deeper and more interesting historical past, an asset could have an aura of authenticity and promising enhancement in worth. NFTs might present the best proof of ownership, which can play a crucial role in adding value to physical objects.

One of the examples to showcase the uses of Phygital NFT projects for proving authenticity would refer to wine. Imagine storing the important details about a wine’s possession and provenance on a blockchain. As a result, you wouldn’t have to face the necessity for authentication alongside lowering the risk of fraud by considerable margins. Non-fungible tokens can improve the sense of authenticity associated with the wine by providing better proof of its provenance. Thus, Phygital NFT could serve significant enhancements in the perceived worth of the wine. The instance of wine showcases the potential of blockchain to exert a major influence exceeding the mere modifications in source code. The Phygital NFT trend could change the traditional precedents in figuring out the value of real and tangible assets.

2. More Augmented Reality in NFTs

The possibility of using AR technology is the second important highlight in Phygital non-fungible tokens. Augmented reality has paved the path for the unification of physical and digital experiences in numerous attention-grabbing new ways. The hunt for Pokemon in real-world locations was only the start. Non-fungible tokens and augmented reality can come together for some unique purposes. NFTs can enable possession of the revenue-generating virtual real estate and property in several AR worlds and video games. The example of AR billboards showcases the effective use of Phygital NFT for bridging the gap between physical and digital experiences. Virtual advert area sales and purchases in the form of NFTs would serve promising value in areas with most foot site visitors.

However, the biggest advantage of a Phygital NFT marketplace with AR-powered NFTs would be seen within the gaming sector. The gaming business has better chances of landing significant benefits with the mix of AR and NFTs. Some NFT video games, such as ZED RUN, use augmented reality to enhance experiences for players. ZED RUN features an AR app enabling its users to summon racehorses that would be seen in front of them in augmented reality.

Another game, titled Digi Dragons, is modeled on a turn-based RPG-style game with gamers battling each other. The mobile AR app might present a novel gaming experience to the players. In addition, many other creative applications with Phygital NFTs are yet to come in the future. For example, an NFT variant of Pokemon Go could be a possibility on the table for a new breed of NFTs.

3. Better In-person Experiences

The digital world has had a higher hand over the physical world in terms of user engagement in the past few years. More and more people are utilizing smartphones and digital units for a significant portion of their daily lives. Smartphone possession numbers are piling up radically, and almost 27000 people come online every hour on average. There have also popped up some concerns about the trade-off for such a rapid scale of innovation. The involvement of users in digital experiences can overshadow human interaction and connectedness. All of these occasions could propel the world towards completely virtual reality.

The introduction of Phygital NFT projects might guarantee the right balance between both worlds, thereby preventing the need for competition. In the case of an NFT, the core component, i.e., the tokenID, is digital in nature and stored on a blockchain.

On the other hand, the value obtained for the NFT, i.e., royalty funds or transaction fees, is in the real world. The instance of occasion ticketing can showcase the use of NFTs for bridging physical and digital experiences without any dominance. Non-fungible tickets can help in eradicating the issue of fraud and ticket scalping while also serving programmable advantages. For example, entry to special merchandise of a rock band with NFT tickets to the band’s live performance. Now, users can monetize or trade the benefits or perks they receive with an NFT ticket. As a result, the ticket reserving business can obtain general enhancements in effectiveness.


With the global digitization upsurge and the introduction of NFTs to the market, physical NFTs have the potential to seamlessly bridge our digital and physical lives by changing how we interact with real-world items.

There is potential in developing and maintaining ownership of innovative digital content to help evolve your personal and professional brands. For example, in the future, you might be able to buy a phygital car existing both in your driveway and digital wallet, which will grant you virtual access to exclusive privileges. Owning the car you could rent it out or use it as collateral in a financial application – all without the need for an intermediary facilitating the transactions.

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