In recent years, blockchain technology has sparked interest across industries, but mainstream adoption has largely remained elusive. However, adoption levels are beginning to change as these technologies are used in new ways. In their article, “The Rise of Consumer Crypto,” Steve Kaczynski, author and co-founder of dGen Network, and Scott Duke Kominers, HBS Sarofim-Rock Professor of Business Administration and Principal Investigator at D^3’s Crypto, Fintech, and Web3 Lab, explain the changing landscape of consumer crypto.
Key Insight: Digital Assets and the Future of Blockchain
“NFTs…are a general and flexible solution for establishing and tracking ownership across all manner of digital assets.” [1]
Crypto applications are moving past the technical, security, and regulatory issues that characterized the early cryptocurrency market. Businesses are increasingly exploring blockchain applications beyond traditional cryptocurrencies, recognizing that non-fungible tokens (NFTs) and other digital asset functionality could increase consumer adoption. Ownership of NFTs (through digital wallets) means that individuals own and control their accounts and related data, versus accessing accounts and data on sites maintained and controlled by third parties. As Kaczynski and Kominers explain, the unique features of NFTs provide new benefits for consumers and opportunities for companies.
Key Insight: Enhancing Security, Identity, and Control Through Blockchain
“Blockchains are massive global ledgers that use decentralized cryptographic protocols to record information in a way that is publicly verifiable, secure, and immutable.” [2]
A significant advantage of blockchain technology is its potential to improve flexibility and security across digital interactions. Blockchains create a publicly verifiable record of identity and ownership, making it nearly impossible to counterfeit digital assets, including NFTs. This feature is particularly valuable in contexts where security and identity verification are critical, such as event tickets, art, music, and credentialing. Control is also important, for example, individuals can use NFT accounts to manage their own personal healthcare data, and transfer it digitally among providers.
Key Insight: The Power of NFTs in Branding, Engagement, Community-Building, and Adoption
“NFTs publicly surface a brand’s fans and connect them to one another within a mutually reinforcing network.” [3]
NFTs have emerged as a powerful tool for brands looking to build digital communities and foster a deeper sense of customer loyalty. Kaczynski and Kominers observe that brands like Starbucks, Nike, and Time magazine are experimenting with NFTs to strengthen brand attachment by giving customers a unique stake in the brand’s digital presence. By connecting users around shared interests, NFT tokens encourage brand loyalty and create opportunities for consumers to actively engage with their favorite brands’ communities through rewards programs and unique perks.
Kaczynski and Kominers also emphasize that NFTs have evolved beyond speculative assets into functional tools integrated into daily consumer experiences. Digital assets like virtual event tickets, coffee loyalty cards, digital trading cards, and online course certifications provide consumers with tangible value, making blockchain technology more approachable and accessible. NFTs like this enable consumers to “enter the blockchain ecosystem” related to their identities and communities, rather than through abstract financial transactions of cryptocurrency.
Why This Matters
For business professionals and C-suite leaders, understanding the practical applications of blockchain beyond speculative cryptocurrencies is essential for navigating today’s digital transformation. Kaczynski and Kominers illustrate how NFTs can unlock new ways to engage with consumers, streamline operations, and safeguard consumers’ digital assets and identities. As businesses adapt to a rapidly evolving digital landscape, embracing these tools can help firms build loyalty, boost security, and stay relevant in an increasingly decentralized world. From a brand visibility perspective, this trend represents an opportunity for companies to cultivate “superfans” who become organic promoters of their products, from virtual sneakers to concert tickets to HBS executive credentials.
References
[1] Steve Kaczynski and Scott Duke Kominers, “The Rise of Consumer Crypto”, Project Syndicate (February 2024): https://www.project-syndicate.org/onpoint/consumer-crypto-nfts-business-use-cases-expanding-by-steve-kaczynski-and-scott-duke-kominers-2024-02
[2] Kaczynski and Kominers, “The Rise of Consumer Crypto”: https://www.project-syndicate.org/onpoint/consumer-crypto-nfts-business-use-cases-expanding-by-steve-kaczynski-and-scott-duke-kominers-2024-02
[3] Kaczynski and Kominers, “The Rise of Consumer Crypto”: https://www.project-syndicate.org/onpoint/consumer-crypto-nfts-business-use-cases-expanding-by-steve-kaczynski-and-scott-duke-kominers-2024-02
Meet the Authors
Steve Kaczynski is a tech entrepreneur, consultant, and commentator who coauthored the first Harvard Business Review article about NFTs with Professor Kominers. He and Kominers wrote The Everything Token, a book about how businesses can authentically use NFTs as a software solution for their business, with one of the world’s premier business publishers – Penguin Publishing.
Scott Duke Kominers is a Professor of Business Administration in the Entrepreneurial Management Unit, Co-Principal Investigator of D^3’s Crypto, Fintech and Web3 Lab, a Faculty Affiliate of the Harvard Department of Economics and of the Harvard Center of Mathematical Sciences and Applications. His first book is The Everything Token: How NFTs and Web3 Will Transform the Way We Buy, Sell, and Create.