The Sayl platform provides marketers and business owners a convenient way to manage several popular NFT use cases. Next to loyalty membership programs and Proof of Attendance, other use cases are natively supported such as Digital Twinning. But what is digital twinning and why would Digital Twin NFTs make sense for your brand or business?
Let’s first start with some theory. Digital Twin is the process of copying or creating only one digital version of a physical product, service, or asset. Or like IBM puts it, “digital twins are a virtual representation of an object or system that spans its lifecycle, is updated from real-time data, and uses simulation, machine learning, and reasoning to help decision-making.”
In simple words, a digital twin is a digital replica of a physical item.
This digitized version of a physical product is not limited to one single atomic product, and there is certainly not a one to one relationship between digital twins and NFT. Meaning, you can do digital twinning without using NFTs. For example, in the airport industry several companies are already offering Digital Twins to accelerate the understanding of complex systems, the exploration of hypothetical changes and the enabling of faster and better business decision-making. The Hong Kong International Airport Authority for example is using DT.
In combination with Internet of Things (IOT), the digitized virtual model accurately reflects the real object or system through sensors that actively relay data linked to its functionality and environment to its digital counterpart in real-time. Any change in the physical object or system will lead to a change in the digital representation and vice versa. All this data will enable new processes and services, such as predictive maintenance, which uses data analytics to predict when a machine is about to break down, so it can be fixed before breaking down. As such, digital twins are a crucial component of the enterprise metaverse.
When talking about a digital twin NFT, we talk about the tokenization of a physical asset in a digital format, and storing that digital file on a DLT (Distributed Ledger Technology). Unlike fully digital NFTs which are the asset, this class of NFTs represent other objects or assets.
As mentioned in the first paragraph, the simplest variant of a digital twin is the digital representation of a single atomic item. But there’s much more possible. A concept like the metaverse can be simply defined as a digital twin of our world in which we live, operate, communicate, learn, research, play, entertain, buy and sell things. Digital twins can be considered one of the building blocks of the metaverse, augmenting the physical world and making it accessible from the digital realm.
The NFTs that represent real-world objects provide a reliable and immutable way to track the history, collect key information and provide a shared digital view of the object. It acts in the first place as a seal or certificate of authenticity.
The NFT backing an asset does not replace a court when disputes arise but it is a huge step forward in the source of evidence. A comprehensive immutable history reduces the room for disputes as it becomes more complete.
As time goes on, the amount of data recorded to the NFT increases enabling it to become the primary source of ownership history.
Reading the above, you can already create a mental picture for what kind of products digital twin NFTs are extremely interesting for: products that are valuable enough so you want to prove ownership. That being said, from a legal point of view, there is no straight relationship between owning the NFT and owning the underlying asset, so be aware of this.
Having a detailed history of ownership and traceable provenance generates more value for the underlying asset. With the history available in an accessible digital form, not only does that reduce the fees associated with transfer but it also is a form of fraud protection. The longer the history is, with verified dates and identities which can be checked, the harder it becomes to provide false information be that about price or other pertinent details.
The area that has received the most attention to date is taking valuable real-world assets like real estate, vehicles, luxury items or art and creating a digital twin for them. These asset-based NFTs can then be used to track providence and create an immutable history.
Even more interesting, creating NFTs of such assets can better enable fractional ownership, where fungible tokens (FTs) are issued against the NFT representing shares of ownership of the larger asset. The “boss” NFT sets the rules and facts that surround the asset but rather than a single owner there are several owners each with equivalent rights to the shares of it they own. Each sliver can then be independently sold or exchanged. Smaller discreet pieces with lower price tags and established parameters make transactions significantly easier.
Are digital twins interesting when you sell cupcakes? Probably not, unless you produce something where legally you need to be able to prove provenance. Are digital twins interesting when you sell higher priced items to your audience? Definitely! Using the Sayl platform you can not only generate the NFT and link it to the physical asset, but also create tangible benefits to the owner of that NFT. After all, when selling a luxury item like an expensive watch or car, you want a premium relationship with your customer, where you can nurture that relationship along the road, turning it in even more business for yourself.