Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – Business Intangible Asset Strategist – Risk Mitigator
Non-fungible token transactions are obliged to include valuation assessment, safeguards, and risk mitigation. Recognizing non-fungible tokens (NFT’s) are actually specialized forms of (business) intangible assets is essential to both sellers and prospective buyers insofar as ensuring authenticity, applying safeguards, and mitigating risk,
This blog advocates recognizing the (business) economic – operation reality that most businesses today, irrespective of their sector, stage, size, sales, location, products, or services, etc., are irreversibly dependent – reliant on intangible assets specific to enhance – sustain the valuation, competitiveness, revenue generation capability, and sustainability o brands, products, services, and missions.
This post represents a framework for business leaders, management teams, boards, and investors to compare – contrast the non-fungible token (NFT) phenomena to the business economic – operation realities + contributions of business things intangible (assets).
Much of what has been conventionally applied – relied, to develop and sustain the lucrative and competitive economics of a business are conventionally rooted in the…
- acquisition of capital to accumulate, develop, and apply brand specific tangible assets, ala,
- physical structures, property, equipment, and quantities of employees skilled in building, operating, assembling, conveying, and distributing particular (branded) products and/or services.
The intangible (non-physical) sides of and inputs to a business are frequently under-valued, not valued, valued for specific – narrow durations/contexts, or variously dismissed relative to their actual – particular contributory roles – value adds to a business, brand, product, mission, or service. That’s because, in part, business things intangible are (conventionally) considered readily replaceable, duplicable, and having relatively brief value-materiality-functionality life cycles.
Today, and for the foreseeable future, however intangible – non-physical assets are overwhelmingly and irreversibly the dominant drivers’ which every business I am familiar is increasingly reliant and dependent.
Business leader development and introduction of particular forms, contexts, and applications of the right intangible assets, especially…
- intellectual capital (knowledge, knowhow, experiential expertise),
- structural capital (particular – specific processes and procedures) and
- relationship capital (associations, connections, affiliations, etc.)
Introduced at the right time, in the right way, at the right cost, can converge to contribute to an attractive, competitive, lucrative, and resilient + sustainable ‘business operating culture’.
The NFT (non-fungible token) space is a novel manifestation – extension to the above insofar as drawing attention to things intangible embodied in NFT’s and exploiting same.
We are obliged to recognize ‘non-fungible’ translates as things which we presume are – can be assets. NFT’s are often privately – proprietarily held, and are characterized – interpreted as being particularly – authentically unique ala one-of-a-kind, not receptive to counterfeit, infringement, or (mass) duplication, e.g.
- digital – virtual collectibles ala Jack Dorsey’s first Tweet, or a Banksy, and art of course, but not solely illustrative works, also portrayals of fashion or an essay, article, or ticket/coupon to a virtual event.
Non-fungible tokens may exist in various physical-digital forms, ala individual tokenisms, such as a mark, sign, symbol, coin, domain name, personal keepsake, or souvenir, etc.
Non-fungible tokens are considered to hold – embedded with particularly unique variations of information, imagery, and/or data-representation, etc., in which all collectively – collaboratively, or combinations variously contribute to – have a bearing on an NFT’s…
- validation, authenticity, providence, origination, and ownership, etc., hence valuation.
- attractivity, marketability, and valuation.
Non-fungible token transactions can (relative to transactions witnessed to date) include variations of buys-sells-trades in unconventional ways, which translate as executions may be outside the (present day) scope of conventional (business – asset) valuation and/or taxation. Most are now being explored legislatively for amendment + remedy.
Some non-fungible token transactions are portrayed – marketed as unique one offs or anomalies. NFT offerings may be characterized as ‘tokens’ constituting – holding specific symbolic significance with the NFT (buy-sell) marketplace.
Non-fungible token transactions often spark interest among IP (intellectual property) law (services) sector, particularly the ‘tokenization’ process.
Tokenization allows (essentially) particular-works ala NFT’s, such as GIFs (graphic interchange format), music, art, literary, marks, inventions, images, etc., to be transformed ‘digitally’, perhaps as distinct – standalone assets offered for sale in relevant marketspaces.
- Tokenization – a process for replacing sensitive (NFT) data with unique identification symbols that retain the essential information about the data without compromising its security.
- Tokenizing – tangible – physical things, renders buy – sell – trade transactions more efficient and mitigates vulnerability-probability-criticality of fraudulent derivatives.
The valuation (asking price) of non-fungible tokens offered in a transaction, occasionally appear quite speculative, i.e., create-able – establish-able by finely tuned publicity directed to a presumptively targetable market where interest + demand may exist. Experienced + (intangible) asset specific due diligence is beneficial insofar as projecting (NFT) valuation sustainability as well as vulnerability to particular risks.
This post, and each post published @ Business Intangible Asset Blog, is developed, researched, written, and published entirely @ the experienced hand of Michael D. Moberly.
The ‘Business Intangible Asset Blog’ is experientially researched and written by Michael D. Moberly (accumulating 1100+ long form posts to offer readers ala business leaders, management teams, boards, and investors with reliable – experiential perspectives for distinguishing, developing, valuing, and safeguard all categories of intangible assets for business leaders, management teams, boards, and investors across sectors.