While teasing the possibility of eBay accepting bitcoin, eBay CEO Jamie Iannone this week pointed to the growth of non-fungible token (NFT) sales on the eCommerce site as the reason its on-again, off-again flirtation with cryptocurrency may be on again.
That came in the wake of Friday’s more formal press release Friday (Feb. 25) by Japanese eCommerce giant Rakuten that it is launching an NFT marketplace.
Despite NFTs’ raging success within the crypto world, the mainstream market for the media-bearing, unique form of cryptocurrency is still more marketing and hype than reality.
But with the two eCommerce giants throwing their hats into the ring as NFT marketplaces, it’s increasingly clear that mainstream eCommerce firms are determined to ensure they are not left behind if the hottest new cryptocurrency trend is embraced by the general public as strongly as marketers for brands like Nike, Samsung, the NFL and Universal Music Group are hoping they will be.
NFTs are a multibillion-dollar market, but one that is still dominated by crypto, and still very unfriendly to the Main Street buyer. For one thing, top NFT marketplaces like OpenSea and Rarible still price NFTs in ether rather than dollars, requiring buyers to provide know your customer (KYC) proof of identity.
See also: How to Buy an NFT in 19 Easy Steps
Making the buying process easier than crypto-first NFT marketplaces like OpenSea gives mainstream eCommerce retailers determined not to be left behind by a new technology the opportunity to cut crypto NFT marketplaces out before they can conquer the mainstream market they hope will arrive.
eBay Tiptoes In
In some ways, eBay is farther along the road to becoming a significant NFT marketplace than any other eCommerce leader, but it wasn’t intentional Iannone told TheStreet Feb. 27.
“We did change our policies last year so that you could trade NFT on the platform,” he said. “…So even without announcing anything or doing anything, people started trading NFT on a platform.”
Iannone suggested, however, that it’s an area the firm is going to focus on more closely, saying in the report that the NFT sales on eBay reminded him “of many years ago when people just started selling cars when we didn’t even have a vehicle business at that point.”
Adding that “we’re seeing the same type of thing,” with NFTs, Iannone noted, “eBay will be the place where people trade goods, whether they be physical or digital. So over time, we want this to be the marketplace for sustainability.”
Rakuten Jumps In
Rakuten’s entrance into the NFT business is more aggressive than eBay’s. NFT sales have been growing organically since last May, when the company quietly allowed their sale.
In its Feb. 25 press release, Rakuten made clear that it’s going after NFT makers and sellers as well as buyers.
The new Rakuten NFT site “is a service that provides a marketplace for users to purchase NFTs, as well as peer-to-peer buying and selling of NFTs, in a range of areas such as sports and entertainment, including music and anime,” the release stated.
Buying NFTs from a trusted third-party retailer to ensure provenance is another area where eCommerce can take a lead. It’s a subject that the crypto industry marketplaces are currently finding to be a bigger and bigger problem as anyone can use any image or video clip they can get their hands on to mint NFTs.
The theft of artists’ intellectual property and fraudulent claims about the provenance of the media contained on NFTs is a growing problem — and one likely to snowball if the recording industry follows artists ranging from Snoop Dogg to Dolly Parton and firms like Universal into the NFT business and starts making songs available as NFTs rather than just using them as fan merchandise.
While the Rakuten release also delved into intellectual property, or IP, it stopped short of promising full oversight in this regard, which would be a huge undertaking for the broad NFT market.
But, in announcing partnerships with a variety of anime, fashion, gaming and music brands, it will provide a degree of provenance assurance. That will be vital if NFT marketplaces are to avoid turning into Napster.