Instagram wants to try out new business models for content creators

NFTs are digital goods that are stored on a blockchain and authorised and sold independently of a central entity like Facebook or Google. This gives computer codes similar properties to items in the real world. The most common are digital artworks – whoever buys an NFT also buys the ownership rights of that NFT on the blockchain where it is stored. NFTs received attention in 2021 due to a number of high-priced sales; however, most recently the NFT market has shrunk again and prices have also declined significantly.

“Digital collectibles” on Instagram

Instagram is testing trading NFTs in a first, limited test phase, in which some Instagram users can also display their NFTs on their profile. This follows the example of Twitter, which had already introduced a similar function last year. In this way, Instagram wants to monitor the supply and trade of digital goods in order to get a feel for the business and its potential.

The process is designed in such a way that the people from the test group have to link their NFTs via third-party digital wallets in the app. Compatible wallets include Rainbow, MetaMask and Trust Wallet; Coinbase, Dapper and Phantom are to follow soon, according to Meta. This should be possible for NFTs on the Ethereum, Polygon, Solana and Flow blockchains. For better visibility, NFTs will be visually highlighted with a special visual effect. Another feature is the possibility of using NFTs as avatars. Verified NFT owners can also share their NFTs with their followers on Instagram. The offer is free of charge for the time being.

First step towards blockchain technologies

With the prospect of blockchain technologies becoming more prominent in the future, it is safe to assume that Instagram’s push is paving the way for something much bigger. According to Mark Zuckerberg, this is primarily an experiment. “This is just the first step,” he told the Impact Theory podcast. “We think that here’s an important technological direction for the world, and I always believe that if you think something is important, you should work on it.”

Meta is clearly looking for new business – for example, it plans to launch “digital collectibles” on Facebook as well. Since content can be shared between the company’s different platforms, Facebook’s NFTs are also to be displayed and shared in Instagram stories via AR stickers. Other possible applications would include NFTs that can also be scanned as admission tickets or credit cards. The possibilities are wide-ranging; it will be interesting to see how the pilot project develops.

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