Human beings have a biologically driven desire for ownership. Our human nature is profoundly connected with our sense of ownership and possession even from a very young age. Many scientists argue it’s a direct result of a well-established phenomenon called the endowment effect. In short: we tend to value items that we own much more highly than we normally would, just because they are ours. According to Noah Harari’s Thesis as published in his Sapiens book, ownership is a community thing, a manifestation of the ability to share beliefs across a group of people, inherent to humans. The key here is again, the psychological ownership concept; we feel so invested in something we own that it becomes much more than a possession. It becomes an extension of ourselves and contributes to our perception of the self.
First published in 2003 (Pierce et al,2003), psychological ownership argues there is a cognitive and emotional state that individuals attain when a target object is perceived as “theirs”. It’s the feeling of ownership but intertwined with the belief of exclusivity. As many marketers will tell you, the value of an item is not inherent but rather defined by what we project on it. Something is valuable when it’s ours or when we desire it.
NFTs and Ownership in the Metaverse Era
Some might say that the theories above are challenged as we are expanding into web 3.0 and the bright new world that is the Metaverse. Already fueling new business models, the metaverse sees companies investing in digital products such as outfits for avatars, virtual shops, or NFTs. Nike has been a pioneer in taking the metaverse strategy right; in 2021 the brand released virtual sneakers and outfits for the metaverse ecosystem as they acquired RTFKT, a company that specializes in virtual sneakers and NFTs. This type of digital content though challenges our very perception of ownership. An NFT is a unique token that exists on a blockchain, a digital “proof of ownership” of something digital or physical. An NFT is ours when we digitally own it rather than physically. But, as the word says, it’s intangible. How can we possibly feel it’s ours?
NFTs and the senses
Let’s go back one year to the turbulent Covid Quarantine era. As JoAnna Novak describes in her New York Times article “Months of lockdowns, Zoom cocktails, and elbow dabs have left us in a touch crisis. We’ve even developed a language that likens touch to basic sustenance and survival” In fact, touch is the first sense we develop and thus inherent to our very human nature. We touch something and we know it’s there; we develop bonds with it and thus feel we own it.
In the metaverse, the distinct lines between physical and digital are blurred from current perceptions. Current technology and infrastructure doesn’t yet allow the development of immersive virtual worlds where our avatars can actually feel what we own. As in the case of Nike, we still need to match the acquisition of an NFT with a physical counterpart to actually feel the product, and brands know it. Many of them are actually investing in creating a sense of community through ownership of their NFTs. This is not new; people have long built communities based on ownership. The strong sense of community and exclusivity is the key to overcoming the non-tangible nature of their NFTs. At least for now.
The truth is that touch is our first and definite connection with reality; we touch it so we know it exists. And so far human sense of ownership has been inherent in our tactile experiences. We touch it and we know it’s ours and thus has value for us. How can consumers develop those feelings with non tangible objects is crucial for any brand that wishes to enter the metaverse environment. Can NFTs and blockchain provide a solution to the problem by emphasizing the concept of endowment rather than the actual physical presence of the item? Maybe. What is certain is that even in the metaverse age, a human-centric approach is crucial for brands that want to create deep and lasting connections with consumers. Or as the Greek philosopher Protagoras put it ‘human is the measure of all things’.