Physical NFTs Could Kill Planned Obsolescence

And Maybe Save the Planet Too

They make everything like shit these days. This is a universally held opinion.

You can buy a top-of-the-line product and it will break down within a year. Conveniently, the warranty will have expired by then.

I did some yard work a few weeks ago. I bought a shovel for over $30. Went home and it broke in half on the first scoop of dirt.

That’s hardly a rare experience anymore. But there’s a reason for all of it.

Planned Obsolescence

Older folks love talking about how much better things were when they were young. That’s because they lived during a time before companies universally adopted planned obsolescence.

Planned obsolescence is when you make your product good enough to sell but crappy enough not to last.

Instead of trying to fix the product, most people just buy another. The average consumer doesn’t have the time or energy to fight for a refund on every single purchase they make. Especially on items under $100.

What’s the result? Nearly everything you buy is a piece of garbage.

Companies do this because it is profitable.

Imagine 2 battery companies. One of them makes amazing batteries that last for generations. The other makes batteries that last a month.

For the good battery company to remain competitive, it must sell those batteries at an exponentially higher price. And most people aren’t willing to pay that higher price.

“$50 for a single battery? Are you insane?! This other one is $3.”

Little does anyone realize that the more expensive battery would have provided more value in the long run.

The company that uses planned obsolescence will continue to exist and remain profitable. The other one goes out of business.

This dynamic plays out with every industry you can imagine. It’s a Darwinian survival of the fittest. And the companies who adopted planned obsolescence survived and thrived. The ones who made quality products died out.

And it’s important not to blame the companies that do this. They are logically incentivized to compete in the free market. Our entire society is based on ruthless, economic self interest. If it weren’t them, someone else would be doing it.

This poorly designed system creates rampant waste and poverty.

Thousands of landfills are overflowing with obsolescent products. They simply have no use anymore. Not to the companies. Not to the consumer who bought them.

This dynamic also creates poverty because the wealth is being transferred from consumers to companies.

The consumers get crappy products that break down and don’t hold their value. Try and resell something you bought recently and you’ll see what I mean. You’re lucky if you can sell it for 50% of its original value.

All the while, companies rake in massive profits. Provide an objectively worse product. And put the true innovators out of business.

Let’s think about a concrete example.

Imagine how much wealthier we’d be if car companies built cars to last. All of them.

It’s easily within their capability to do so. But as it stands, it would decrease their profitability. And thus, create an opportunity for a competitor to beat them.

Thankfully, there may just be a solution.

NFTs

NFTs are programmable property.

NFTs are tokens that represent items. You can create an NFT for a picture. You’ll be able to verify ownership on the blockchain.

The best part is that you can easily transfer ownership of the item to anyone of your choice. Once you do so, you can’t turn around and try to take it back.

The only way to get an NFT is to create one or receive one from the owner.

NFTs are used for digital items… for now. But they have the potential to be so much more. They’ll radically transform our economy. Because they’ll shift the incentive structures.

NFTs and Physical Products

NFTs can end planned obsolescence forever. By representing anything that can be owned.

And it wouldn’t be hard to create a token for physical items either. This could simply be done with a barcode. Or something similar.

Here’s the thing about NFTs. The money isn’t in the initial sale.

It’s in the percentage of every future sale.

Let’s say I created an NFT for a picture. I could sell it for .001 Ethereum. Hardly a life-changing amount of money. But I can program the smart contract to give me a percentage of every future sale.

Let’s say I get 2% of every future sale of this NFT. The guy I sold it to turns around and sells it for 100 Ethereum. That nets me 2 Ethereum and I didn’t have to do anything.

NFTs have the potential to create generational passive income. So long as that token keeps changing hands, you’ll always get a percentage of that sale.

Here’s how this changes physical items forever.

NFTs = Death of Planned Obsolescence

You rarely get rich from that first NFT sale. It’s in the resales.

If every physical product had an NFT, companies could capitalize on every future resale. This fundamentally changes the incentive structures.

There would be a strong incentive to create products that last longer. The longer your product lasts, the more times it can change hands. Which results in more money for you.

Let’s imagine a car had an NFT. The company could lower the initial price. Make it super high-quality. And then collect a percentage every time someone sells it.

Right now, car companies don’t get a penny when someone resells the car. Imagine how differently they would make cars if they did?

This would create a dynamic that rewards longer lasting products. Instead of industries being dominated by consumer garbage, it would be the highest quality stuff around.

As more companies adopt this model, the planned obsolescence companies will lose market share and go out of business.

This would cut down on waste because we don’t throw everything out in 2 months.

And it would create wealth for society overall because products we buy would hold their value. Maybe even go up in value - you get to splurge and call it an investment!

Imagine buying a new car. You drive it for a year and then resell it for buying price. Maybe even make a profit. That’s unthinkable right now. But not with NFTs.

This would also help consumers track the value of everything they own.

It’s all too common that we fill our garage up with junk. Get tired of looking at it. Then, have a yard sale where we sell it all for a fraction of its original value.

With NFTs, every purchase would be an investment.

Final Thoughts

So, let’s imagine a world with NFTs representing every physical item.

1. Longevity & durability goes through the roof

2. Planned obsolescence becomes a thing of the past

3. We create less waste since items last longer

4. Every consumer purchase becomes an investment

5. True innovation is rewarded instead of punished unlocking countless new possibilities for the world to change

That sounds like a pretty good future to me.

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