Non-fungible tokens have taken the art world by storm. While the technology has been around for a few years, NFTs had their “moment” in 2021 when a number of high profile artists made headlines with multi-million dollar NFT sales.
The NFT ownership model, which doesn’t necessarily involve ownership of physical objects or intellectual property, was a brand new way of thinking about artistic property. Monica Eaton-Cardone, Co-Founder and COO of Chargebacks911, told Finance Magnates, “In a way, the traditional art market has always been an artificial bubble because we assign value based on abstract virtues like prestige, rarity and ascetics rather than concrete. “
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“Two pictures might look almost identical, but one is worth millions and the other is pennies. What the crypto gamers have done is develop a methodology that will allow prestige, rarity, and ascetics to be carried over to the digital world. It’s actually very smart. “
There were certainly some big questions about the long-term return on investment of NFTs. However, since NFTs gained popularity in the art world, a number of other use cases for non-fungible token technologies have emerged across the board.
NFTs beyond the art world
Dodo, a decentralized finance (DeFi) liquidity provider, told Finance Magnates that NFT technology can be applied to any area where there is a power imbalance between the creators and the (centralized) institutions that broker the sale of their works . With Dodos DodoNFT, NFTs can be divided among several owners.
“NFTs open up a whole new asset class,” said Dodo Finance Magnates. Technology is “democratizing an area that has traditionally benefited the mediators, who are the gatekeepers who stand between the creators and their audience.”
“As a technology, NFTs are downright transformative as they shift the balance of power from a few to many. In the long run, this means that creators can grasp more of the value they create and prevent others from co-opting their communities. And as technology advances, solutions that fractionate ownership will dramatically balance the economics of the creative economy and make its profits more accessible to all. “
However, the expansion of NFTs beyond the art world means that not only “creators” can benefit from the technology. While artists, musicians, and writers can certainly use NFTs as a means of building sustainable income, NFT technology can be used in a number of different industries.
Non-fungible tokens in the travel industry
For example, Raullen Chai, CEO of IoTeX, a company developing the Internet of Things using blockchain technology, told Finance Magnates that non-fungible tokens could be used in the travel industry.
“Imagine being rewarded by your favorite travel blogger for completing a specific itinerary,” Chai told FM. This is possible with “PebbleGo, which uses Pebble Tracker data to prove presence”, a concept developed by IoTeX. “In other words, the device knows you were there and can reward you for completing this real-life action. Since the data cannot be forged (like GPS data) it is much more reliable. “
“This can have all kinds of use cases aside from the travel blogger seducing her community with rewards,” Chai said.
For example, NFTs could be used to build connections between the travel industry and artistic creators. “A city could work with local artists to promote certain places. A local artist could reward travelers with a unique digital asset for visiting the studio. Promoters could spark a massive multiplayer scavenger hunt for digital assets. “
“The possibilities are endless and that is the potential to combine NFT-based digital assets with real-world action,” said Chai.
Identity, Licensing and Certification
Since non-fungible tokens are completely unique digital objects, NFT use cases have been recognized in terms of digital identity.
Harriet Chan, market officer at software development firm CocoFinder, said NFTs can be used to “tokenize important documents” including “ID cards, birth certificates, qualifications and licenses, and other non-interchangeable documents.”
Ankit Bhatia, CEO and co-founder of Ethereum-based social network Sapien, added that NFTs can essentially serve as the immutable ledger for cross-context accomplishments, whether they’re community driven or focused on educational credentials.
“I can forge a diploma or certificate, but an NFT-based certification cannot be counterfeited, especially if you can trace it back to a source like a university or an e-learning platform and make the token non-transferable,” he said.
Certificates of authenticity and ownership
In addition to certifying human identity and qualification, non-fungible tokens can be used to create certificates of authenticity or ownership for any digital or physical object.
Matt Zarracina, CEO of True Tickets, told Finance Magnates, “Many of the promising use cases of NFTs involve unique ownership of assets.”
These include NFT-based “real estate titles or patents” that IBM recently announced.
Asaf Naim, CEO and co-founder of Kirobo, told Finance Magnates, “You can use the NFT model as a contract or approval to create a clear ownership right.” Kirobo is developing a transaction reversal tool for the ERC-721 token standard , which enables consumers to undo NFT transactions.
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“So you can potentially sell anything (digital or non-digital) when you factor in the NFT: land, real estate, cars, and anything with unique value.”
NFTs in gaming
“Other areas where the scarcity and uniqueness of digital content creates value, such as gaming, are some of the biggest opportunities for NFTs in the short term,” continued Zarracina. “Gaming and esports are two of the fastest growing users of NFTs. They use the technology to protect virtual assets acquired while gaming or competing.”
Finance Magnates recently reported that gamers in a variety of gaming ecosystems have the option to unlock special accessories that can be added to their characters or the worlds they live in. In certain games these digital items can even be sold in real life – world money and large amounts of it.
Previously, these were platform-dependent in the game: errors, hacks or the suspension of a game could essentially wipe out the possession of valuable digital objects. However, with NFTs, digital ownership can go beyond a single gaming ecosystem.
Indeed, Zarracina stated, “NFTs allow players to securely sell virtual assets back and forth while taking their in-game currency with them when they leave, a practice currently being used in a number of games.”
Eaton-Cardone told Finance Magnates that using NFTs while gaming has the potential to create entire virtual economies.
“Even before the pandemic, the video game industry had already outpaced the movie industry, and it hasn’t even been around since then,” she said. “The gaming universe is huge. For millions of Americans and many more people around the world, the video game world is just as impressive as the “real world”. They would rather invest their time and money in upgrading their avatars than in their homes. “
“With NFTs you can show prestige and individuality. As video games continue to blur the lines between fiction and truth, the psychological appeal of NFTs is likely to continue to grow. And for gamers who spend most of their free time in a hypnotically immersive, deeply digital world, it may be understandable that they’d rather spend their money improving their avatar’s house than their own. “
NFTs in live events and experiences
Zarracina added that NFT technology can be used beyond gaming to “access or unlock future unique experiences.” Zarracina’s company, True Tickets, is focused on blockchain ticketing for live entertainment venues.
“We understand that in our work of digitizing live entertainment venues for all of their tickets, consumers are complaining about the loss of the paper card stub,” he said.
“The question, however, is whether someone complains about the loss of the ticket stub or their ability to evoke a particular memory or experience. Rarely is the former, and NFTs are in a unique position to perform a similar function, albeit digital, and evoke those memories and feelings. “In other words, NFT-based ticket stubs can serve as digital collectibles themselves.
Additionally, “NFTs can also help unlock unique experiences in the future,” he added. “For example, a sports team could offer season ticket holders incentives to play every home game in a season. Your participation would then unlock a unique NFT and allow access to a specific experience only available to those who attended each home game. “
“In such use cases, NFTs are no longer a stand-alone collector’s item, but part of a larger experience between an organization and its fans. The long-term opportunities for NFTs to involve fans and customers in this way are very exciting. “
In addition, NFTs could be used on a very simple level to make event ticketing more secure. Stefan von Imhof, co-founder of the Alternative Assets Club, told Finance Magnates: “Counterfeit tickets are a big problem, and since the possession of NFT can be verified in a blockchain, the authenticity of an NFT ticket is always guaranteed.”
“Current online ticket marketplaces also charge high fees to facilitate trading that could be eliminated entirely with a decentralized NFT ticket market. People could buy directly from one another while still knowing they were getting a real ticket. This use case is currently being explored by companies like NFT Kred, but so far it has mostly been used in NFT conferences. “
Crowdfunding with NFTs
Edgar Fernandez, co-founder of EOS Costa Rica, told Finance Magnates that his platform was working to create non-fungible tokens that can be used for crowdfunding. “We are currently developing a platform called gGoods that nonprofits can use to create NFTs to fund their causes,” he said. On this platform, the user can use these NFTs as collectibles for playing games or in other apps.
CoinTelegraph reported on the use of NFTs in crowdfunding in late 2020 when a game development studio called “Dacoco” raised $ 250,000 by selling a pack of NFT cards for its game “Alien Worlds”.
At the time, Cointelegraph wrote, “Traditional video game crowdfunding efforts have allowed early believers to pawn their money in exchange for rewards such as in-game characters named after them or invitations to launch parties. NFT-powered gaming may turn the same concept into a real investment. “
NFTs are redefining the concept of “value”
While there are questions about the long-term viability of any of these NFT use cases, Eaton-Cardone Finance Magnates stated that as technology evolves it will answer important questions about the importance of value.
She asked: “How do we define value and scarcity in a digital world? It is an extremely complex question and the market is still trying to resolve it. There is no unanimity. There will be considerable volatility and the evaluation of the digital properties will vary widely. “
“However, if you believe in the theory of supply and demand, you have to take NFTs seriously. Sure, it’s easy to make fun of NFTs for being frivolous, silly, or even a short-term fad, but ask yourself: Are electronic collectibles less frivolous than collecting comics, paintings, or baseball cards, for example? Why should an old cardboard picture by Honus Wagner be worth millions? The answer, of course, is supply and demand. “
Let us know what you think about the future of NFT technology in the comments below.