NFTs have shown us that there is more to digital infrastructure than what we see. Their introduction has been revolutionary, generating billions of dollars in transactions within a short period. Although the hype may seem to be fading from how it was two years ago, there is no shortage of new use cases and applications for these digital tokens which many still find confusing.
In this article, I’ll briefly go over what NFTs are as well as four real-world use cases for the digital token.
What are NFTs?
Non-fungible tokens, NFTs, are unique digital identifiers that typically reference certain digital files such as videos, photos, art and audio. They are recorded in a blockchain but differ from cryptocurrencies because they cannot be subdivided into smaller units.
Because of the immutability of the blockchain in which NFTs are recorded, ownership and authenticity of NFTs can be certified. Also, their uniqueness enables the owner to transfer ownership, sell or trade with it.
The music industry is gradually waking up to the possibilities of NFTs. Artists could leverage NFTs to tokenize their songs and albums and deliver these to their fans without having to go through traditional middlemen in the industry such as publishers, streaming platforms and record labels.
Unlike the traditional streaming platforms where fans are not incentivized, artists can also leverage NFTs to ensure more fan engagement with their music by providing rewards that are activated through the purchase of the NFT.
2. Real Estate
Real estate assets such as houses and lands can be tokenized as NFT which will store all the necessary information about the asset to serve as proof of ownership.
When a person buys this tokenized asset, the NFT representing the ownership of that asset is transferred to the wallet of the buyer. Since this transaction is recorded on a public ledger blockchain that is permanent, this eliminates disputes and ensures transparency.
Perhaps one of the most talked about use-case of NFTs, gaming is one area that is driving the expansion of these non-fungible tokens. Gamers on play-to-earn gaming platforms supported by blockchain can create unique in-game items and collectibles such as weapons, avatars and cosmetic skins that can provide special benefits to enhance gameplay or improve gaming performance.
Players can swap these items with other players, and buy or sell them for real money. This not only enables a better gaming experience but also ensures the incentivization of players.
4. Ticket Sales
Tickets for sold-out events are often resold at higher prices, thus robbing organizers of additional ticketing revenue. Also, there have been reports of fraudulent ticket sales and scamming of ticket buyers. These could be prevented through the use of NFTs.
Non-transferrable NFTs can ensure that tickets are not resold for higher profits, thus eliminating third-party ticket sales.
For resellable tickets, the nature of blockchains and their historic record-keeping will ensure that transferable NFTs are recorded and easily tracked. This makes it possible to certify the authenticity of the tickets being resold. Also, a system can be put in place through the NFTs to ensure that a responsible party is paid a percentage from the subsequent sales of tickets.
What do you think about NFTs? Share your thoughts in the comment section.