While the majority of digital art NFTs (non-fungible tokens) available today might seem like extortionate digital artworks, there is no doubt that NFTs are here to stay. Collectible NFTs, simple profile pictures, and other forms of digital art are just the tip of the iceberg.
If you have no idea what an NFT is, don’t worry, we got your back.
So, what is an NFT?
The term NFT stands for Non-Fungible Token.
In simple terms, NFTs are digital files that are stored on the blockchain. They cannot be copied, substituted, or divided. The most fundamental NFT use case is that it can prove ownership.
If you own NFT art, the underlying blockchain technology proves and verifies that it belongs to you. This means you can sell it just like you can a digital token.
If you asked somebody a year ago about non-fungible tokens, they would have either not known what you were talking about or told you they were worthless junk. Even today, many skeptics remain, but interest is steadily growing and there’s a clear trend toward utility. NFT use cases are emerging and this is where they become game changers.
What are some of the use cases for NFTs?
1. Gaming industry
NFTs and the gaming industry are a match made in heaven. NFTs can be integrated into the gaming world by allowing NFT cross-platform playability. NFTs allow game developers to expand their brand and create a new revenue stream, while gamers are more likely to continue playing a game if they already own characters or items in it.
NFTs also make it easier to trade in games, which can increase the value because NFT items in games can vary in rarity. Owners of NFTs won’t have to worry about scams because there is no middleman; transactions are completed instantly via the blockchain. This opens up previously unimagined possibilities, such as purchasing weapons or other equipment.
This is the use case that is already being used fully by our partners in games like Castle Crush, Galaxy Fight Club, and many others.
2. Private membership experiences
One of the first NFT use cases was exclusive access to specific communities. NFT collections have been used as entry tickets to exclusive communities, much like Clubhouse was once an invite-only social media platform for the rich and famous. The ownership of the NFT tokens can be verified on the blockchain, so no one else can gain access to the community without the specific NFT.
While the image can be replicated, this interesting use case requires proof of NFT ownership.
Not only could NFTs serve as an entry ticket to exclusive communities, but they can also be used to access premium experiences. For example, Gary Vaynerchuk recently opened the world’s first NFT restaurant…
Membership to the restaurant — known as Flyfish Club — can only be purchased as an NFT. By ownership of one of their officially minted NFTs, you can receive a private dining experience at the restaurant.
This type of membership empowers anybody to join if they have enough interest and money, unlike invite-only platforms or communities in which you have to know somebody who knows somebody to be a part of the crew. The good thing about this is you can also resell your membership NFT, possibly even making a profit if interest in the club has increased. You don’t need to know the buyer. They can be anonymous and still receive the perks of the non-fungible token use cases.
This type of model can be replicated by other experience-based businesses too. Upcoming NFTs may disrupt the monthly membership fee model that currently exists.
3. Ensuring the authenticity of products
NFTs can be used to ensure the authenticity of a product you are purchasing. Because the blockchain can permanently store information about the product, checking for rarity and authenticity on physical products will soon be a thing as well. NFTs can also be used to store manufacturing process information, ensuring that everything is fair trade.
NFT applications are not limited to consumer products. Numerous companies have already used NFTs for industrial design prototyping with success.
Fake food products, such as supplements and medicine, are currently a problem in the world; NFTs can help solve this by tracking and tracing food products. Imagine scanning a QR code from a nutritional supplement you purchased online and seeing its entire journey — from manufacturing to consumption.
In this case, products that erroneously claim they were made and sourced in a specific country will eventually be exposed, since the track record is transparent.
4. Real Estate
NFTs and real estate are made for each other. Using timestamped NFTs, NFTs could be used to transfer land deeds, provide proof of ownership, and even track changes in property value over time.
One of the most NFT-ready industries is real estate. NFTs can be used in real estate to simplify and speed up transactions, enable smart contracts for properties (allowing automatic payments), and even create decentralized home rental services — all while safeguarding sensitive data such as credit card information.
Imagine knowing everything you need to know about the property you’re about to purchase with just a few taps on your phone. Know when the property was built, who owned it first, what changes were made, and everything leading up to your purchase.
5. Supply chain
There are numerous issues with the supply chain industry, particularly in the food sector. People want transparency in an increasingly distrustful world. Right now, it’s impossible to determine where things come from. We must believe that large corporations are trustworthy. We can trust code, not corporations, with non-fungible tokens.
Tracking goods by minting a digital equivalent is one of the most game-changing NFT use cases, solving tons of problems in maintaining the authenticity of supply chain data. VeChain and OriginTrail are two of the most significant projects focusing on this specific NFT solution.
Imagine being able to verify exactly when and where each and every ingredient was sourced simply by checking the supply chain data stored on the NFT. You’d be able to open your fridge, take out your preferred item, scan the package, and have all the information you need. This would also apply to products like wine, which gain value as they age.
This also applies to shoes, clothing, artwork, and virtually any other product that is moved from one location to another before being sold.
What else?
NFT use cases are still in their infancy, but it is clear that not only games will benefit from this, but also regular people who are going about their daily lives.
Stay tuned for Part 2 of this blog series, where we’ll be diving into more real-life use cases! ☝