We realize the fact that no matter how hard we try, some people still cannot wrap their heads around the fact that someone is paying millions of dollars for a monkey. And to be honest, we don’t blame you. Art is an extremely subjective topic. Hence the phrase, “Beauty lies in the eyes of the beholder.” But at the same time, we have been vouching for the uses of NFT outside digital art.
We agree that initial use cases are amorphous and frugal at best. But the advent of NFTs is all set to change the way we interact with the world. For all we know, Blockchain technology can power the next industrial revolution. It seems like a tall claim for a technology that is currently being put to use to buy pixelated characters. But trust us, by the end of this post, you would have a very fair idea of how powerful NFTs are.
What Makes NFTs Powerful?: A Recap
At Nas Academy, we have have been talking about NFTs for a while now. But for the uninitiated, here are a few inherent properties of NFTs that make them extremely powerful tools for innovation.
A. NFTs are Unique:
Each NFT is represented by an address and an owner of that address on the Blockchain. This makes each NFT completely unique as one address would hold one NFT only.
As we would explore in the upcoming sections, uniqueness gives NFTs a lot of usability. One could use them in identity resolution, ownership etc.
B. NFTs are Non Interchangeable:
The term ‘non-fungible‘ highlights this property of NFTs. Once again, this creates a whole variety of use cases for NFTs to take lead in. For example, concert tickets, music rights etc. Read on as we expand on to these use cases shortly.
C. NFTs are Traceable:
Because NFTs are nothing but immutable records on the Blockchain (Ledger), they hold a very strong proposition to act as a proof of ownership. One can always prove the ownership of an asset along with other details such as date and time of ownership transfer etc. through blockchain.
This could be extremely handy to tackle plagiarism on digital content. One could prove that they came up with a digital piece of content before any one else if it were on the Blockchain.
D. NFTs Can Be Programmed:
NFTs are programmable by the very nature of it. One can simply code a set of pre conditions and NFTs will abide by them at any cost. This could be as simple as fetching royalty whenever a digital piece is sold to a secondary or tertiary buyer OR something as complicated as our imagination.
Uses of NFT Outside Digital Art:
With the above explanation out of the way, we are good to dive deeper into various applications of NFT technology in the real world. A lot of these applications are already deployed in the real life scenarios and people are leveraging them for good. On the other hand, we are only limited by our imagination when it comes to putting NFTs to use. Therefore, use cases below is still a developing story and may include many more uses as we evolve:
A. Proof of Authenticity:
Since Blockchains can permanently store information on the distributed ledger, it is an extremely good way of tagging physical products with it so that it can we can verify the authenticity of these products. Below are a few examples of some industries that can use this:
A.1. Fashion Industry:
Fashion industry is plagued with plagiarism and fake products. It is extremely difficult for someone to validate if they are purchasing an authentic product or not.
This problem can be solved by issuing an NFT that is tagged with the physical product. That way, anyone could go to a blockchain explorer and find out if the product is real or not.
On a similar note, NFTs could also prove the rarity of luxury items. For example, if a fashion brand claims that only 3 pieces of a limited edition shoes are made, one could actually vet if the piece they’re considering is one of them or a counterfeit.
A.2. Watches and Luxury Items:
NFTs can safeguard the interests of a buyer while purchasing a luxury item in the secondary market. For example, watches accrue value as they get older. However, one risk associated with purchasing used watches is of authenticity.
Now a brand could issue an NFT along with the physical watch. As a result, buyer would also demand the transfer of NFT along with the physical watch. This way, he could check and validate if it is a legit purchase or not.
B. Provenance:
Another corollary of ‘Proof of Ownership‘ could be the Provenance. It might be important in some use cases to track the origin of a product. For instance, some people might want to make sure that they are not wearing clothes made out of cotton harvested unethically.
Similarly, they might want to validate if the grapes used in their wine are sourced from Napa Valley.
Alternatively, it may be of importance to check if the diamonds used in their beloved jewelry are not the notorious blood diamonds.
NFTs can be really handy in all such use cases. A QR code storing all their data on the Blockchain could instantly reveal the entire journey of the product from farm to plate.
C. Real Estate:
NFTs and real estate are a match made in heaven. NFTs hold so much potential in real estate industry to boost the speed, save time, effort in the transactions. Let us unfold this potential:
C.1: Escrow:
Currently, you mandatorily need a bank or government organization as an escrow to make sure that you are not defrauded during your transaction. The lack of trust is at its peak between the two transacting parties. To avoid this chicken and egg situation, one can create an NFT and code the terms of the agreement within them. This way, as soon as the payment will reflect in the seller’s account, the rights of the property will be automatically transferred to the buyer.
C.2: Speed:
A few days ago, on 10th February, 2022, a house in Florida was auctioned for 210 ETH ($6,54,309.60). This winner of this auction was awarded an NFT which acted as a proof of ownership to the property. Imagine the bureaucracy and paper trail it managed to cut through.
C.3: Tokenization:
There are some legendary properties in posh areas of metro cities that are just out of the reach of a retail investor. As a result, it reduces liquidity related to that property. But now, with NFTs, one could tokenize such properties and sell fragmented pieces of it to the interested individuals.
This way, smaller investors could make a buck when the real house is actually sold at a higher price. From a seller’s perspective, it gives them access to instant liquidity and also the ability to command higher prices.
D. Sports and Event Tickets:
Ever duped into purchasing fake tickets to a concert? Ever been a victim of exorbitant prices due to hoarders purchasing tickets in bulk?
Well, if you observe closely, even tickets are non fungible. We book a certain seat in a theatre/stadium for a reason. We can’t just swap it with any other ticket. Therefore, it makes sense to use NFTs as tickets. One could check the authenticity of those tickets through immutable records on blockchain. This would also prevent someone from accessing multiple tickets as the ownership is digitally verified instead of physical copies.
E. Gaming and NFTs:
This may not make any sense for an average joe, but for those who love gaming, it is an extremely important use case. There are games like fortnight where you can buy add on weapons, skins for your character right? But the design has some inherent drawbacks:
A. Centralization: Whenever the creators of the game want, they can get rid of your favorite skin/weapon. NFTs can take away that control and give you the real ownership of your assets.
B. Trading: What if you could earn an in game asset with your skill and later trade it with newbies? NFT enables just that. Thus giving rise to a whole new era of play to earn.
Similarly, there are games where your character virtually travels in a digital world. You can now own a piece of land in that world. Just like real world, it may appreciate in value over a period of time.
F. Certifications and Validation:
All key organizations could issue certificates as NFTs. This could lead to multiple benefits like:
- No need to create, seal, ship and store the physical, fragile certificates. It is there on the blockchain at your perusal. Always.
- Anyone who needs to validate your certifications (HR, Auditors, Universities) could simply access the Blockchain and find out your achievements. They need not double check it either because Blockchain technology has your back.
What Else?
As mentioned above, the use cases of NFTs are only limited by your imagination alone. This could take any shape dependent on the context you put it into. Do you want to really cut through the noise and try NOT missing this revolution?
Well, keep on following us to stay up to date! For now, if you have any questions, let us know.
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Until next time..
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