Web 3.0 | Use Cases for NFT
The cryptocurrency ecosystem has matured in several ways in the last few years. One of the most recent additions in the blockchain space has been Non-Fungible Tokens (NFT), which are unique assets, either digital or physical, available for purchase in the cryptosphere.
Use cases of Non-Fungible Tokens (NFTs)
If something is fungible, it means that anybody can replace it with something similar. Non-fungible tokens were created to preserve the uniqueness of assets and ensure that ownership cannot be interchanged under any circumstance. In the crypto market, it means NFTs cannot be replaced with identical tokens. In this way, NFTs are essential to the next phase in the digital blockchain transformation.
This article reviews the top use-cases for NFTs, and how they can disrupt the traditional sectors.
The art industry has suffered counterfeits in the past through forgery. NFTs can prevent forgery by offering uniqueness and scarcity of products in the market. According to major auction houses, NFTs have already reshaped the landscape of digital art.NFTs offer proof of ownership for assets, and this factor has made investors and developers monetize crypto art faster than other sectors.
NFTs and Collectables
As the cryptocurrency industry grows, there is an increased need for unique digital assets to trade, such as collectibles. In 2018, Crypto Kitties became worldwide collectors for individual purchases, and soon after that, the demand for NFT collectibles picked up. NBA Hot Shot came in a bit later and started using digital video moments instead of the regular trading cards.
Crypto collectibles and crypto artwork go hand-in-hand in this sector and the NFT marketplace has supported this cross-over. The trade works so that the rare digital asset is available for exchange or the owner can store it, and its value and ownership cannot be interfered with. Moreover, younger generations now have a chance to make good returns on their start-up creativity as NFTs offer a global platform.
Decentralized Finance (DeFi) NFTs offer unique codes for transaction and trade purposes. Within the DeFi ecosystem, many projects leverage NFTs as a part of their staking mechanism. For instance, NFTs are rewards that are offered to access a stage of the staking pool. They are also used to provide a variable amount of staking power to users. These NFTs collected via staking can also be sold on to secondary markets.
NFTs in Gaming
NFTs have a natural home in the gaming community; more than 2.7 billion gamers across the globe work to win tournaments and take valuable home assets. NFTs have managed to create scarcity and a need for particular items of value for gamers.
Additionally, the blockchain ecosystem now encompasses gaming applications. These decentralized applications built on the Ethereum blockchain enable an ecosystem of different assets, coins, and more. In the gaming industry, NFTs work for tokens, collectibles, and aspects of art.
Authenticity is difficult in the music industry where ideas are copied, duplicated, and stolen all the time. NFTs preserve the ownership of Assets, whether they are physical, digital, audio or videos. Like any art or collectible NFTs, they can be applied to music to preserve their ownership and allow royalties.
DJs such as `3LAU’ and DJ Steve Aoki have reportedly made millions from selling their NFTs as copyrights for their productions. In addition, many musicians can now earn substantial money from saving their copyrights as NFTs and eradicating middlemen such as managers attached to their brands.
Streaming music through organizations such as Amazon Music, YouTube, and Spotify does not always allow musicians to receive their due royalties. Binance, Smart Chain, and Rocki offer artists an opportunity to stream their music and earn their royalties rightfully.
Real-World assets and NFTs
Traditional finance and physical ownership of properties and documents can be vulnerable to fraudulent claims and scams.NFTs provide a way to tokenize all physical assets such as shares, property, death and birth certificates, documents of qualifications, and licenses.
This tokenization means that assets that cannot be liquefied, such as property, can be moved to the blockchain industry through NFTs. In the case of auctions in the digital marketplace, anyone who wins the auction is presented with physical assets and digital documentation.
Other items in the real world that can be purchased through NFTs include jewelry and heirlooms. Due to the global crypto market, trade has moved online, which means you could own a property in another country through digital purchase as long as it has been tokenized in blockchain technology.
Blockchain technology has enabled transparent transactions that traders cannot reverse. NFTs can be used to track data on a specific item, e.g. its origin, location history, and how long it has been circulating in the market.
NFTs can be used to track shipments of goods across the globe from the manufacturer to its final destination. In addition, timestamps are available on the blockchain, which makes it easier to follow products; in case of loss, these items can be easily tracked.
The global fashion industry includes the proliferation of valuables such as high-end jewelry, bags, shoes, and other unique items. Although theft cases have long been reported on such matters, NFTs have made theft significantly more difficult, with designers being able to authenticate ownership of such high-end fashion quickly.
NFTs are still just getting started in the market, and they are already on their way to changing the face of several industries. As the future unfolds, there will likely be a high demand for NFTs. As of now, the value of NFTs is estimated to stand at more than $78 trillion, including of rare stamps, fine wine, and real estate. The physical world is working hand in hand with the digital market to ensure NFTs are properly tokenized. It is feasible to imagine a future in which the theft of ideas and assets will be significantly reduced because of NFTs.