NFTs are booming business as more and more people begin to see the great potential of the relatively new technology. Most of its current fame is related to its role in the art world, allowing both traditional and digital artists to expand their audience and customers into the digital realm. Everyone can create a piece of art and mint an NFT on one of the many designated marketplaces, and everyone can create a wallet and become the owner of a digital asset. However, NFTs have much more to offer than art exchange. In this blog, we dive into the promising potentials of NFTs, and explain how they can contribute to many other industries and practices.
What are NFTs?
NFTs are secure tokens with a unique blockchain identification that cannot be edited, duplicated, or substituted. This code, which functions similarly to a digital bar code on a supermarket product, can be used to prove ownership and the legitimacy of a digital asset. NFTs enable us to produce and exchange digital assets without requiring the same third-party verification that is necessary when transferring tangible assets such as a property deed or a vehicle title.
Many NFTs, like the well-known Bored Ape Yacht Club art collection, are obtained using the cryptocurrency Ethereum (ETH) .
While one ETH token is the same as any other, making it a fungible coin, the Ethereum blockchain on which it is built has extra information that can be used to validate the authenticity of an NFT connected with it. When purchasing an NFT with ETH, the registration of the non-fungible token on the blockchain ensures that you are the one and only official owner of the asset. This doesn’t provide you with the copyrights over the artwork, so anyone can take a screenshot of it and have it stored on their phone. However, since you have the NFT stored in your crypto wallet, only you can say you are the righteous owner.
Just like an original Van Gogh painting, anyone can buy a replication to hang above their dinner table. However, these replicas are practically worthless, since it’s not the original. Only the owner of the original can sell the painting for its true value. It’s no different with NFTs, and it is often used more like an investment, rather than a tangible piece of art to hang in your house.
A gateway for traditional artists
With NFTs, traditional artists can digitize their physical paintings or sculptures and therefore free the way to make a profit with both their physical work and its digital version. This expansion in market opportunities allows smaller and beginning artists to instantly enter the market, instead of first having to obtain a certain status and convince physical exhibitions to showcase their work. Not only do these exhibition spaces decide what and what not to show to the public, they usually also obtain most of the profit coming from an artwork, leaving the actual artists with only a small percentage of the selling price. This causes many artists, especially smaller ones, to make a living out of their work.
As an NFT vendor, the value of your artwork is, just like physical art, decided by the public. However, the NFT community is already much more broad and widespread than the relatively small group of people that see your work in an exhibition space and fall in love with it. Showcasing your work in an NFT marketplace like Opensea, Rarible, or Foundation, reaches a worldwide community of art enthusiasts, increasing your chances of selling your work to someone who’s fallen in love with your painting.
5 Other great potentials for NFTs
There is more to NFT than meets the eye. And besides art, there are many other industries that can benefit from the advantages of blockchain technology and NFTs. Here's a list of 5 industries that can upgrade their business processes and marketing strategies by making use of NFTs.
1. NFTs in Gaming
Thanks to Metaverse platforms like The Sandbox and Decentraland, the gaming industry is already very much involved with NFTs. Gamers can buy NFTs to gain access to a certain game, and buy in-game assets such as items character customization, like different hairstyles and clothes, or weapons and other accessories. Next to that, NFTs can also be used to earn actual money by completing in-game achievements. This way, users cannot just endlessly customize and optimize their unique character, they are also stimulated to interact with the game to earn rewards in real-life.
2. NFTs in Fashion
One of the most significant features of NFTs is their potential to connect to a tangible product of any sort. The token becomes the digital embodiment of the object, such as premium items, unique footwear, or luxury watches. Consumers have both proof of purchase and proof of authenticity of their product when they purchase a brand’s NFT. Next to its representation of ownership, the NFT token can also be used as a key to get access to unique features and events. Last year, Paris Fashion Week created so-called “utility NFTs” that provided visitors with access to unique presentations and events. The fashion industry can also tap into the already existing popularity of NFTs in the gaming world, offering digital versions of their fashion for virtual character customization.
3. NFTs in Real Estate
A disadvantage of real estate investing is the hassle of transferring property ownership. Buying a home today requires a massive quantity of paperwork, and therefore a lot of time and effort. NFTs can greatly streamline this transaction process by minting an NFT containing all the descriptive and legal information about the property. This way, the NFT provides the future owner with all of the required paperwork, disclosures, and reports, granting it the legal power to act as proof of ownership.
After the seller has minted the NFT, they can sell it to potential buyers through an NFT marketplace. Buyers can bid on the property, and the auction winner will pay for it in fiat money or cryptocurrency. The buyer will have to sign some official papers to formalize the transfer once the money has been given to the seller and the NFT has been transferred to the buyer's wallet. The NFT, in this case, represents the house, including all the necessary documents like building permits and such. If someone buys the NFT, he or she can instantly become the owner of the property. Besides selling and buying property, NFTs can also be used to obtain mortgages and sign smart contracts, greatly reducing the time and effort spent on paperwork and communication between the different parties involved.
4. NFTs in Healthcare
The medical world is continuously advancing thanks to scientific research and improvements in medical devices. All these researches result in massive databases of useful information for all kinds of sectors and businesses. Turning these data packages into NFTs can simplify the way this data is shared. Dutch company Aimedis has launched the first NFT platform, called DataXChange, offering the exchange of medical data packages between research institutes, manufacturers, and pharmaceutical companies. These businesses can obtain these packages by using either fiat or cryptocurrency. This way, data on medical research can easily and, most of all, securely be traded, making information accessible and stimulating further advancements in the long term.
5. NFTs in sports
NFTs can provide a great way to close the gap between sports and audiences by stimulating engagement, loyalty & reward programs, and even some influence on the gameplay. Chiliz is an innovative blockchain fintech provider, specifically focused on sports and entertainment. They created a platform Socios.com, where you can obtain so-called “fan tokens”. These tokens work just like a membership for your favorite team but are a one-time buy for a lifelong membership, rather than a recurring payment. On the Socios application, your team of choice can post official polls regarding certain decisions. As an official fan, you can leave your vote and contribute to the winning decision. By simply interacting with the applications, users can collect rewards such as access to events, meet & greets, club merchandise, or even VIP meetings with their favorite players.
There’s more where that came from
Above are just 5 examples of where and how NFTs can play a part in various industries. After all, if NFTs proved to be a success in the visual art world, it’s only a matter of time before other types of creators will tap into this technology as well. Think of music artists, athletes, influencers, agencies, and so forth. Do we know for sure if NFTs are here to stay? Nope, but we do know its potentials are there and will reveal its value over the years to come.
Are you keen on knowing more about NFTs? Or are you an artist interested in exploring digital spheres and concurring the market with your own NFT collection? Get in touch with us, and we gladly help you on your way.