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No matter how you feel about them, by now, you have certainly heard something about NFTs. Also known as non-fungible tokens, NFTs enable digital ownership to individuals online unlike ever before. Forget what you think you know about NFTs and focus on that concept, and imagine what we could do with a piece of tech that allows us to designate something online as original and irreplaceable.
NFTs use something called a smart contract, which is the same thing that Spritz uses to interact with a blockchain network. An NFT’s value comes from its smart contract, which is a unique set of rules defined within its code that spells out ownership or parameters that are set in the blockchain it lives on. To put it simply, an NFT is a piece of code that strictly defines the function of a product—whether that be a document that says its owner is the owner of a piece of real estate, or a ticket that enables access to a concert or music festival.
An NFT can be an investment, if that’s what you consider valuable, but it can also be a collectors item, a digital product in a video game, or the legal details associated with a loan you take out. Here are some examples of the many use cases that NFTs offer, and how they’ll be used in the future:
NFTs are going to upend how we approach memberships and subscriptions. An NFT subscription enables individuals to own their subscriptions and the data associated with them, rather than sell their data to the companies they subscribe to. If Netflix were to offer NFT subscriptions, for example, a user would purchase an NFT and access the service through their wallet without even having to share their name with Netflix.
Think of it like flashing your airline loyalty card to get certain perks that are associated with the loyalty program. Simply by having that card in your wallet, you can get access to goods and services in the real-world. NFT memberships enable that structure online, and make it easy to access different services without having to hand over your data, or even remember your password.
If you want to cancel your membership, all you have to do is sell your NFT back to Netflix, or to someone else on a marketplace, and your membership is transferred to the next owner.
NFTs can be used as a way to buy, sell, and trade virtual merchandise and goods within video games and on the metaverse. Games like Axie Infinity use NFTs as a way to get onto the game in the first place, where the NFT owner represents the owner of their avatar within the game.
Virtual merchandise and gaming goods can be made more valuable in the game, and in the real world, with NFTs. Something like a rare weapon in a video game can be stored as an NFT, where the holder of the weapon can sell it in a marketplace for crypto and earn IRL money off of the sale.
Because NFTs designate ownership, they can be used to authenticate luxury goods instantly. Imagine that you’re looking to buy a luxury bag on the resale market, but you have no way to really check if the bag you’re buying is authentic. Many websites say they have experts that authenticate luxury goods, but it’s not guaranteed.
Lots of luxury brands are tying NFTs to the products that they sell. When an owner goes to resell the item, a potential buyer just has to check the blockchain history of the bag’s NFT in order to authenticate it.
The transaction history of an NFT can also be used to increase supply chain transparency, and many luxury brands are already embracing the tech as an opportunity to market ethical supply-chain history. In the Diamond trade, for example, NFTs are enabling consumers to easily check that the diamonds they purchase were mined ethically and sourced sustainably.
Another use case to study in terms of NFTs is real estate. This is one of the latest industries diving into the NFT market. One main way NFTs transform real estate is by allowing real estate investors to use blockchain technology to buy and sell property tokens.
Since these tokens are considered more secure than many other real estate investment methods, using NFTs in real estate can help make sellers and investors feel more comfortable and secure when making deals. They can also be used with virtual real estate, such as the digital “Mars House.”
The only caveat here is that laws have not caught up to technology, so in order for NFTs to truly make the housing market operate more efficiently, it could require an overhaul of its legal structure.
You probably heard about the recent problems with Ticketmaster during the pre-sale for the upcoming Taylor Swift tour, right? Fans were upset to find that tickets to the tour had been purchased by bots and scalpers, only to find them on the resale market for tens of thousands of dollars before the main sale for the tour even started.
Lots of fans also reported that fake tickets were on sale before the pre-sale even started, and some even purchased these fake tickets at inflated prices. These issues are not uncommon to the ticketing industry, but highlight a major demand for an overhaul of how we approach digital ticketing in the first place.
Ticketing NFTs eliminate a lot of existing issues in the ticketing industry. For example, NFT creators can set the royalty stipulations into the NFTs smart contract, defining clearly how much the ticket could be sold for on the resale market. In the case of in-demand concert and sporting event tickets, artists and teams can say that tickets cannot be resold above face value at all.
Since it’s so easy to authenticate an NFT by looking at its transaction history on the blockchain, it would be impossible for fake tickets to pass off as real if they’re issued as NFTs. Ticketing is one of the most promising applications for NFTs, and is already being adopted by many events as they seek to onboard users into Web3.
Although many people think of artwork when they think of NFTs, they can also be used as a way to buy, sell and trade various types of music. Projects like Audius are working to make music NFTs more accessible to fans and artists, and are enabling artists to earn more from their work than ever before.
Fans can interact with Web3 streaming platforms through NFT memberships, or purchase music NFTs to directly support their favorite artists without that artist having to pay-out to a middleman in order to connect with their fans in the first place.
NFTs have already redefined how we approach IP ownership and digital goods. The popular project Bored Ape Yacht Club demonstrates the unique ways in which NFTs redefine IP ownership by granting IP rights to each person who holds an NFT in the collection. Some users have gone on to create brands with the cartoons on their NFTs, such as the branding inspiration behind the Bored & Hungry restaurant in California.
NFTs can serve as a value-added service by tokenizing your investment, making DeFi safer, more secure, and possibly even more lucrative. Moreover, companies such as Arcade, Genesis, NFTfi, PawnFi, and TrustNFT are allowing NFT holders to request and access certain types of loans. Some services allow you to offer up other NFTs in your collection as collateral, granting new opportunities to earn on NFTs that were previously unavailable because, well, NFTs didn’t exist.
Here’s a hot take: your healthcare records can be stored as an NFT, and that might make your health data more secure. This is because they can allow patients to take ownership of their records and prevent others from accessing them without permission.
When you interact with a dApp or smart contract with your wallet, the details of what you share is secured using something called asymmetric cryptography. Explaining that is a concept for another blog post, but it basically means that no one can access the information you share unless they have the private keys of the wallet or contract that you shared it with.
This is a well-needed service in an age in which cybersecurity breaches are becoming increasingly common. For instance, The Republic of San Marino used them to verify vaccination passports.
Lastly, NFTs can be used to secure data ownership. They can allow us to get paid for our data and they let us control who has access to our data in the first place. Also, they serve as a great way to overcome issues with incentivizing the trading of private data and overcoming regulatory barriers. For instance, companies like WISeKeys are using NFTs to boost data security.
Regardless of what you think you know about NFTs, the tech is here to stay. We’re big believers in Web3 (obviously, since we’re a Web3 application), and we see a future for NFTs beyond how they’re being used today.
