NFT use cases
Let’s find out in what industries NFTs can be used and its pros.
Who might be interested in NFTs?
Authors and Owners of Unique Objects of Art
- Artists, designers, musicians and others can sell their works to collectors who can buy and resell on multiple them on different platforms.
- The great advantage of selling art objects as NFTs is that authors get a commission on each following resale!
Computer game creators
- Inside the computer game basically all characters and even objects can be transformed in the form of an NFT, that gives creator an ability to freely sold and exchanged them between users in web3.
- NFT game items can be sold on any NFT marketplace that support the same NFT standards and networks as game’s NFT Marketplace does.
Services and networks
- You can offer an NFT loyalty cards to your customers with special bonuses.
- Just imagine for a moment that the owners of certain brand can use their NFT loyalty card to become members of a privileged club for example.
Realtors and real estate agencies
- Agencies can use the NFT as evidence of real property ownership. Payment for this NFT will guarantee and safely transfer the income to the owner of the property and the real estate agent.
P.S. It also might be used by many groups of people such as investors, inventors, students, teachers, job seekers, ticket offices, product manufacturers, logistics firms, and many others…
Cases from the NFT application area
1. Patents and intellectual property protection
A couple of decades ago an author would go to a regular post office and send himself a letter to his own mailing address with information about his work and as a result get the time-stamped letter for legal purposes to prove the authorship of a work.
Nowadays, the ownership of intellectual property can be proved by timestamps recorded in a transaction inside the blockchain:
- First step: convert the result of your intellectual work into a file and easily upload it to the IPFS repository, where it won’t be modified.
- Second step: you perform a transaction inside the contract of an NFT collection to issue a new token, that contains all information about the original file such as its author and ownership.
- Third step: You can prove that it is you who owns the work by providing the number of the transaction, which contains the timestamp and the rest of the information.
Blockchain transaction is applicable to any digitized work of art: paintings, music, videos, etc. NFT metadata stores any additional data to verify authorship and ownership. The result is a so-called “public ledger” and contains the info about all transactions related to works and patents.
2. An alternative to resumes, diplomas and certificates of education
NFT can record confirmation of course attendance, university degrees, and other important information that will be stored on the blockchain network. NFTs can be released as a result of each course taken, or as a result of your entire education at any institution.
Imagine that a beautiful image of the diploma or certificate is stored in the NFT’s IPFS address and its metadata, and the NFT release (mint) transaction is signed by the educational institution’s private key. We get an NFT verification using the NFT collection smart contract interfaces by matching the collection’s diploma contract address, token (diploma) number, and the holder’s wallet address.
We can imagine that paper certificates will no longer be relevant in our upcoming future. Due to usages of the NFTs as a record of students’ academic achievements. Students will show the tokens as a proof of their education level.
3. NFT in Metaverses
The technology sector and the video game industry start to get involved — three-dimensional virtual worlds in which social and economic interaction goes through avatars. You may have heard them as social networks with a 3D game engine — Meta (Facebook), Second Life, Active Worlds, Sims, etc.
New level of economic model in the Metaverse network allows users to interact with the released NFTs transparently through smart contracts. Avatar profile can be applied as a public repository for your resume, training courses taken, and portfolio of work.
In fact, the concept of a meta-universe is much broader than just a virtual social network with 3D space. It still uses the concepts of neural interfaces, and many other complicated technologies artificial intelligence. But NFT and FT component on the blockchain side can fundamentally transform its economy.
Each meta-universe has its own characteristics. For example, in one meta-virtual universe you can buy land, in another you can grow unusual creatures. However in general terms — it is a virtual space where users create themselves, and choose what to do. Therefore with the help of cryptocurrencies and NFT in the meta-worlds it is possible to monetise their activities of all kind.
4. Events and ticket sales
Сoncert ticket costs $100. Now imagine that the info about your ticket you buy is actually placed in NFT :
- NFT could be customize with the design you like.
- Like the collectible paper tickets someday it will even be worth something, like old Beatles concert ticket stubs.
- Through the smart contracts, income from your NFT automatically pays you back. For example: the artist 40%, the DJ 10%, the lighting crew 2%, the cleaners 1%, and so on and so forth. You don’t need intermediaries to arrange payments, which means you don’t pay extra commissions.
- If you buy a VIP ticket, NFT gives you access to a behind-the-scenes visit to the artist, or perhaps gives you exclusive access to future digital products sale.
- Surprisingly, NFT can give you the right to be not just a visitor to the event, but even a shareholder of the concert. If that NFT acts as a concert capital, and the event organizers have smart contracts that collect additional profits, then you can get a small slice of the profits.
The general scheme of buying and selling NFT tickets:
Crowdfunding for product launches (analog of IPO)
For instance, we are launching product and in order to attract investments, we can post a description of this project on a special Web 3.0 crowdfunding platform. There anyone can sponsor it and get a special NFT in return. The owner of the project can get a share of the profits from the project in the future.
In the very begining of the project, these NFTs are purchased by investors at an attractive price. They can resell them in the future to other users at an even better price. In that case, the NFT will be a kind of IPO. And the issue of NFTs can be limited in order to maintain their value.
It is also possible to organize a reverse exchange of NFTs for products that appeared as a result of the project.
Crowdfunding for NFT development (INO)
Crowdfunding can also be raised for the production of valuable and unique NFTs by artists and other creators. Such fundraisers are called Initial NFT Offering (INO) — at the time of investment, the buyer receives a temporary FT (regular token), and upon completion of the production and minting of the NFT, the NFT itself.
6. Carbon credits
Now more and more often countries limit the major enterprises and factories in a huge amounts of greenhouse gases (GHGs) emission into the atmosphere in order to pay special taxes for the emission or buy credits for GHG emissions expressed in tons of CO2, which are called carbon credits.
These credits are provided by various climate projects (of farms and forestry) in partnership with government to control the GHG emissions. Since 2007, there have been stock exchanges where companies buy carbon units (or credits) from various climate projects. Enterprises can also sell their excess credits and buy up the missing amounts.
Now many of blockchain platforms provide the function of selling carbon credits as NFTs which contain all the necessary information about the quota and the certificate number assigned by the auditor’s firm.
7. Supply chain logistics for products
If you digitalise and tokenise your product (turn it into an NFT), then in the metadata about the NFT you can add all the information about its lifecycle: from the place of production and the cost of components to each section of its transportation with all the margins and taxes.
NFT standards on different blockchains provide mandatory methods to implement in a smart token contract, but do not restrict you to add your own methods, which can perform such metadata update recordings in NFT. Moreover, the EIP-5185 standard for Ethereum has already appeared, specifying methods for updating NFTs.
Thanks to this, all changes in any tokenized product or its component part can be transparently tracked both through the blockchain explorer and through specialized web interfaces of logistic NFT projects. In other words, consumers will have a single source of truth about the product.
Instead of a conclusion
The popularity of the NFT industry is growing, which means we’ll see more and more different non-fungible tokens use cases and the list probably will be more extensive in a few years so maybe it is right time to become the part of the history by creating your own NFT product with professional team.
P.S. Write in the comments what else you would like to find out about NFT and blockchain.