12 NFT Use Cases You Should Know About
With the expansion and augmentation of the DeFi sector, the NFT use cases space is going to experience greater exposure and market expansion. 2021 saw the demand for NFT reach a $2 trillion market cap in the span of a few months.
Today, we mostly associate NFTs with digital artwork and portraits like Beeple’s The First 5000 Days and Larva Labs’s CryptoPunk. However, NFTs expand beyond the cusp of the art world. They are being used to ascertain the legitimacy of real-world assets.
From real estate to finance, the use of NFTs has more comprehensive applications than it did before. Let’s learn about the most common NFT use cases and the future use of these crypto assets.
Top NFT Use Cases
Here is a list of the most common use cases or applications for non-fungible tokens:
One sector that stands to profit the most from NFTs incorporation is the gaming industry. Non-fungible tokens can be employed to create non-duplicable game-related items, giving gamers a new sense of right. In-game purchases are already a billion-dollar industry because the gaming community not only values ownership of their digital game assets but is passionate about it. Hence, there is a broader acceptance of NFT due to its rarity and uniqueness.
Experts believe that NFT adoption in the gaming industry will be highly fruitful, both for gaming companies and players. Numerous blockchain-based games allow players to gain virtual non-fungible in-game items as they progress through different stages. Popular play-to-earn games like Axie Infinity and Battle Pets have tradable items. Players can opt to sell the in-game tokens or items earned for a profit as they have complete control/ ownership of these assets. Find out more about NFT mobile games.
NFT marketplaces are now enticing investors to buy virtual real estate representing a physical property in the real world. Characteristics of these digital tokens have identical to real estate properties, such as size, place, market value, and so on. Given how NFTs work, the ownership of virtual real estate is always safe and secure. Due to the immutability of blockchain technology, malicious parties cannot interfere with land ownership and other tangible assets related to land.
Property transfer in conventional real estate is a labor-intensive process. It necessitates title management and legal compliance, usually involving real estate brokers and lawyers. Connecting an NFT to a physical property simplifies the purchasing process and lowers costs. Moreover, the legal ownership of the property can be traced on the blockchain ledger, thus reducing fraudulent practices.
Startups like Propy, RealT, and SafeWire allow their customers to buy real-world properties as NFTs. The first Propy-hosted NFT auction resulted in the sale of an apartment in Ukraine for 36 ETH ($93k at the time). Additionally, as real estate NFTs become popular, companies like LoanSnap are offering home equity loans for NFTs. These loans operate similar to regular home loans, but homeowners are issued non-fungible tokens instead of mortgage notes with liens.
An artist can create an NFT that represents their work of art and ensure the purchaser that the NFT-based art file is the only one that exists.
The immutability of blockchain ensures that the same asset cannot be duplicated. Thus, it ensures that NFT art is rare and one-of-a-kind. In addition, a code can be programmed into the NFT’s smart contract to allow the original creator to acquire a share or portion of the secondary sale of their digital work.
Minting an artwork is a feasible way to certify ownership. A blockchain can quickly identify if the artwork is duplicate or fraudulent. Therefore, minting protects a creator’s ownership. Since an NFT can only have one proprietary owner at a time, it becomes easy to track and verify who actually created or owns the crypto asset.
A verified digital artwork tends to have a higher value. Sometimes, the ownership of artwork is more important than the actual artwork itself. For example, a physical Picasso or Van Gogh painting will always be priceless because of its famous creators. The same is applicable to NFT artworks as well. Much like physical paintings, popular digital art can appreciate in net worth and become high-yielding investments.
Wearables and Fashion
Luxury and high-street fashion brands like Nike, Gucci, Louis Vuitton, and Dolce & Gabbana have entered the crypto market with their own NFTs collections. Fashion enthusiasts can now buy digital apparel that can be worn with the help of VR (virtual reality). For years now, limited edition items like sneakers and bags have been sold for thousands of dollars. The same trend is spilling over to the digital world, where people own their collections of fashion NFTs.
When interested buyers purchase fashion NFTs, it is usually accompanied by the real version of the clothing items and exclusive access to fashion events. Consumers can easily check the proprietary rights of their purchases and accessories online, removing the risk of counterfeiting.
Purchasers simply scan a QR code on price tags for clothing and accessories to gain access to information such as when and where the item was created, as well as which brand owns it. Customers can also find out who the original owners were who owned the item before they bought it.
The application of blockchain technology in the fashion industry has significantly reduced the industry’s carbon footprint.
People investing in digital wearables rather than physical clothes reduces the amount of energy consumed and trash accumulated in the entire product life cycle. Implementation of blockchain technology can also safeguard garment workers’ rights while protecting consumers from counterfeit products.
Recently, artists like The Weeknd, Shawn Mendes, and Snoop Dogg have dipped their toes into non-fungible tokens as a means to commercialize their music and communicate with fans. Musicians are launching “moments,” similar to the concept of sports moments, that their fans can buy and collect. Music NFT collectibles can be full-fledged albums, concert moments, special events, or snippets of songs.
Musicians can couple their audio segments to non-fungible tokens. Similarly, they can connect pictures or videos to create a music collectible. It’s not always feasible for all music to be adopted by bigger streaming service providers. As a result, this approach is poised to address these concerns, and artists will no longer rely on third-party services.
NFTs have the power to disrupt the music industry. It has the potential to resolve one of the most significant issues in music today- royalties. Big streaming services like Amazon Music or YouTube offer insignificant NFT royalties to artists.
However, blockchain technology, especially NFTs, can empower musicians by giving them more control over their masters and earning fair royalties. Blockchain-based streaming services and blockchain royalty monitoring systems can assist artists to achieve a proportional result.
Identification and Documentation
NFT ledgers can store an individual’s medical records and personal identification without jeopardizing confidentiality or risking tampering from outside sources because all NFT transactions are verified on multiple nodes. This ensures that every record is correct and secure from tampering.
NFTs platforms, such as NFT Birth Certificates, are intended to help medical professionals and healthcare workers grant birth certificates. Giving one of these non-fungible tokens to a child is a straightforward process. These tokens can establish a lifetime identity by connecting and validating their birth certificate on the blockchain.
NFT ledgers also provide a secure way to save sensitive medical details and documentation while facilitating authorized medical practitioners’ access when needed. Recently, NFT use cases have expanded to include the healthcare sector. Medical centers are now using blockchain networks to improve operational capability, the patient verification process, and medical procedure recording while maintaining patient confidentiality.
Ticket scalping and fake goods are two of the most serious problems that affect this sector. NFT based on blockchain is the ideal solution for addressing such issues with few obstacles. This is due to blockchain’s invariability that aids in the deterrence of fake ticket selling.
Non-fungible token applications such as tokenized sports pass published on the blockchain can aid this sector to a great extent. Although each pass/ticket is identical, they’ll include information that is distinct to the authenticated ticket holders.
Sport non-fungible tokens, including trading cards and big sports moments, are also becoming popular, with numerous successful athletes’ launching their very own collectibles on NFT marketplaces. The estimated worth of the NFTs depends on the popularity of the sportsperson themselves. Some popular sports NFTs have sold for millions of dollars.
Supply chain tracking can be a huge cost to companies. For large organizations, it’s very tedious to verify the origins and production methods of the ingredients. NFTs, on the other hand, can be used to give a product a unique identity that cannot be tampered with. This is a great example of NFTs working with logistics.
Blockchain technology has the potential to be useful in the logistics industry due to its immutability and transparency. It can enable supply chain networks to track every process accurately. This feature is helpful for all industries, but it’s especially essential for perishable commodities, pharmaceutical products, and chemicals. Organizations can use metadata to trace the origin, destination, and warehousing information of a product by integrating non-fungible tokens to define individual products.
Besides trackability, the NFT metadata can relay important information such as product size, weight, and certifications. Moreover, the data is always stored securely on the blockchain as a smart contract, ensuring that the entered data cannot be altered, reproduced, or eliminated without proper authorization. Therefore, NFTs can safeguard critical details and information throughout the supply chain.
A great example of an NFT application in logistics is Louis Vuitton. The luxury fashion house announced intentions to develop a blockchain network in 2019 that would employ non-fungible tokens to validate the origin of its high-end products. These tokens would ensure the quality and origin of their products by tracing materials along the supply chain from beginning to end. Moreover, they help identify and track every product throughout its journey, proving to the customers that items are original and not counterfeit.
Non-fungible tokens have transpired as the most promising DeFi applications. They can be used to create and enhance the liquidity of various DeFi platforms. Given that NFTs are value-based assets, they can be leveraged as an additional asset of the DeFi portfolio.
Take the example of ERC-20 tokens established by Ethereum to provide representation for digital assets. As a result, NFTs can serve as proof of ownership for artwork, real estate, and other real-world assets.
NFTs provide remarkable value benefits in the realm of DeFi due to their flexibility in demonstrating ownership. The capacity to unlock value is one of the key features of the NFT DeFi application. At the same time, detailed techniques for determining the value of NFTs are complex. However, in DeFi, the use of NFTs may assist the lender in determining the collateral amount.
Using NFT and DeFi in tandem might make it easier to solve the collateralization problem. Investors can use NFT collectibles and assets as collateral for DeFi lending. NFT-backed loans are steadily gaining traction, and the expansion of NFT DeFi as a whole facilitates more innovation. DeFi and NFTs might change how we think about assets, tokens, and financial services as their usage proliferates.
Future Use Cases of NFT:
As the application of NFT and blockchain technology becomes widespread, we can expect new NFT use cases such as the following:
Non-fungible tokens can also be used to record academic credentials and certifications. The NFTs can be used to keep track of attendance, degrees earned, and other important student information. Since the information on the blockchain cannot be changed or hacked, it is safe and secure from being misused.
NFTs can be coded to generate immutable records for all courses completed by assigning tokens for each course and degree earned using smart contract verification methods. As a result, paper certificates are likely to become obsolete in the future. NFTs will be used as a record of academic performance in the future, and NFT education tokens can be transferred to others to prove that the person holding them has earned a non-fungible token.
NFTs will be used to replace tickets in the near future. Parking permits, for example, can be replaced with NFT tickets with a unique ID, which can then be used to validate a person’s entry into the restricted area. Because NFT owners only need one token rather than several receipts, fraud is eliminated, and paper consumption is reduced. When payment is verified via scanners at various points along the travel journey, the same approach applies to bus tokens or other modes of transportation.
In most countries, eligible voters require an image ID and proof of address to authenticate their identity. The inability to produce ID at polling stations can prevent people from voting. Many voters lose their right to vote because they do not have proper copies of their identification or other documents proving their residency and eligibility to vote.
In such cases, NFTs can help to alleviate the problem by providing digital identification to people who lack physical documentation. The tokens can serve as proof of identity and residence. This will also help prevent voter fraud since non-fungible tokens will serve as an official record of voters. Therefore, NFT applications in the voting system can create more transparency while eliminating malpractices.
With the growing popularity of the NFT markets, there is a good chance that we will see many more concepts and applications in the future. As an evolving domain, numerous NFT concepts are still in the development stages. Not every NFT application and use case will be successful. However, as NFTs become more mainstream, we will likely see their adoption and implementation in more industries.
Whether you wish to learn about NFT, Blockchain, Web3.0, Metaverse, or other emerging technologies, we have the vital resources that will enlighten and help you make an informed decision.
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