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Non-fungible tokens (NFTs) are unique blockchain tokens that are not interchangeable. Each NFT is distinct and cannot be replaced by another identical token. NFTs are often used to verify the uniqueness of an item and can include associated metadata, such as an image, video, or document. NFTs can be used to prove ownership of digital or physical assets, depending on the issuer and the metadata attached to the NFT.
This article will examine various ways that NFTs have been used in brand marketing and provide examples of their use, including their ability to provide proof of ownership in the physical world, the concept of scarcity in the digital realm, and their value for brands. Without further ado, let’s get into the top NFT use cases.
NFT is short for Non-Fungible Token. It represents a unique item like a deed or title, albeit, digitally. You can make copies of them but there is only one original and that makes it valuable. An original Mona Lisa painting can fetch close to $1 billion today which is more than the net worth of few islands!! It may seem illogical but that’s down to free market forces like supply and demand.
NFTs can represent any type of physical or digital ownership. Each NFT has a unique ID and metadata. All relevant information of an item is stored on a distributed public ledger like blockchain for instance. The process of creating an NFT is called minting or tokenization for authenticity. Minting process over time has become very easy that you and I can do so in a few minutes today. Once ‘minted’, NFTs can be traded through cryptocurrency marketplaces or exchanges. Often such marketplaces exist within online metaverses which is a digital version of our real world that includes games, lands, shopping complexes etc.
You do not need an intermediary to curate and monetize your creation. You can simply upload a digital version of your creation and mint it on these marketplaces where people throng. Also the creator can earn lifetime royalty every time their creation changes hands. Such features make NFTs more liquid than, say, a traditional collectible or art.
What makes this more interesting is that a digital version once created can be duplicated. Yes! But as mentioned in the above paragraph, once you mint your creation, it will have a unique ID/address and metadata on the blockchain that is immutable. And information in typical blockchain is open and transparent to anyone. So if someone is looking to duplicate an original content with a fresh minting (which will become technically harder over time), a ‘new’ record will be created on blockchain with a new address and metadata. In a nutshell, it will remain a duplicate on top of litigation troubles.
Various features of NFTs like non-fungibility, tokenization, interoperability, transfer of ownership are made possible by NFT standards. The most common NFT standard is ERC 721. Each ERC 721 token has a 256 string key/ID and metadata which makes it a unique pair that there is almost no possibility to register the same pair again. It is even more complex than a unique private/public key pair created when you buy and own a cryptocurrency.
While some may argue that non-fungible tokens (NFTs) are unnecessary, they offer several benefits to their holders. NFTs establish digital scarcity and unique, verifiable identifiers, which can be valuable in a digital world where assets can easily be copied and reproduced.
In a digital world where assets can easily be copied and reproduced, NFTs can provide a way to distinguish the original from duplicates, much like a certified painting in a room full of prints. NFTs also allow for self-custody, meaning the owner of the NFT has full control over their digital asset without relying on a third party or web server for storage. In the world of cryptocurrency, the phrase “not your keys, not your crypto” emphasizes the importance of retaining control over one’s private keys and storing digital assets in a self-custodied wallet in order to truly own them.
NFTs may also enable interoperability, or the transfer of assets across platforms, in the growing virtual world known as the “metaverse”. By design, NFTs enable a new conception of what it means to “own” digital assets. Overall, NFTs offer a range of potential uses and benefits to their holders.
What are the top NFT use cases?
A handful of problems in today’s society are left unattended by mighty entrepreneurship which are mostly a private venture. So they need to look for themselves before having any altruistic intentions. NFTs are gradually appearing as the preferred mode to gather a community and raise funds for noble causes. NFTs for causes is an alternative to donations because it introduces transparency and humility like never before.
Think about all those stamp collections in your childhood. Many of us make it a point to keep collecting rare items passionately but some turn them into a real time investment. I mean if there is a market for it, why not? Experienced and risk taking investors keep an eye on valuable collectibles so they can flip for profit at the right time. I am not going to exaggerate and tell you there are billions sitting on these marketplaces and showing off their collectibles. But there are quite a bit of them online as you can imagine. Whether or not it is liquid enough is in our hands considering this is a very young industry. Check how Marvel is leveraging the NFT industry.
People with NFTs get exclusive access to various clubs that have limited membership. Not too different from our Rotary and Lion clubs! Some clubs work for a cause while others cater to fashion, movies among other industries. Such clubs often incorporate well articulated financial plans or tokenomics like reserving a certain % of their NFT revenue for a social cause, NFT holders, development work like scaling up the club to a metaverse etc. One of the ideas is to benefit from NFT price appreciation if and when the club takes off creating more demand. NFT holders (or club members) also get access to multiple airdrops, which is usually a free distribution of new tokens.
People are spending most of their time online ever since the start of the pandemic. Yes, shopping for fancy profile pictures is giving a competition to shopping for fancy apparel wear!! And do you see some of the animated images below that has hats or eyewear? As you can imagine, there are creators focusing on creating an animated image(s). But they are also creators who focus on creating in-game merch that could be traded with the former.
Some NFT holders have a sizable following on social media based on their NFT profile pictures to start with. No one knows who they are in reality and well, not many care anyhow. This is not different from a book author writing under a pseudonymous identity for reasons ranging from privacy to societal bias. As long as you have created a loyal following and a deep relationship with your audience, your success more often starts there regardless of whether you are anonymous or a well known celebrity. Having a pseudonymous identity can be actually productive when you can really focus on the work at hand instead of your appearance or ethnicity in a rude digital world, to put it mildly!
Brands are always looking out to build deep-rooted relationships with a savvy NFT customer base. Investing in NFT projects is also (i) An apparent hedge against the movement in consumption from physical to digital world, especially for fashion and luxury brands (ii) Free and direct customer acquisition without paying media iii) The community can then take over to help expand the growth.
One of the potential top NFT use cases is in supporting and rewarding deserving content creators.
For example, a content creator who produces high-quality and engaging videos on a specific topic could create NFTs that represent exclusive access to their content or special experiences. These NFTs could be sold to their fans as a way for the creator to monetize their work and for fans to show their support and appreciation. The NFTs could include metadata such as links to exclusive video content or access to a private online community or live event.
In this way, NFTs could be used to provide content creators with a new revenue stream and a way to directly connect with and reward their most dedicated fans. It could also incentivize creators to produce higher quality content, as they would have the opportunity to monetize their work through the sale of NFTs. Additionally, NFTs could provide a way for content creators to differentiate themselves from other creators and offer unique experiences to their fans.
We are now moving to something similar to equity investments. You can now claim fractional ownership in real estate, equipment, movie-making, albums, farms, forests, games and even community owned companies like DAO.
For example, consider a rare and valuable piece of art or a collectible item such as a sports car. These items may be too expensive for a single individual to purchase outright, but a group of individuals may be interested in jointly owning the item. NFTs could be used to represent fractional ownership of the physical asset and allow multiple individuals to share in its ownership. Each individual would hold a unique NFT representing their ownership share, and the NFT could include metadata such as a description of the asset and the ownership percentage represented by the NFT.
Similarly, among top NFT use cases could be used to facilitate fractional ownership of digital assets such as exclusive access to a virtual event or a virtual real estate property. In this way, NFTs could provide a way for individuals to invest in and own a share of valuable assets that they may not be able to afford on their own.
Take a look at some of the projects here:
POAPs are akin to participation certificates or badges. POAPs are now looked at as a good tool to govern distribution of airdrops in the future. Some can serve as a resume material to prove one’s skill or commitment to a cause.
For example, consider a music festival or a conference that sells tickets to attend the event. NFTs could be used to represent each ticket and provide a way for attendees to prove that they were actually present at the event. The NFTs could include metadata such as the date and location of the event, the name of the attendee, and a unique identifier for the ticket.
Using NFTs as a proof of attendance protocol could have several benefits. It could provide a way for event organizers to verify that attendees were present at the event and prevent ticket fraud. It could also provide a way for attendees to prove that they attended the event, which could be useful for professional development or personal bragging rights. Additionally, top NFT use cases 2022 could provide a way for event organizers to offer unique experiences or perks to attendees, such as exclusive access to meet-and-greets or VIP areas, by creating NFTs that represent these experiences.
Some of the benefits of digital assets and innovations are well documented like fractional ownership and in-game utilities. Hence we are listing them in the bottom fold. That said, play-to-earn games (P2E) like Axie infinity have been a huge success so far. The NFT marketplace feature several competitions to play and progress in a game or cash out the NFTs in multiple fiat currencies including USD. Each marketplace trade, though, entails a 5% fee that goes to the community treasury.
Elegant Elephant Society is an early stage P2E being built on Minecraft through partnership with NFT Worlds.
In conclusion, non-fungible tokens (NFTs) have a wide range of potential use cases that can benefit both individuals and businesses. Some of the top NFT use cases 2022 include supporting and rewarding deserving content creators, facilitating fractional ownership of physical and digital assets, and providing a proof of attendance protocol for events. NFTs offer a way to establish digital scarcity, verify uniqueness and ownership, and provide a new revenue stream for individuals and businesses. As the use of NFTs continues to grow and evolve, it is likely that new and innovative use cases will emerge, further demonstrating the potential of this technology.
Individuals can use non-fungible tokens (NFTs) to monetize their content or artwork, facilitate fractional ownership of valuable assets, provide proof of attendance at events, and create unique experiences or perks for customers or fans. NFTs offer a range of potential uses that can benefit individuals and businesses.
Non-fungible tokens (NFTs) have the potential to disrupt a variety of industries, including art and collectibles, gaming, virtual real estate, and music and entertainment. NFTs offer a way to authenticate and monetize unique digital and physical assets, which could have significant implications for these and other industries.
Some popular non-fungible token (NFT) based applications include marketplaces for buying and selling NFTs, games that use NFTs to represent unique in-game items, virtual reality experiences that use NFTs to represent ownership of virtual assets, and social media platforms that use NFTs to represent exclusive content or access to features.
References:
1. https://ethereum.org/en/developers/docs/standards/tokens/erc-721/
2. https://github.com/ethereum/EIPs/blob/master/EIPS/eip-721.md
3. https://docs.opensea.io/docs/metadata-standards
4. https://docs.ipfs.io/concepts/immutability/
5. https://support.opensea.io/hc/en-us/articles/1500012270982-What-is-Freezing-Metadata-
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Disclaimers : This opinion piece was originally published by the author on medium.com which is edited and re-published here. Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum foundation.
About the Author(s) :
Shuwam Rana is a Technical Analyst, Digital marketer and SEO expert with a passion to help businesses grow. He also has an engineering background. You can follow him on Twitter
Harsha Karanth has been in the energy and e-commerce industries before he came across web 3.0. He is enthusiastic about building impact projects on web 3, particularly in the sectors of environment, animal care and education. You can follow him on Twitter
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