In our earlier blog, we understood the concept of NFTs and their working. In essence, NFTs are basically tokens that represent ownership of any unique asset such as digital art or collectibles. However, with the hype around NFTs in mainstream media, it’s hard to grasp the real world use-cases of NFTs.
Further Read: What are NFTs?
Therefore, in the blog post, we’ll discuss the real-world use-cases of NFTs and how it will shape not just digital art and collectible landscape, but the whole course of asset tokenization. So, let’s have a look at the top five use-cases of NFTs.
1. Digital Art
Digital art can be said to be one of the first and well-known use-cases of NFTs. Various artists across the world have already listed and sold art NFTs worth millions of dollars on NFT marketplaces.
Throughout the course of our history, humans have already preserved rare pieces of art as an indication of our history, heritage, and culture. Through the prism of art, we look at our history and understand the growth of human civilization throughout the course of time.
However, when it comes to proving the ownership and authenticity of an art, we need to rely on a third-party. The process can be tricky, time-taking, and might need a tedious process. Well, NFTs solve this.
With an NFT form of art, it can be individually verified and the ownership can be proved in an instant. We’re already witnessing the exponential growth of NFTs in the digital art space and it will only grow for the coming decades.
2. Domains Names
Domain names are yet another major use-case of NFTs and no doubt the most fascinating addition to the blockchain party. So far, domain names have to be registered in the Domain Name System (DNS) administered by the Internet Corporation for Assigned Names and Numbers (ICANN).
With the DNS working behind the curtains, the web-browser is able to redirect a web address such as hypertrader.app to the respective IP address. However, the system behind domain names is centralized and controlled by a single entity called ICANN.
Here comes the blockchain domain names in the form of NFT. With the underlying blockchain technology, it is now possible to evade censorship and reliability of a centralized entity. Now, the part URL and part collectible form of domain names is opening the door for individuals and companies alike to evade censorship and truly own domain names stored in a public directory.
3. Gaming Industry
After digital art, one of the biggest markets and use-cases for NFTs is the gaming industry. The gaming industry is witnessing exponential growth in the past few years with its in-game purchases amounting to multi-billion dollars. These in-app purchases include utility items, art, and collectibles.
With the amalgamation of gaming collectibles and NFTs, a new exciting and innovative world comes to play the part. With the tokenization of gaming collectibles and utility items, the technology has created a new market for gamers to showcase, exchange and sell their collectibles outside of the gaming world.
Hopefully, in the coming years, NFTs will become an integral part of the gaming world and a bridge to the physical world.
4. Music Industry
When we talk about the ethos of decentralization and the ideology behind blockchain technology, the core idea is to remove middlemen and value-leaching intermediaries. Bitcoin removes the banks as middlemen, Filecoin removes the data-ownership companies, digital art NFT removes art galleries, etc.
It’s a well-known fact that the music industry is infested with biased sharing of royalties among creators and music labels. Artists for a long time, have been asking for a fair share of royalties but struggling against giant corporations of label companies.
Well, here comes the concept of music NFTs. Similar to digital art NFTs attaching an image file ( jpg, gif) to a token, music NFTs will attach audio files to tokens. Several independent artists have already started embracing this innovative solution and have released their music NFTs.
In the coming years, it would be interesting to see the rebalancing of power from music labels to artists.
5. Real-World Assets
Tokenization of real-world assets can be said to be one of the most ambitious ideas coming out of blockchain technology. Theoretically, digitizing real-world assets in the form of tokens to prove ownership can be a tricky idea. However, attaching a NFT to a real-world product for proving authenticity in case of reselling can be a great idea.
Few companies have already started experimenting with NFTs by attaching a tokenized certificate to luxury items such as watches, diamonds, etc. Thus offering a way to prove authenticity and ownership of the item.
Even though we’re still at a very early stage to comprehend and predict the path of NFTs in our day-to-day life. The growth of NFT sector and its use-cases will not doubt only rise.