Global interest in NFTs increased in 2021 due to the record-breaking $69 million sale of Beeple’s “First 5000 Days” NFT artwork to Vignesh Sundaresan in March of that year. That year, several NFTs from well-known collections like Bored Ape Yacht Club and Cryptopunks sold for close to a million dollars.
The popular perception is that NFTs are expensive collections of digital art; due to the hype, many people frequently associate NFTs with extremely exorbitant costs.
Putting aside the controversy around these tokenized visual treasures, NFTs are beneficial for various cutting-edge yet practical blockchain-based applications.
Brands, institutional investors, and venture capitalists watch with interest from the sidelines as early innovators experiment with various use cases in a sandbox setting. They wait for the right time to collaborate with potential blockchain and skilled contract developers to gain a competitive edge in utilizing this still-developing technology. China is one nation that has conflicting views on this mysterious occurrence.
It is nevertheless essential to look at the current and future uses of NFTs even if the development of applications for real-world usage of NFTs is still in its infancy, and many brands still do not view it as a type of mainstream usefulness.
Art
Digital art collectibles are the first application that comes to mind when thinking about NFTs; this is also the application that most people would consider to be the most obvious. Even significant companies in the Chinese NFT market, such as BSN, Ant Group, and Tencent, are present. In contrast to foreign markets, Chinese NFT markets are not decentralized.
Objects that may be used as profile photographs (PFP) on social media accounts are the most popular NFT art collectibles. This gives young millennials a way to flex their money practically anywhere they go without being in front of an audience.
Consider the era before the internet. Only having the actual item in front of the audience allows one to flaunt their wealth; examples include bringing friends over “for lunch” in a great house, driving an expensive car to work, donning a costly watch, etc.
Even if you have a genuine physical piece of artwork in your house, you should still confirm its authenticity should someone accuse you of having a fake. However, doing so might be difficult.
NFT art has two essential components that get over these issues: artwork can be published on social media sites like Facebook, Instagram, Twitter, and Whatsapp for everyone to see, and physical location is no longer an obstacle. And secondly, the public wallet address of the owner and the contract address of the NFT in that crypto wallet in USA may be used to authenticate the ownership and legitimacy of the NFT on a blockchain explorer.
Real Estate
Real estate transactions can be among the most complex processes for the ordinary person, comprising several bureaucratic stages and various intermediary parties that each take a “humble piece” of the real estate pie, often 6 percent of the sales price.
Typically the involved parties are:
- Mortgage provider.
- Insurance provider.
- Governmental body.
- The title firm.
When all paperwork is in order, the title company serves as the facilitator and escrow to clear the title and distribute the money from the buyer and mortgage lender. It also obtains title insurance, holds the earnest money, and conducts the title search from public records to verify the seller’s authenticity.
To conduct these procedures automatically and without human input, an NFT may be connected to a piece of property with a smart contract, doing away with human mistakes and inefficiency. Additionally, the commission costs owing to such intermediaries might be significantly reduced. Even title insurance won’t be required. Since the genuine title deed is stored on the blockchain, nobody can fabricate one.
In February 2022, the first house was sold as an NFT. The house is in Gulfport, Florida, and it was sold for $650,000 thanks to the help of prop-tech business Propy. The homeownership was linked to an LLC, which was then encased in an NFT sold to a buyer.
Other than managing the handover procedures using a title search smart contract, fractionalizing real estate into tokens is another potential use for NFTs in real estate. There is often a lot of documentation to complete if you want to use your property as collateral for a bank loan. NFTs, on the other hand, allow you to fractionalize your ownership into tokens, which you can then sell off a piece of to make money for your purposes.
Former Google engineer and co-founder of Third Planet Zi Wang proposed that tokenizing real estate and selling it to many investors rather than the usual few, such as banks and private equity, may be used to finance the construction of new real estate.
Supply Chain
Paperwork-intensive supply chain management and trade financing are required to guarantee product provenance and traceability. NFTs and blockchain are emerging technologies that can help with supply chain logistics issues. Blockchain solutions for international trade and food verification are currently available from the Ant Group tech company, AntChain.
NFTs can be employed as a token ID implanted in a product package with tamper-proof technology by using the strength of their immutable ledger on a blockchain. This NFT transforms into indisputable proof of the product’s place of manufacture throughout the shipping process, facilitating accurate handover at each stage of the shipping process because every party in the supply chain has access to duplicate unchangeable records, guaranteeing traceability and transparency. This eliminates the need for a convoluted paper path that adds to downtime and human oversight.
A supporter of product provenance at the upstream end of the global supply chain, NFTs also play this role. Smallholder farmers who are frequently unnoticed by the supply chain are these people. For instance, an NFT that tracks the caliber, source, and cost of the barley used in making a batch of beer might be associated with that batch. The farmers’ payment and this information are both documented on a blockchain. These farmers may borrow money at cheap interest rates thanks to the irrefutable proof of their sales and product quality, which gives them access to new chances. Additionally, it offers vendors and precise customer details regarding the caliber of these raw resources.
Gaming
The economy of video games has always been a one-way street, flowing from player to developer; models like pay-per-pay for retro arcades, pay-to-play for console games, subscription models that were typical for MMORPGs (massively multiplayer online role-playing games) like World of Warcraft, and to the more recent F2P (free-to-play) or freemium model of games like Fornite, where the core of the game is free, but players can purchase additional in-game.
Games like Counterstrike: Global Offensive is an exception to the rule, allowing players to purchase weapon skins from the game creator and exchange them for fiat currency on multiple markets. The weapon skins have a purpose. The game’s other players may view the cosmetics you apply to your weapons.
A fictitious sense of ownership is associated with these things in a player’s Steam inventory, even though it is possible to purchase, trade, and sell these weapon skins for profit (or loss). The items remain under Valve’s control on their centralized server even if they are in the player’s Steam inventory. The latter has the power to handle the objects in any way they like. Additionally, these things will disappear the day Counterstrike: Global Offensive is discontinued. It is still a proof-of-concept, though, and it will open the door for NFT gaming.
Enter GameFi, a combination of the words financialization and gaming. It is frequently linked to the P2E (play-to-earn) business model, compensating gamers for their gaming time with in-game items with real-world financial worth. On a decentralized server, NFTs give players clear ownership of in-game purchases that can be exchanged or sold.
CryptoKitties, introduced in 2017, was the first NFT game to garner interest. Axie Infinity, a P2E NFT game well-liked in South-East Asian nations like Vietnam, the Philippines, and Malaysia, would follow suit, especially during the Covid-19 epidemic. Based on the cost of SLP, gamers who played Axie Infinity in the middle of 2021 made an average of $55 daily.
Even investors can recognize NFT gaming’s potential. A $50 million investment in Animoca Brands, a game developer, and blockchain startup, was made by a group that included Blue Pool Capital, the manager of Jack Ma’s family fortune.
Despite the allure of possible earnings from gaming, favorable returns are not always assured. P2E games frequently have risks and significant upfront expenses that could not be recoupable depending on how you play.
Healthcare
Patients’ ambiguous responses to questions about their health, the dishonest sale of patients’ health records to major pharmaceutical companies for profit without the patients’ consent, and inefficient and inaccurate data collection from various healthcare administrators are all problems plaguing the healthcare industry.
In other words, it is challenging for healthcare professionals to get sensitive information when they need it for patient care. And data corporations are using such sensitive information for commercial purposes.
Imagine if all past, present, and future data regarding a patient’s health input could be extracted from their medical records and minted into an NFT. That situation facilitates quick and easy access to crucial data for healthcare practitioners.
Additionally, patients can provide their approval (when aware) to the party obtaining their data and the possibility of selling it. Every time this information is exchanged, an intelligent contract might provide a commission as tokens to the patient.
The health dapp Go is a simple decentralized NFT-based health application! Health Hero created this. A W-NFT (Well-Being NFT) is produced each time a new user registers for the app to represent them. The Go! The app takes data added to the W-NFT and can connect with other health monitoring applications, including Apple Health, FitBit, Google Fit, Garmin, and Wyze Band. The user’s W-NFT gains distinctive characteristics from those health-tracking applications that raise its rarity so that it may be exchanged in the open market.
Conclusion
NFTs can represent any item, right, or record. As is typically the case with historically momentous discoveries, NFTs are a nascent technology causing an unprecedented cultural and financial shift due to its rapidly increasing rate of innovation and acceptance.
As developers continue to discover ground-breaking applications, use cases, and value propositions, the prevalence of NFTs is set to grow. As NFTs support the growth and advancement of enterprises, the investment landscape is vast and constantly expanding. Even if NFTs might not be a good investment option right now for everyone, they are unquestionably a technological advancement that all investors and advisors should be aware of.
About the Author/s
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.
