NFTs (non-fungible tokens) are known for bringing transparency and verifiability to the digital art and collectibles movements, as well as the gaming and metaverse sectors. But as unique/limited-edition and transferable blockchain assets, NFTs serve a much wider range of use cases. Here are five ways these digital tokens are making a difference in the ways we live, work, and play.
1. Decentralized Naming Systems
Web naming systems map easy-to-read text to the less user-friendly information that IT systems use. The Domain Name Service (DNS), for example, translates registered URLs to numerical IP addresses. Decentralized versions of this idea, such as the Ethereum Name Service (ENS), work similarly, but map simple names to information linked to an Ethereum address.
Each name registered with the ENS is represented by an NFT that can be transferred to a new Ethereum address. Further, the information linked to an address from a name can include the address itself, other blockchain addresses, social media profiles, documents, and much more. Plus, the information is easily editable.
An NFT used to represent a name provides a verifiable point of access to all the data a user wants to make publicly available.
2. The Music and Video Industry
In much the same way NFTs have helped artists discover new ways to create their works and reach new markets, the tokens are also transforming how musicians create and share their music and videos.
The properties of NFTs—uniqueness, verifiability, transferability—offer musicians greater independence from labels and other gatekeepers of their industry, better enabling them to self-distribute their work and cultivate direct relationships with fans. Musicians can sell tracks as NFTs on marketplaces such as OpenSea, auction previously unpublished material as limited-release NFTs, and even sell rights to their works.1https://www.musictech.net/news/artists-selling-music-nft-making-millions/
These tokens can generate fast and significant interest from fans. Alternative musician Grimes sold digital art and videos as NFTs for almost $6 million on Nifty Gateway in 20 minutes earlier this year.2https://www.theverge.com/2021/3/1/22308075/grimes-nft-6-million-sales-nifty-gateway-warnymph Rock band Kings of Leon recently generated $2 million in NFT sales of their new album in just one week.
NFTs have the potential to replace conventional subscription models for “super-fans.” For example, they can be programmed so that the subscribers holding them can access premium music and video content or even highly exclusive benefits, such as lifetime front-row seats to concerts.3https://www.coindesk.com/kings-of-leon-to-release-new-album-as-nft-with-tokenized-tickets-for-superfans Those same NFTs can also be programmed to collect royalties for musicians every time they are sold and resold.
3. Event Ticketing
Using unique, unforgeable NFTs to represent tickets for specific sports and entertainment events helps to prevent scalping and scamming. Smart contracts can be used to make tickets non-transferable to prevent scalpers from purchasing sought-after tickets in bulk and then reselling them at inflated prices and prevent scammers from trying to sell counterfeit tickets.4https://cointelegraph.com/news/ticketmaster-wants-to-use-smart-contracts-to-support-millions-of-ticket-sales
On a podcast in March, Mark Cuban, billionaire investor and owner of the Dallas Mavericks, expressed a great deal of interest in NFT technology. “We’re trying to find a good option for turning our tickets into NFTs. We want to be able to find ways so that not only can our consumers, our fans, buy tickets and resell them, but we continue to make a royalty on them."5https://www.cnbc.com/2021/03/26/mark-cuban-dallas-mavericks-may-use-nfts-for-ticketing.html
4. Unique Experiences
Some industries are using NFTs to tokenize historic moments. The sports industry, for example, is capturing such moments using collectible card-style NFTs. Sports personalities are leading the way by including experiential content in NFTs that only owners can “unlock.” An NFT created by American basketball player Luka Garza includes the opportunity to meet him, compete with him in a game of HORSE, and join him for dinner and a movie.
5. Sensitive Personal Data
In the U.S., sensitive individual healthcare data is held by any number of insurers, physicians, clinics, etc., and may be incomplete, inaccurate, and fragmented because of federal rules that prohibit the disclosure and sharing of patient information. By attaching medical records to NFTs, individuals can preserve the accuracy of information and find peace of mind,6https://academy.ivanontech.com/blog/blockchain-in-healthcare-how-blockchain-can-revolutionize-the-medical-industry as only they can approve the addition of new data and allow doctors or others access to that data.
Endless types of other personal data, including academic and financial records, can also be attached to NFTs.
Integrating Online and Offline Life With NFTs
NFTs offer users proof of ownership of assets and complete control over them. Plus, because NFTs are blockchain tokens and the Ethereum platform provides an open and composable infrastructure, the NFT use cases described above can be integrated with a wide variety of DeFi or Web3 applications.
Read more about NFTs and key blockchain and DeFi developments on the Maker blog.