Are NFTs only about digital art? Actually, no.

2022-01-05News

Written by: David Bailey-Lauring

Those into their non-fungible tokens and the NFT environment are probably aware of the misconceptions surrounding what NFTs can be used for.

Headlines of purchased digital artwork selling for gargantuan amounts have led many to believe that non-fungible tokens are predominantly offered as artwork and can be 'right-clicked saved.'

This is not the case; NFTs have many use cases other than digital artwork. We’ve written about 10 industries that are early adopters in using NFTs.

NFT use cases

1. NFTs in supply chains and logistics

Logistics worker

The primary function of non-fungible tokens in the supply chain lies in authenticating products, ensuring their quality, and verifying their origin. Although in the early stages, non-fungible tokens on the blockchain are suitable for logistics applications because of their transparency and immutability, which keeps supply chain data authentic, accurate, and reliable. Knowing the location of the goods, their origin, and how much time they have been in transit is vital in the food and other perishable goods industries.

Furthermore, non-fungible tokens eliminate counterfeiting, help track and trace the movement of supply chain goods. For luxury fashion brands exposed to counterfeiting their products, NFTs guarantee authenticity.

Within the automobile industry, non-fungible tokens provide information regarding each material and component in a particular product for every business associated, like those that supply individual parts, helping with cost control. Lastly, non-fungible tokens are useful for enterprises looking to track the use of recyclable and sustainable materials.

2. NFTs for ticketing/branding

While non-fungible tokens have found an affinity in the art world, they are also being used in other places thanks to their ability to prove scarcity. Concert tickets rely on non-fungibility to prevent fraud, making them prime contenders for adopting non-fungible tokens.

One example was the rock band Kings of Leon releasing non-fungible tokens to commemorate their latest album release. The most limited of the bands' three tokens were an NFT ticket to a concert as part of the album launch.

Yellowheart is one such company that assists record labels in gaining tighter control over merchanting and tickets. NFT.Kred allows any event organiser to create a non-fungible token as a ticket in just a few clicks.

3. NFTs to gain access

NFTs can provide access similar to a ticket stub. NFTs are non-fungible and trackable via the blockchain, and thus the ideal solution for removing physical stubs and providing digital, trackable, and traceable options.

Additionally, thanks to smart contract capabilities combined with NFTs, you can write in terms & conditions, expiry dates, and other restrictions. So, this one NFT makes it simple for both parties to keep track of their tickets and the information stored on that individual ticket.

Gary Vaynerchuck's NFT project, VeeFriends, is one perfect example of non-fungible tokens that provide access. All VeeFriends token holders obtain access to VeeCon — a multi-day event exclusively for VeeFriends, making them highly collectible.

4. NFTs as collectibles

Wof NFTs

Owning a non-fungible token has several benefits, one being the collectibility aspect. Non-fungible tokens are often associated with collectors due to their ease of verification and authentication.

Many collectors face one concern regarding physical collectibles: their ability to replicate or make original copies. Buying a fake collectible is upsetting, costly, and often associated with organised crime.

That's why NFTs are invaluable.

The time a non-fungible token is minted, it is tracked on the blockchain. The blockchain allows you to view an NFTs entire transaction history, including its date, who created it, and its current location, thus enabling collectors to quickly verify an asset's authenticity. Non-fungible tokens may also help collectors make better buying decisions since they can see the sales history of any non-fungible token.

In addition to the ease of authenticating a non-fungible token, collectors can also trade their collectibles on one of the many available non-fungible token marketplaces, making non-fungible tokens a stress-free and frictionless way to verify and buy and collect an asset, regardless of where they own it or not.

5. Time NFTs

While much of the focus on non-fungible token use cases are associated with creating a verified version of a product, the technology's potential is also being used to tokenise people's time.

With freelance work exploding worldwide due to the great resignation - freelancers are set to be 80% of the global workforce by 2030 - employment marketplaces like Upwork have made millions by facilitating employers to hire freelance and casual workers.

Upwork generated $374 million in revenue in 2020. That led to the emergence of projects like microsponsors that use non-fungible tokens as a way for freelancers to get hired without paying intermediaries.

The time a non-fungible token is minted, it is tracked on the blockchain. The blockchain allows you to view an NFTs entire transaction history, including its date, who created it, and its current location, thus enabling collectors to quickly verify an asset's authenticity. Non-fungible tokens may also help collectors make better buying decisions since they can see the sales history of any non-fungible token.

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6. NFT loans

NFTs can replace traditional loans, offering numerous benefits over having a stack of papers and several obstacles applicants need to complete before they can even qualify for a loan.

With NFT-backed loans, you can access and keep track of the leased NFT provided by following the transaction from the initial lending date. Suppose a loan repayment defaults. In that case, the owner can automatically claim back the NFT with the entire process taking place without intermediaries.

Thus, loans are strictly peer-to-peer, keeping fees low, trust high, and transparency at the forefront of the entire contract.

Today, some NFT loans include marketplaces that allow you to offer your non-fungible tokens as collateral in exchange for a loan. These loans are immediate, decentralised, and automated, all advantages you won't receive with a traditional loan.

7. NFT coupons

People already use digital coupons daily. Whether we add a coupon code to our purchase at the checkout or redeem our free product on the McDonalds' app, humans are attracted to the idea and ease of using digital coupons. So, how can non-fungible tokens be used to make coupons even better?

Non-fungible tokens can be kept as coupons inside a single digital wallet, meaning you can organise all the coupons you've collected in an easy-to-view manner in one location. Plus, since the coupons are stored in digital wallets that public eyes can view, the companies providing these coupons have the potential for more exposure.

As well, smart contracts can automatically deactivate any coupons which may expire and provide all the terms for the coupon within the non-fungible tokens. Additionally, you can trade and sell owned coupons on NFT marketplaces, making coupons a way to create and save money.

One more consideration is that NFTs could be used in the metaverse as virtual coupons. As more companies like Sony, Meta, Microsoft, and Nike make their way into the metaverse, they will search for ways to provide their loyal customers with special promotions and discounts, with NFTs being an excellent option for this purpose.

8. NFT memberships

Like a coupon concept, NFTs can also be used as a membership to attend special events and gain access to limited-edition products and unique services. A non-fungible token membership is frictionless, transparent in its intent. It permits membership to be effortlessly bought, sold, and traded for any asset on the blockchain.

Owning all your memberships in one wallet or place, regardless of the membership type, makes it much easier to track all of your memberships. People can also use memberships to demonstrate their loyalty (or superiority) to particular peer groups, potentially leveraging their brand and even their credibility.

For instance, one NFT that offers collectors membership access is the renowned Bored Ape Yacht Club (BAYC). The BAYC NFT collection doubles your membership to a swamp club for apes.

Also, collectors of BAYC non-fungible tokens love demonstrating their asset by splashing their BAYC NFTs across social media, primarily as their profile picture, and thus, showing how particular non-fungible tokens can leverage their brand clout.

9. P2E (Play-to-Earn)

Play-to-earn is enormous for both gamers and NFT collectors alike. Games including Axie Infinity offer players a way to earn money by investing and spending time in the game. The gaming industry has been adept at providing players the opportunity to customise and profit from their in-game experience.

Players earn cryptocurrency to exchange for fiat currency by breeding, trading and battling others.

This use case for NFTs, with its ability to earn real cash by playing a game, will get more people playing P2E NFT-based games and invest more time and money in them.

Axie Infinity is one example of P2E NFT gaming in this space. Fortnite is another and one of the leaders in P2E style gaming.

In 2019, Fortnite's 350 million players spent an average of $82 on in-game content. The following year the company made $5.1 billion with its users buying clothes and accessories to adorn their avatars. However, the gaming industry has struggled to combat fraud.

There are reports of buyers being mis-sold items or users being subject to phishing attacks. NFTs offer a layer of protection against fraud as they can provide a secure way of verifying ownership and keeping player accounts more secure.

10. NFTs as virtual accessories

Virtual accessories are gaining in popularity. Already seen some big-name brands, including Nike, Gucci, and D&G, enter the NFT space, offering collectors the first opportunity to buy virtual goods.

These virtual accessories are sold in the form of non-fungible tokens. The holders of these digital assets can use them in a virtual world now widely known as the metaverse. User-operated virtual avatars, accessories, and various events will begin to populate the metaverse.

Moreover, some of the virtual accessories that NFT holders can purchase are eligible to unlock the physical product itself once it enters the market, but at limited-edition drops that are not publicly available to all.

NFTs have several purposes

You can apply non-fungible tokens everywhere you see something unique, be it art, legal documents, personal identification cards, or any branded product.

NFT use case possibilities will be endless, and as part of Web 3.0, is a new industry that is growing at a phenomenal rate.

NFTs have captured the world's attention by disrupting the art industry. But there are several other sectors non-fungible tokens are primed to change.

Read about more companies in the NFT space here.

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