Unlike traditional cryptocurrencies such as Bitcoin, NFTs (non-fungible tokens) are irreplaceable. Each individual NFT represents a valuable and unique item that can be stored digitally. In essence, NFTs are cryptographic tokens on blockchain technology that act as a security verification method.
NFTs experienced a growth rate of 21% in 2021. Different industries are tapping into the NFT use cases to generate more revenue in cost-effective ways. This guide reflects common NFT use cases and applications, from decentralized marketplaces to digital collectibles.
Let’s dive in.
1. The Gaming Industry
The NFTs innovation is disrupting the gaming industry. Axie Infinity requires players to use NFTs to verify their earnings. Gaming enthusiasts can use non-duplicable in-game elements, such as a character in a game, to collect exceptional items. Depending on their rarity, these in-game elements may increase in value.
The best part is that players don’t have to worry about fraud and scams when selling them since blockchain transactions don’t require intermediaries to happen.
Besides, these gaming platforms can accommodate players’ inputs, allowing them to vote on the game’s development. For the most part, players’ monetary stakes increase the overall value of play to earn games.
2. Digital Arts
The most commonly known use case of NFTs is the representation of digital arts. NFT arts allow artists to earn a living off their work while gathering a loyal fanbase simultaneously.
An Artist can attach smart contracts to a piece of art to add functionality. In essence, the artist mints an NFT representing their piece of art to guarantee customers that that particular NFT-based art is the most aesthetic one in existence. It’s possible through immutable blockchain technology.
But the artist must understand that there is a need to maintain the value of their art. They can achieve this by leveraging strategies like social media, community building, and continued growth. This way, they will be able to earn passive income as well as get a cut on royalty percentages, all thanks to smart contracts.
3. Supply Chain
Before blockchain technology came into play, there was a constant demand for reliability and transparency in the logistics sector, particularly the food industry. This led to IT companies promoting using NFTs to improve logistic operations. NFTs metadata can be attached to a product via blockchain technology to give it a tamper-proof identity.
This helps consumers track physical goods from the origin to the endpoint, allowing them to see what they are paying for. It also creates a win-win situation since the business is able to attract more customers while consumers are sure what they are buying is genuine.
4. Real Estate
NFTs can also be used to represent physical land and other properties on a blockchain network. As such, blockchain users can feature all the attributes of a specific piece of land, including location, measurements, price, and more. NFTs can help realtors keep off malicious actors looking to tamper with the ownership of a specific piece of land.
Besides, NFTs allow you to own virtual land in the metaverse, a shared virtual environment accessible via the internet. In that case, you can use NFTs as a transaction method to buy and sell land in the metaverse. Once you buy a parcel of land here, it is transferred as an NFT into your wallet.
5. Music Industry
NFTs have also revolutionized the music industry. Smart contracts allow musicians to create unique digital assets that can be traded on the NFT marketplace. That means musicians can monetize their work by creating and selling music NFTs for cryptocurrency.
Music NFTs also allows music lovers to support their favorite artists while getting some financial benefits from the art. Buying a piece of music NFT means purchasing something unique that you can resell to other fans at a higher value.
Like NFT collectibles, music artists must attach their art to a blockchain network such as Ethereum that uses smart contracts. Once the music NFT is made a part of the blockchain network, it becomes immutable; hence it can not be copied or stolen from the owner.
Music NFTs also give creators the power to decide on the number of copies that will exist of that particular song. The best part is that they can sell these copies through an exchange supporting NFT trading.
6. Event Participation in the Ticketing Industry
Since NFTs allow everyone to create a real value they can benefit from, the ticketing industry has leveraged this technology to create NFT tickets. NFT tickets represent tangible tickets for events such as sports and music concerts.
Usually, these tickets contain unique QR codes that must be scanned for you to gain access to a specific event. This helps keep unauthorized individuals from accessing such events.
Similarly, NTF tickets are immutable since they are attached to a blockchain network. A good example is NFT Kred, an initiative that helps live events build strong fan communities by developing NFT tickets for Enterprise Institutions and celebrity events.
7. Fashion Industry
Fashion NFTs can be used as collectible pieces in the fashion industry. For the most part, fashion NFTs are used as virtual garments that you can wear at an event, an official meeting, or when meeting with friends.
Major players in the fashion industry have already embraced this technology. For instance, Gucci sold a digital-only bag on Roblox for $4,115. Roblox is an online game platform allowing users to program games, create them, and interact with other players.
Although most NFT use cases are still in their infancy, this technology has seen significant adoption in a relatively short period. Therefore, more tremendous and disruptive changes are expected to come.
The best part of using NFTs is that once something is created, it is almost impossible to forge it. Therefore, you can rest assured that this technology guarantees the authenticity of various items, especially in the logistics sector. Besides, the technology has the potential to make various services easier to use while assuring transparent transactions at the same time.