By now, most of us have heard about NFTs at least once. Some may think it’s a fad. Others, me included, believe that it is soon going to become an integral part of our lives. It is likely that you might have tried to understand NFTs and blockchain in theory, but found yourself confused. Imagine trying to explain the internet to your parents. Concepts such as TCP/IP protocol, data packets, and the like, would probably sound absurd to them. On the other hand, explaining how to use WhatsApp and YouTube seems easier. The same is true for any technology. What always helps in understanding a concept or technology better is knowing its use cases. So, today, let’s talk about some use cases of NFTs, aka Non-Fungible Tokens.
Basics First
NFTs are Non-Fungible Tokens.
Fungible: replaceable by another identical item; mutually interchangeable. Examples – money, oil, gold, cryptocurrency, consumer items on store shelves, etc.
Non-Fungible: unique, non-interchangeable item. Examples – land, art, items used by people (the pair of spectacles that Mahatma Gandhi wore is non-fungible).
NFTs are powered by smart contracts that handle transferability and verify ownership. The blockchain technology enables such contracts, where the date, time, and other unique information can be stored digitally. Nobody can alter it, that is, it is immutable. It is similar to replacing the signature on a contract in physical form. In simpler words, an NFT shows and verifies something that you own digitally.
The question is, how do they benefit us in our daily lives?
5 Use Cases of NFTs
NFTs as investments
1. Art
This is by far the most popular use case of NFTs that I’ve seen. NFTs can assure proof of ownership. A digital piece of art can easily be copied otherwise. But once it is on the blockchain, there cannot be any alteration. Artists like Beeple have made millions selling their digital artwork. You can explore these NFTs on marketplaces like OpenSea and Rarible.
2. Collectibles
Collectibles are items of value that are acquired by collectors. Traditionally, people have collected stamps, coins, vintage items, sports cards, and more. NFT Collectibles are the same in principle, things that people collect and assume to have a value. Two examples of NFT collectibles that have made it big are Cryptopunks and Bored Ape Yacht Club. These come with unique features such as a ticket to an online social club. Similarly, Gary Vee launched collectibles called Veefriends. Anyone holding Veerfriends not only receives the collectible, but also gets a chance to attend his annual conference for the next three years.
3. Real Estate
Decentraland and Sandbox are examples of metaverse where people can buy NFTs. These NFTs give one ownership of digital real estate. Just like in the physical world, these metaverses have limited land. So, if demand goes up, prices will soar. One can develop this land and build anything, right from a house to an office or even casinos, restaurants or libraries. These can be run as actual businesses too! When we start thinking about it, it’s overwhelming to imagine all the possibilities, and how this space can evolve.
NFTs with more practical uses
4. NFT for Supply Chain
This is one of the best use cases I’ve come across. Imagine you’re buying medicines and you know the entire supply chain. The problem of counterfeit medicines is huge. A transparent and authentic supply chain can solve this problem. We can solve a number of other problems in the real world using this technology. Estimating the carbon footprint of a product, ensuring the quality and origin of goods, providing transparency in transport related costs, the possibilities are endless.
5. Events and Ticketing
This is one space that’s coming up with creative use cases of NFTs. An NFT can surely serve as an entry ticket to a concert, but at the same time can have additional features such as meeting the artist backstage, or snacks and drinks at the venue, etc. It can eventually also become a collectible, the way an entry ticket to the 1983 World Cup can have value now.
Come to think of it, NFTs could replace just about any contract in the real world. It has also opened up opportunities for more creative contracts. For example, Ranveer Singh can release NFTs where the NFT holder gets an opportunity to play a game of cricket with him for 30 minutes. Ankur Warikoo can have NFTs where the holder can invite him to their podcast. An artist can attach tangible products to their NFT so that whoever buys the NFT also gets an original, physical painting.
These are just some of the use cases. If we let our imaginations run wild, there is no end to the way we can use NFTs.
Of Metaverses and Our Universe
The Web 3.0, as it is called, has other concepts such as the Metaverse. The idea of it may seem like a scene right out of the Netflix series, Black Mirror, but think again, and it seems inevitable. While discussing this with a friend, I was asked, “Won’t we be glued to our screens full time then?” To which I replied, “Aren’t we already?”
Ever since screens came into our lives, they have slowly and steadily taken our time away from the physical world. I came across some interesting statistics recently. When televisions were launched, 15% of our attention was diverted to screens. With computers this attention diversion increased to 30%, and with smartphones it is now up to 50%. With innovative technologies like smart glasses and AR/VR (augmented reality/virtual reality), screens are bound to grab our attention even further. In simple words, this is what the metaverse is; a more immersive experience of the digital world, a world in which we already spend more than half of our time. More on the metaverse in a later article.
Technology is ever-evolving and whether we like it or not, we have all adopted it in our lives. Just as the internet revolutionized the world, the Web 3.0 will be revolutionary too. The question is, how can we benefit from it? How can we take our businesses to the next level leveraging technology? I would love to hear your thoughts on this too. Have you thought of how you can ride the Web 3.0 wave? Are you already doing so?
PS: We have a movie recommendation this week. It’s a 2018 film based on virtual reality – Ready Player One. It will give you a glimpse of what the metaverse may look like.
