Essentially, NFT owners automatically receive a digital certificate of ownership. This means that NFTs can be applied to a variety of commercial projects in the future, which implies additional profits. For example, famous sportswear brand, Adidas, released an NFT collection called Into the Metaverse. Token holders become members of an exclusive fan club. They can buy unique merchandise and put forward their ideas about the company’s future projects. Let’s take a look at the top 5 ways to use NFTs and the future prospects of this industry.
Digital Art and Collectibles
Works of art and collectibles are the most popular uses for NFTs. The success of NFT collections such as the CryptoPunks or the Bored Ape Yacht Club has spread far beyond the crypto community. Although some consider crypto art to be mediocre and overpriced, the price tags for individual digital paintings and collectibles can fetch up to millions of dollars. For example, in October 2021, token #8817 from the Bored Ape Yacht Club NFT collection was sold at Sotheby’s for $3.4 million.
Various collectibles are another popular case. For instance, the NBA Top Shop represents collectible NFT cards depicting outstanding game moments in American basketball. Users can tokenize their collection of stamps, magazines, soda bottle labels, etc. Anyone can create and offer their own NFT collection of images or collectibles for sale. Popular marketplaces, such as OpenSea, provide this possibility. To tokenize an image or collectibles and then sell them, a user must:
- select a particular marketplace;
- log in to a marketplace using a wallet created on one of the blockchains, such as Metamask;
- choose an item or file to be tokenized;
- create a name for an NFT and a short description if desired;
- put a token up for sale, paying the costs related to the marketplace’s services.
According to The Block, art and collectibles are still the most popular ways to use NFTs. A token can often be both a collectible and an art item, such as NBA Top Shop collectible cards. As of February 24, 2022, the NFT trading volume for the past month in these categories was nearly $600 million. NFT art is seen as a worthwhile investment today, as the market value of tokens could grow by leaps and bounds in the future.
NFTs and Real Estate
Real estate is a complex domain with high trading volumes. The concept of ownership is one of the most crucial factors. When it comes to real estate, the transfer of ownership is quite a complicated procedure involving lawyers, banks, and various financial institutions.
NFTs greatly simplify transferring ownership in real estate without the risks associated with falsified documents. By converting the legal documents for owning an apartment into an NFT, the owner receives full ownership of the asset, but in a digital form. For example, in April 2021, broker, Shane Dulgeroff, auctioned off a property as an NFT. The buyer ended up with digital ownership of a private home in California.
It is worth noting that financial and legal institutions are not yet particularly supportive of the digital titling of various properties. However, the application of NFTs in real estate seems very promising.
Buying and selling certain artifacts in computer games is an essential part of the process for many modern gamers. Applying NFT technology to games is still a prospect, but there are already examples of successful NFT implementations in games, the individual elements of which integrate with blockchain technology.
Axe Infinity and Battle Pets are quite famous games in the cryptocurrency community. Because of their cartoon style, they may seem rather primitive at first glance, however, in reality, the price tags for certain Pokemon-like characters reach hundreds of thousands of dollars. In addition, users can trade characters in the game and develop new species. The cost of a certain character directly depends on its characteristics, such as:
- rare appearance;
- special abilities;
- characteristics for subsequent breeding.
Therefore, tokenized video game characters can be regarded as collectibles that can be sold profitably on one of the NFT marketplaces.
NFTs and Music
In 2022, a user can tokenize an audio file or song and make that token a collectible item. For example, an NFT in the form of a piece of music or a short audio file can be created and put up for sale on the OpenSea marketplace.
For professional musicians, blockchain technology can solve a number of issues that are currently pressing for the industry, such as:
- fair distribution of royalties;
- fighting the distribution of counterfeit concert tickets;
- the need for intermediaries in the release of musical material, etc.
Famous rappers, Pitbull and Lupe Fiasco, have already spoken out in favor of the introduction of blockchain technologies for artists to receive fair royalties and develop the music industry in general. Musicians interested in blockchain technology opportunities for music rights management, data exchange, and equitable royalty distribution can use such services as Mediachain, Vezt, Digimark, etc. Generally, the prospect of involving NFTs in the music industry depends on the trends and development strategies of the main streaming services.
Clothing and Accessories
Besides the already mentioned NFT collection, Into the Metaverse by Adidas, many well-known brands in the fashion industry successfully apply NFTs to release products.
In 2021, Louis Vuitton presented a special game in celebration of the brand’s 200th anniversary, where it was possible to collect a total of 30 tokens by performing certain tasks. It is interesting that according to the developers, the owners of these NFT tokens could not sell them later.
In March 2021, the creators of virtual sneaker brand, RTFKT, sold more than $3.1 million worth of shoes. In December 2021, the RTFKT startup was acquired by Nike, one of the giants in the sports industry. Another example is the Gucci and Balenciaga collaboration. In 2021, as part of the Aria spring show, the companies presented a joint NFT video clip, which was later sold at Christie’s for $25,000. When it comes to well-known clothing brands, using NFTs is first and foremost a perfect way to communicate with customers representing the younger generation.
Conclusions and Prospects
Users increasingly see non-fungible tokens as an investment for the future in 2022. Thanks to blockchain technology, the ownership and authenticity of a token cannot be falsified, which is one of the main advantages of NFTs. A wide variety of art and collectibles continue to be the leaders in tokenization. Users are also tokenizing real estate, clothing items, videos, and music.
Looking ahead, NFTs can be used to digitize IDs, certificates, and other documents. Blockchain technology will enable users to reliably protect themselves from possible forgery or loss of personal documents. NFTs can also be used to distribute tickets to different kinds of events. This will help to eliminate the problems associated with resellers and counterfeit tickets. Besides, tokenization already opens up great prospects for computer game developers and movie industry representatives.