For a long time, blockchain technology was perceived as a payment network closely related to financial applications. However, NFTs have changed this perception. It’s safe to say that blockchain now looks like one big decentralized development platform containing many different assets, involving unique personalities, steeped in cultures, and dynamic communities that provide both financial and intangible social value.
NFTs are also a new paradigm in digitizing physical assets and interacting with originally digital assets. As the world moves towards digitization, the need for technologies capable of securely authenticating digital assets will only grow. NFTs fill this gap and have enormous potential to change the way we function as a society.
There are many examples of uses of NFTs, from art to games. Proof of origin is one common use case, but we’re just starting to explore it. Any product or service that is or depends on an intermediary can be tokenized using an NFT. These are important documents such as legal contracts, real estate documents, insurance, and licenses. Just as property rights have fueled the growth of the traditional economy, NFTs will do the same for the digital one.
Even if companies and governments don’t participate in a decentralized network, the technology behind NFTs is too big to ignore. At the very least, they will have to consider how NFT can significantly reduce bureaucracy.
But beyond the more obvious use cases, through the act of tokenization, NFTs allow us to decompose abstract social constructs into their components. People have been assigning value to various things for a long time, but with NFTs, we can tokenize even memes. This opens up the most diverse, exciting opportunities for developing decentralized brands and communities.
The NFT industry is bursting with innovation. New use cases appear every day, expanding our imagination and possibilities. However, correctly classifying the industry is difficult, as many interpretations exist. NFT is most popularly used in such areas as:
- Utilitarian NFTs
The sale of NFT works by the author is quite simple and fast, as it allows you to avoid intermediaries and formalities that exist in a certain field. At the same time, do not forget that anyone can digitize the work. The person will not own the original work, since NFT does not provide such an opportunity. The original work’s author and the owner will always be in the corresponding status. An analogy with a physical work follows here – there will always be an original work and its author, and there will always be copies.
The most convincing example is the use of technology by various well-known brands. Popular cases:
- Pizza Hut. The fast food chain introduced a new pizza named 1 Byte Favorites. As the company says, this is the world’s first NFP — Non-fungible Pizza. The new line features a limited number of eight-bit images featuring the chain’s most popular pizzas.
- In 2021, the company released new chips — in a virtual format. The CryptoCrisp flavor is a 50 NFT with an animated image of a golden can of Pringle’s spinning. The picture was created by the Ukrainian artist Vasyl Kolotusha.
- The Gucci fashion house, together with the Superplastic brand, developed and released a line of designer NFT toys. The first part includes 10 limited edition NFT tokens. Together with the NFT, the buyer receives an original handmade ceramic toy.
The NFT field has just begun to gain popularity, and we are at the beginning of this NFT revolution; new NFT projects with new ideas for applying this new technology appear every day. It’s hard to say how this area will change in the future, but it definitely won’t be like before.