NFTs' emerging trends could change the current generation’s relationship with the web, brands, commerce, buying and selling art, and even the way it creates and experiences music. Hence, 2022 seems to be the year when the promise of Web 3.0 and NFTs will really take off. This article will dive into the world of non-fungible tokens, their applications and use cases, and how these tokens are helping to shape digital ownership.
What Is NFT (Non-Fungible Tokens)?
A non-fungible token (NFT) is a unit of data stored on a blockchain (a digital ledger) representing a unique digital item. An NFT is a cryptographic token, but unlike cryptocurrencies like bitcoin and many other networks or utility tokens, NFTs are not mutually exchangeable, in other words, they are not fungible.
- Fungibility: It is basically the ability to replace an item with something identical. When an item is fungible, normally there are many identical items. A fungible token can be shared and traded for another.
- Non-Fungibility: It provides singularity as a major characteristic. A non-fungible token is one of a kind and no other identical token can exist.
The Use and Application of NFT as Identity
Proving ownership and secure transfer of ownership is what NFTs do best. That's why NFT technology is perfect for effective identity verification applications. It can be used for everything from video game avatars to facilitating borderless travel, rapid customer identity verification and even hosting decentralized government services.
Commercial Use of NFT
CryptoKitties, a virtual cat trading game, is the first and most famous example of commercial use of NFTs. Trading cards have become big business in the NFT space since CryptoKitties became popular. According to USA Today, NBA Top Shot has sold more than $200 million worth of NFT cards and related collectibles so far. Luka Doncic Dallas Mavericks NBA autograph trading card sold for $4.6 million is the largest transaction.
NFTs can hold unique programmed information about an asset or property; this layout means they are well suited for providing identities, certificates or licenses and qualifications.
A particular document or certification that is released on the blockchain as an NFT can be traced back to its origin to confirm its legitimacy. For identification, NFTs can be used to digitize medical history, personal profile, education and other identity attributes and place them in the hands of the individual, giving them full control over their data.
With NFTs being integrated into existing video games and hundreds of new games being developed entirely with NFTs in mind starting in 2021, this technology has enormous potential to reshape the way gaming markets operate. The "play-to-earn" programs offered by popular games such as Axie Infinity have traded over $1 billion on the Axie platform, making it one of the most valuable NFT projects in the world.
The Digital Art of NFT
There is no doubt that NFTs have completely revolutionized the concept of digital art by providing creators with guaranteed means of proving ownership and directly making a profit from the sale of their work online. However, in the near future, it is likely that we will not only see new digital artworks created and sold as NFTs, but also galleries and private funds minting and selling digital twin NFTs of real, physical artworks.
Above all, NFTs can radically reshape the relationship between musical artists and their fans. This technology allows music fans to invest directly in the careers of their favorite musicians and artists, enjoy exclusive benefits, and benefit from the early purchase of albums or songs that may increase in value over time. NFTs can directly benefit music artists, as they avoid the need for a record label, distributor or streaming platform.
Currently, NFTs are primarily used to provide artists, musicians and other creators with digital certificates of authenticity and ownership. In the very near future, almost every object, from vegetable seeds to architectural blueprints, will have an NFT certificate, allowing you to instantly know who the current owner and/or original creator is. By adding digital tags to physical objects and real-life experiences, NFTs will create new business opportunities.
Have you ever participated in a clinical trial for money? Everyone knows that data is the most valuable asset in an increasingly digital economy. That's why companies like Aimedis are enabling patients to own and monetize their personal medical data, providing new revenue streams by selling it to pharmaceutical companies.
NFT DNA also exists, in which data will be stored on Oasis Labs' Parcel development platform. Meanwhile, buyers could receive a "30x whole genome sequencing" of their own DNA through George Church's co-founded DNA sequencing company, Nebula Genomics.
NFT: Metaverse Identity
An NFT project in the metaverse is about linking these two central concepts of the crypto domain. The metaverse is a virtual reality, often immersive, powered here by blockchain technology. This technological innovation allows for the registration and authenticity of the ownership of an object on the blockchain.
Therefore, it is possible to know who owns a particular piece of virtual land at any time. This makes it possible to consider many applications, including the purchase and resale of these virtual digital goods. Metaverse and NFT are both intimately linked and work in harmony in the Web 3.0 ecosystem.
But in the jungle of NFT projects in the metaverse, it can sometimes be difficult to find a way around. Here is a selection of the best projects of NFT in the metaverse.
- Souls of Nature: It is a project which combines NFT, gaming and metaverse. This project puts at the heart of its operation the protection of biodiversity and the environment.
- Decentraland: It is one of the leaders in the crypto metaverse industry. It is currently the 32nd largest capitalization in the market and one of the most popular projects. Launched in 2019, this metaverse is one of the first to come into existence. In Decentraland, users can purchase different parcels, LANDs, as NFTs.
- The Sandbox: It is a metaverse project, a bit similar to Decentraland. It has also been a great success over the past few months. On The Sandbox, people can purchase different virtual parcels and build many infrastructures on them.
Soulbound Token: The new type of NFT imagined by Vitalik Buterin
According to Vitalik Buterin the co-founder of Ethereum, the next evolution of NFTs is SoulBound Tokens (SBTs), non-transferable NFTs. SBTs are then non-fungible tokens associated with an individual and cannot be transferred. This has multiple uses, and some concerns such as privacy or discrimination.
Indeed, these SBTs also have other applications in the framework of DAO, allowing the emergence of a DeSoc (or decentralized society).
How to Buy Or Detain NFT?
To buy NFTs, users need cryptocurrencies and to store them, a crypto wallet. Everyone can create a crypto wallet for free by signing up on an exchange platform. Once this is done, they will be able to store the cryptocurrencies purchased in the wallet.
NFT technology and its application areas are evolving rapidly. New NFT projects are emerging every day. From the Busan Metropolitan Government in Korea announcing an NFT conference, to the International Cricket Council launching NFTs for cricket, to CoinRunners funding a movie by selling NFTs.
The few consistent trends in NFTs over the past year are their steady growth, increasing interest, and ever-growing applications.
The future that these trends show is interesting. While many people worry about the implications of the metaverse and the rise of AI, it's a future full of possibilities and brands can benefit from NFTs, the metaverse, and Web 3.0 to better engage their consumers.
It's a future that bridges the gap between consumers and creators, gives value and security to digital assets, and, for better or worse, will disrupt the world.