Exploring new applications of NFTs

Video games can help popularize non-fungible tokens (NFTs). — © AFP

Non-fungible tokens (NFTs) are more often associated with an image or other digital art element. However, there are five new areas where NFTs are set to be strong, according to Web3 expert Connor Borrego.

According to Borrego: “All of the use cases we see today for monetizing NFTs are centered around using NFTs’ unique identification property to track the value and ownership of scarce objects publicly in an anonymous but reliable way. In the future, we expect serial number technology to move into the background as a tool for software developers to manage the location of standard data structures and functions required to make their applications work, and yes, some of these applications may create games or tools that use NFT are collected by today’s users, but in the long run they will be used to manage new data streams yet to be developed and make existing data streams available for web3 platforms.”

He adds: “Because NFTs are primarily concerned with managing the creation, sale and use of data online, the use cases permeate all areas of the economy, as systems increasingly rely on data-driven intelligence to run their organizations. “

The top 5 uses for NFTs according to Borrego are:

Hot Use #1: Membership

Borrego notes, “NFTs are used for membership access to both online and offline experiences for community members. Because non-fungible tokens are simply a serial number for a piece of data, like an image, on the internet, who owns the image from the official NFT -the community registered on the blockchain and publicly verifiable NFT communities often create gated experiences that require members to verify that the NFT in the user’s cryptowallet is the official collectible by comparing their unique wallet number to the one registered as holding the NFT on the blockchain, and providing that user access after they’ve verified ownership. It sounds like a lengthy process, but in many cases it simply means entering your password to authorize the transaction from your wallet app of choice.”

Hot Use #2: Limited edition digital art or music

On fundraising, Borrego says, “Collecting limited edition digital art or music is one of the most popular and well-known ways NFTs are used to make money. Mostly these items are just collectibles that fans of the artist can buy as a form of memorabilia to show off to demonstrate how much they support their work, but some of these NFTs come with extra benefits like a royalty share and distribution interval if commercial licensing of the art to generate income.”

He further adds: “For a visual artist, this could mean turning a favorite piece of theirs into printed posters, notebooks, stickers displaying the art, while a collectible could tie in revenue from various streaming services where the song can be distributed. Most media are natively digital, or can easily be represented digitally, and remain the lowest hanging fruit for monetizing NFTs within the data economy, and we expect the majority of the first cutting-edge NFT companies to emerge from this space.”

Hot Use #3: Limited edition physical products

With other art-related materials, Borrego finds: “In the art world, and in other valuable asset markets such as real estate or diamonds, there is a concept known as provenance, which is about understanding the chain of custody of an object to its creator, it brings trust and transparency to the transaction and the integrity of the asset in question. Because of how the blockchain works, the ledger technology provides this documentation by default so that it can be used as a reliable source of information for the transfer of ownership of valuable assets.”

Borrego states the benefits: “Forgery, counterfeiting and fraud are not solved by the introduction of this technology as tamper-proof hardware that can be physically attached to the asset in a way that does not significantly devalue it, but NFTs gradually do. advance the record keeping process for valuable items and we expect notary services to start offering access to the blockchain within their core offerings extending this use to more physical assets. We expect luxury goods and items such as branded shoes, sneakers, bags and dresses to drive much of the growth in the limited physical product space because there is existing demand for these types of aggregator markets, which are ripe with fraud but do not have functional provenance systems for their goods .”

Hot Use #4: Financing option

With fintech, Borrego says, “NFTs can be sold as collectibles, coupons or memberships which are great tools for communities or brands that don’t have well-established business models because you’re able to sell something of value to people who believe in your mission, and that contribution can give them different levels of control over the decision-making process related to the money raised.”

With new companies, there is also a use case: “For startups this is very similar to pre-selling your product and using a coupon NFT with lifetime access to your future software product, while for non-profits this looks like a digital bake sale hiring a professional chef to raise money with the best baked goods, or even as an online country club. NFTs represent future ownership of specified value related to the activities of the organization that created and sold the NFTs to begin with. Communities may choose to do this, because it is a new form of engagement between organizations and the public whose ownership is a form of governance while generating additional revenue streams for an organization.”

Hot Use #5: Data protection/use cases for content creators

Borrego fits NFTs with broader cyber issues, finding: “For now, the people who will get the most value out of creating NFTs are content creators of any medium or social media. Even if you are not able to monetize your content today through the existing advertising platforms, it allows the limited fan base you have today to collect your viral moments and support your continued work online. Monetizing digital properties such as social media sites, websites and apps have a variety of predictable sales models to choose from, and so most monetize a combination of merchandise and ads, NFTs simply offer an additional option and a way to reward community members , subscribers and followers, potentially with a chance that their item could be more than just a valuable collectible in the future. NFTs are a tool for software developers to manage pieces of data and content, like a jpeg or a video, with a unique serial number, which is what makes it unique and thus something you can own; the future value of this is enormous in our data-driven economy.”