NFT melts pave the way for better use cases

As the market for cryptocurrencies continues to storm into another cryptocurrency winter, it would be tempting for investors and decision makers to focus on the current fall in prices at the expense of other areas. Tempting, but an approach that would be a disservice to the investors themselves that regulators are so actively trying to protect. Volatility is part of every asset class, cryptocurrencies are still a new type of asset and technology, and as painful as recent recessions are, they should not be the main focus of investor talks.

That said, it is important to acknowledge the reality that of the wide range of cryptocurrencies available on the market, non-fungible tokens (NFTs) have perhaps created the most conversation and controversy. Widely popular and promoted by entertainers and influencers of all kinds, including many who are not normally associated with solid financial advice, the allure of NFTs has proved difficult for investors to ignore. Nearly $ 40 billion has been invested in the NFT area by 2022 at the time of writing, and with the current decline in total cryptocurrency prices, a significant percentage of these investments are likely to be underwater, if not nearly worthless.

However, such dramatic headlines and injuries overshadow the very real and tangible use cases that NFTs can – and will – drive forward.

Digital identity. An idea and a theme that, not surprisingly, came to the forefront of the blockchain conversation during the last crypto winter 2018-2019, the idea of ​​self-sovereign identity and self-storage of information, has only become more important in recent years. By any calculation, the value of data generated by institutions represents a significant part of the total value assigned to said company; The S&P 500 has been dominated by such a shift for decades at this time. The importance of personal information, and control over this personal information, is a reality that has only recently come to the fore in policy and market discussions.

The fact that technology companies are exploiting personal data to help generate billions in profits while being relatively poor managers of that data, and as governments around the world view digital currencies and identities as a potential political tool, the trend is clear. Control over data will largely control identity; what better tool to help in this pivot than blockchain? An immutable and uncensored ledger of transactions, which can be viewed by any member at any time with full transparency, and also can be used by anyone with an internet connection, is truly a powerful tool.

NFTs are, at the core of the idea, a tool where ownership and origin can be established, connected and traced between the physical and digital worlds. Identity transcends both specific areas, so it makes sense that the future of identity will be at least partially blockchain-based.

Property. Purchases and transactions with real estate have never been presented as a particularly seamless or enjoyable process. Be it commercial or residential, real estate transactions are time consuming, involve a number of verifications and reviews, and each additional point of contact increases the cost of said transaction. Blockchain-based applications and applications are already being implemented to try to streamline at least some of these transactions, with promising results already generated. When we go back to the concept of NFTs, it also seems that real estate registers and transactions are an area where the unique nature of these instruments can be utilized effectively.

NFTs, which are unique and differentiated assets, while having the transparent, traceable and accessible properties of other blockchain-based transactions, present an almost tailored solution to problems involving property rights and insurance. Developing such an unchanging overview of ownership and origin presents a real application of NFTs that can provide savings and benefits for millions of market participants.

Health records. The health field is always complicated to discuss, but especially in the United States, the importance of quality data that is also able to be shared securely by private organizations is of paramount importance. Debates over vaccine records, vaccine passes and the associated implications of such records will be held over the next few years, but the broader point will be missed. Demographics cannot be ignored, and as the global population continues to age – requiring more medical treatment over a longer life – the importance of secure and divisible records that can be linked to an individual will only increase.

Blockchain applications already exist in healthcare, so this is not a completely new concept, but the integration of NFTs on top of existing blockchain tools is a positive step forward. Since each individual is unique, and each NFT is unique, it makes logical and business sense to connect these two data – to connect back to the evolving conversation around self-sovereign identity. Once again, this presents a unique set of circumstances where blockchain and blockchain-based applications can provide concrete benefits for both organizations and individuals.

Cryptoassets has entered a new crypto winter, and with this comes significant losses for some newer investors; this can not be discounted. That said, and as usually happens in the wake of such moves and price declines, this is also an opportunity for real and concrete use cases to come to the fore. NFTs can be seen by some as the ideal example of speculative activity, and this is certainly true in some cases, but NFTs also present an innovative approach to integrating blockchain with existing industries. NFTs are much more than cryptography, and recognizing that fact is the first step towards real investment, development and adoption.