As of writing, NFTs have mostly been used to represent digital artworks and illustrations. However, innovators continue exploring other use cases and are constantly reshaping and redefining what an NFT is. With that being said, let's take a quick look at what these different use cases are.
Currently, NFTs are heavily used in the gaming industry, particularly with the Play-to-Earn aspect, which lets players earn rewards with real-world value by completing tasks, battling other players, and progressing through levels. Here NFTs represent in-game assets such as accessories, monsters, or even tools. NFTs enable true ownership of assets and objects, giving them additional value above the normal skins you see in CS:GO or Fortnite.
Additionally, since NFTs are based on the blockchain, in-game assets represented as NFTs possess the ability to be used outside of the original game's ecosystem. Imagine using an in-game weapon in one game and then using it for another purpose in another game!
People have also started exploring building metaverses around these NFTs, such as Decentraland ($MANA) and The Sandbox ($SAND). Perhaps, the most significant movement in gaming involving NFTs here in the Philippines happened with Axie Infinity, where players compete against each other and earn cryptocurrencies in return.
NFTs allow for true ownership of cultural products such as art and music. By turning art and music into NFTs, artists can sell directly to their fans and skip past any resistance that might hinder them, such as storage costs, shipping costs, and logistics, among many others. With NFTs, artists can now truly own and monetize their work.
One example is the release of a special edition Kings of Leon album on YellowHeart - an NFT marketplace focused on connecting musicians and their fans.
In March of 2021, Kings of Leon boldly decided to release the first-ever NFT album in the music industry's history. They released the album, 'When You See Yourself' on other platforms like Spotify, iTunes, Apple Music, and Amazon, but the YellowHeart NFT version is the only one that includes enhanced media - a moving album cover, a digital download of the tracks produced, and limited-edition vinyl.
Given an NFT's ability to represent ownership of an asset, NFTs can be used to represent real estate such as land, condominiums, and houses. Using NFTs to prove ownership in place of traditional certificates dramatically reduces the risk of counterfeiting and fraud while making it easier for owners to sell, validate, and secure their properties.
Another relevant application is the fractionalization of NFTs. For example, an NFT can be used to represent a farm in Batangas. This NFT can be represented by smaller NFTs, each representing small land ownership. This opens the door to many possibilities, including making land ownership more accessible and revenue sharing among owners.
In the marketing field, people have been exploring how NFTs can help increase brand awareness, community engagement, or customer loyalty for their brands. Over the past few years, different companies have found creative ways to market their brand with NFTs.
One example is how Budweiser released NFTs, which gave access to holders to a private event with free-flowing beer, live performances, tours, and exciting giveaways. This example shows how marketers can use NFTs to provide exclusive incentives and help build a community.
As for what we can expect in the future, the technology of non-fungible tokens can benefit virtually any field that requires certifications, originality, and provenance. NFTs go beyond digital creative works and can be used for industries such as supply chain management, ticketing, and even governance.
For supply chains, information about a shipment's location, the ports it's been through, the workers who checked it, every detail about the shipment's temperature, weight, and many more can be placed in NFTs and accessible for everyone. Using NFTs can help shippers track and decongest supply lines while providing much-needed transparency for suppliers.
Tickets to concerts, conferences, and other events can be done with NFTs. Compared to the ticketing systems we have today, NFT ticketing saves many costs ranging from manpower to ticket production. The needed resources for ticketing can be creating a landing page and developing the NFTs. To add, rather than throwing a ticket away post-event, attendees can choose to keep the NFT ticket in their wallet indefinitely.
A good example of this is Coachella introducing their NFT collections along with 10 Coachella Keys NFTs that serve as lifetime VIP festival passes on the Solana blockchain in partnership with FTX. This initiative by Coachella can also be seen as one big step into the metaverse in the form of virtual music concerts and bringing digital experiences to the real world.
NFTs can also be implemented for various government recordkeeping activities. The ability of the blockchain to retain original information means counterfeiting birth certificates, insurance details, diplomas, and even passports will be virtually impossible unless the underlying blockchain gets compromised or destroyed.
One example is how San Marino utilized NFT technology to issue NFT-based Covid-19 passports back in 2021, securely and seamlessly verifying a person’s vaccination record.
Moreover, NFTs can also help record important transactions, such as equipment sales or automobiles, without worrying about these essential files being lost or altered. This improvement is a step forward in recordkeeping compared to the traditional paper and digital trails in centralized storage systems.
The various applications of NFTs are diverse and innovative, from gaming to music to real estate. In the future, it's not far-fetched to think that NFTs will continue to evolve and impact other industries.