Even though they didn’t debut until 2015, NFTs have quickly become one of the most exciting blockchain-based innovations of 2022. When digital artist Grimes was paid around $6 million or Elon Musk’s tweet was valued at $1 million, you might have heard of NFTs. If you’re still baffled by NFTs and how they could revolutionize the business world, don’t worry; we’ve got you covered.
Although both NFTs and cryptocurrencies are built on the blockchain, they are very different from one another. They serve an entirely different function than what was initially intended. Non-fungible tokens (NFTs) are digitized representations of physical assets. Digital works include anything from paintings and sculptures to games and music videos to articles and essays. Each NFT is unique and cannot be exchanged for another because they are non-fungible assets. Cryptocurrencies are designed to be used as a medium of exchange, so this is yet another critical distinction between them and NFTs. It’s another plus that anyone can make NFTs. Whether you are an individual content creator or a startup company makes no difference. Due to its decentralized nature, the NFT market is open to anyone interested in participating.
NFTs and Art Collection
Since the most valuable NFTs to date are depicted in works of art, the fine art collecting community often associates NFTs with this sector. They offer a one-of-a-kind chance for fans and musicians to connect personally and show their support for the musicians by purchasing an NFT or a portion of the NFTs. The First 5000 Days, which sold for $69.3 million, CryptoPunk #5822, which sold for $23.7 million, and The Clock NFT, which sold for $52.7 million, are just a few of the most well-known works of art that have been sold so far. Again, this could be very useful in the entertainment industry to stop the illegal distribution of videos, movies, or songs. The viral video “Charlie Bit Me” sold for $760,999 in May 2021, while “Earth” and “Mars” by Grimes went for $5.18 million each.
NFTs and Supply Chain
Since each NFT is one of a kind, irreplaceable, and able to provide the most up-to-date details about the products in the supply chain network, they can be an invaluable addition to blockchain-based solutions. It is possible to create an NFT for every product that details its history, state, current owner, whereabouts, etc. The NFT’s ability to display records about the piece, such as how many times it was sold and to whom, makes blockchain-based solutions useful not only in this but in many other areas, including improving transparency and traceability of products and services throughout the supply chain.
NFTs in Real Estate
The real estate industry is an excellent example of how NFTs can be used in the real world, as they were initially conceived to verify assets’ ownership or authenticity. Real estate in Ukraine, for instance, was sold via NFTs in 2021 after specific requirements were met. Accordingly, this market may serve as a platform for direct connections between buyers and sellers, facilitating the consummation of certain transactions.
NFTS for Identification
Because each NFT is one-of-a-kind, it can be used to verify the user’s identity and establish that they are the rightful owner of a specific document. This has the potential to be extremely useful for companies that implement rigorous Know Your Customer verification procedures before letting new users shop on their sites or make use of their services. It’ll streamline everything and make using the platform easier for everyone involved. Similar applications exist in the public sector, where they can conceal patients’ identities while facilitating the transfer of sensitive information between departments.
In conclusion, NFTs are an impressive technological advancement with numerous potential applications beyond the entertainment and art-collecting industries. These include the travel, real estate, and supply chain management sectors. It’s a safe bet that NFTs will see widespread adoption soon.