What are NFTs Used For?
Non-fungible tokens (NFTs) continue to play a constructive role in the growth and adoption of the crypto market, helping shape the future of decentralization, ownership, finance, and more.
While some believe that NFTs are nothing more than “JPEG”, the reality is that innovation within the NFT ecosystem goes far beyond art or even collectibles. Appealing to our innate desire for social status and longing for community, NFTs are the building blocks of a new way of interacting both online and in the physical world.
So, what are NFTs used for? What are some applications of this innovation?
NFT Applications: What Are NFTs Used For?
The use cases of NFTs range from verifying authenticity to art and even applications in business. Here are some examples:
1. NFT Usage in Art
While most NFTs aren’t known for looking “cool,” at least in the traditional sense, they’re a great way for artists to make a living from their art and build a loyal fan base while doing it.
Having the addition of a smart contract attached to a piece of art is a great way to add some functionality to something purely aesthetic. Earning money from initial sales and all the royalties that come from future sales is every artist’s dream come true.
Of course, they’ll have to maintain the value of their art through community building, social media, and continued growth to maintain its perceived value, so it’s not exactly what I’d call “passive income,” but, new, what is.
Even though NFT projects continue to see adoption and traction in 2022, the landscape will inevitably continue to change.
2. Verify Authencity of Digital Items
NFTs can be used to represent ownership of digital assets such as art, music, or video. The core idea is that NFTs can be used to certify that a certain digital asset is original and has been verified by the creator. This would help reduce piracy and ensure creators are properly compensated for their work.
3. Tokenization of Real-World Items
One of the most common uses of NFTs is as digital representations of real-world elements, and in an increasingly digitized world, this technology is a logical next step. From real estate listings to music albums to smart contracts that help manage the real world
The use of NFTs would enable the scalable use of trustless secondary markets in many service industries.
4. Loyalty Points
Another interesting use case for NFTs is loyalty points or rewards. For example, a company could issue NFTs that can be redeemed for discounts or special offers. This would give customers an incentive to continue using the company’s products or services.
5. Digital Identities and Credentials
Decentralized Identifiers, or DIDs, are some of the most common uses of NFTs. Individuals, organizations, and any other entity can solidify their identities and prevent fraud through their transactions on the Web 3 through the use of NFT.
Digital IDs are at the heart of the future of the internet, and blockchain-enabled NFTs are the best way to do it. Imagine being able to pay taxes, order goods, renew your license and manage subscriptions, and much more, all with an unhackable verification method.
Your medical health life will also be easier with the advent of NFTs. Physicians can now issue NFT birth certificates at birth, and that NFT would represent the lifetime identity they can use for all of their medical records. Medical professionals can access this information when needed, such as when blood typing and
Academia may be among the best real-world uses of NFT, with the same applications as medical records, except it would be used during job applications, certification, and proof of college or school attendance.
6. NFTs as Utility Tokens
NFTs can be used as utility tokens. For example, an NFT could represent a key that unlocks access to a certain service or content. This would allow content creators to monetize their work in a new way.
7. NFT Usage in Gaming
Perhaps the most practical use for today’s NFT scene, which is still in its infancy, digital collectibles such as those from “Play-to-Earn games” like Axie Infinity, are a common use case. NFTs are perfect for the gaming industry.
With the digital ID model, players can use NFTs to verify their winnings and secure them in video games.
Since NFT items in games can come in varying degrees of rarity, NFTs simplify trading in games, which can also increase value. Due to the absence of an intermediary and the instant nature of blockchain transactions, NFT owners will not have to worry about fraud and scams.
This creates more opportunities than ever before, including the ability to purchase weapons or other equipment that has already been tested by real users and for both buyers and sellers to benefit from.
Enabling Cross-Platform Support for NFT Gamers are more motivated to continue playing a game if they already own characters or items within it, thanks to NFTs, which give game developers another opportunity to grow their brand and generate revenue.
8. NFT Usage in Supply Chains
Many goods and items, particularly those in the food industry, have problems verifying their provenance, packaging content, and source of supply. NFTs can be linked to a product through the blockchain, giving it a tamper-proof NFT identity.
Businesses can also find many convenient uses for NFTs to track their items from production to shipping and delivery to the end of the pipeline. Customers can see what they are paying for and a company’s supply chain remains transparent.
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