The Rise of NFTs: Exploring the Use Cases Beyond the Art Industry
Non-fungible tokens will surely go down in the history books of the cryptocurrency saga. Despite marking its powerful comeback in 2021, this mania still bears the strong scent of the crowdfunding trend.
A considerable amount of time has gone after the insane popularity of CryptoKittens Dapps that managed to take down the whole Ethereum network back in the day. The new market development spiral can ring the bell again and attract more sharks due to the tremendous growth of the crypto market over the last year.
With Bitcoin and Ethereum seeing major gains in short timeframes, a gateway to new opportunities opened for those willing to capitalize on the digital art euphoria. When the hopes of many will turn into dust and ashes of the burned-out expectations, what will stay?
Before it Went Mainstream
The new record-breaking deals changed the global paradigm. These latest purchases demonstrated that digitized art could be worth not thousands but millions, stepping toe to toe with traditional collectibles.
With the screaming headlines of the new incredible price tags for some NFTs or rare digital artwork sold for 6-digit figures, the whole space is now dominated by mania. Every artist and creative mind wants a share of the cryptocurrency slice. The Initial Coin Offering frenzy, as the dotcom bubble a few decades ago, has outlined that hype doesn’t last forever.
Most people associate NFTs with Ethereum’s ERC-721 token standard. However, the initial story started back in 2015 when non-fungible tokens were launched on top of Bitcoin using counterparty, an L2 solution for Bitcoin.
Some games used to mint NFT trading cards before the global euphoria hit. There is no wonder that non-fungible tokens finally gained international popularity since many people play games and have a particular passion for collecting things. Combined with the rising global interest in new technology, the NFT community started to grow like a wildfire.
What defines the price in the industry where NFTs are currently booming? The importance and influence of art on humanity can’t be measured, but the market is all about numbers.
In the end, it all boils down to people willing to pay astounding figures for anything they see as valuable — a thing that can be worthless to others. But the market dictates the rules of the game. The total value of NFT transactions reached $250 million last year, and such things incentivize others to follow.
It’s evident that the real potential of the NFT field lies beyond the speculative gains. The blockchain offers many disrupting options, but the actual value of the technology started to unravel only after the market began to mature.
First of all, NFT should not be correlated only with the art industry. The potential use cases go far beyond. The token standard can be used for music rights, access to websites, or tokenization of real-world assets: medical history, passports, company management shares, and real estate.
Evaluating the Issues
New technologies are praised for more than just innovation. Advancement often goes hand in hand with hazard. For example, the world’s ecology suffers as a substantial amount of electricity is needed to produce each NFT. Blockchain networks run around the clock and consume a lot of electricity, increasing carbon dioxide emissions. Eco-activists believe this technology brings global warming closer, and the ecological footprint is not a joke.
Scams, rug pulls, and bubbles are becoming commonplace at such ventures where a fast buck can be earned. After the hype surrounding the sale and purchase of crypto art, scammers have grossly entered the space.
A New Look at NFT Ownership
After the NFT hysteria in the art space is over, this market segment can make a turn in a different direction, and it’s worth researching in advance. Many areas can implement non-fungible tokens and benefit from their acceptance.
The music industry could see it as a natural fit. Investors who buy the NFTs of specific platforms may receive a share of the streaming revenue generated by the songs. The opportunity to monetize creative works through NFTs will continue to be a large part of space one way or another. It can also take the form of copyright ownership, royalty sharing, and licensing.
Moreover, such tokens can permanently change the system in which digital content copyrights work and protect crypto paintings and videos from illegal copying. Speaking of the business side, NFTs can also smoothen the burden of copyright for musicians and allow streaming services to license films and series more quickly. And it doesn’t just end in the creative space. Other possible use cases include insurance policies being sold as NFTs, representing ownership of any digital asset or domain addresses.
There are ideas on how to use NFT mechanics for project management in particular. Platforms like STEX plan to implement such tokens for boards of directors, which is a unique use case.
For example, it can be made that such a promotion can only happen after the transfer of an NFT to another, and this carries serious business opportunities.