NFTs are not just for art. Will more uses emerge?
Some believe the hype around million-dollar NFT art and digital collectibles is warranted, with new use cases for NFTs soon to emerge.
What is an NFT?
Non-Fungible token. Well that did not make it any clearer, “Non-Fungible” more or less means that it’s unique and can’t be replaced with something else, e.g. a Bitcoin is fungible however a “One-of-a-kind” trading card is non-fungible
How do NFTs work?
At a very high level, most of the NFTs are part of the ETH blockchain. Ethereum (ETH) is the second-largest cryptocurrency, the only difference is, its blockchain is built in such a manner that it supports these NFTs.
The world of art is not the only industry to be enjoying the fruits of NFTs’ popularity. Various sporting icons, brands and teams have entered the fray by minting trading cards and digital memorabilia, that have also attracted million-dollar bids from sport-loving NFT collectors. Apart from sport, digitally-signed tweets are also becoming a popular NFT. Twitter CEO and co-founder Jack Dorsey recently sold a tokenized version of his hand and the platform’s first-ever tweet for $2.9 million.
Do all the art pieces being sold bring value to the industry?
Some commentators, even outside the central crypto community, are starting to question the price tags of NFT art pieces, such as the single red pixel that was up for sale for $900,000. Nonfungible tokens have taken the cryptocurrency space by storm in 2021, as various forms of digital collectibles have attracted multi-million-dollar price tags. But are there more fruitful use cases for the burgeoning space than just selling NFTs as art?
A single red pixel selling as an NFT for $900,000. Hm. Right. Got it. pic.twitter.com/OM9DidPbA0
— Marques Brownlee (@MKBHD) March 25, 2021
As these extensive values for various NFTs continue to astound onlookers, it begs the question of whether the prices being paid for digital collectibles are creating hype that takes away from other potentially more beneficial use cases for the NFT space.
“NFTs as art will continue to gain adoption. Certain types of contracts, in-game assets and tickets will also be constructed within an NFT structure. We are just at the beginning of experimenting with all of the various forms NFTs can take and what they represent.”
Better use cases for NFTs will reveal themselves…
While NFT art and various digital collectibles continue to make headlines, it seems the progression for more use cases will be explored and developed in the coming months and years. NFTs could eventually make their way into various industries. Gaming and tokenization of in-game assets have already emerged as notable use cases, while NFTs also have the potential to be used in the insurance space, as well as for securitization and asset-backed lending.
