Recently, Non-fungible tokens (NFTs) have become commonplace in the crypto market, with an impressive trading volume of over $23 billion in 2021.
This goes to show how much investors have embraced this technological advancement, with earning potential skyrocketing far more than crypto holdings.
Last year, it was reported that a collage of digital images sold by Beeple’s “The First 5000 Days” made history as the largest NFT ever sold for a ridiculous price of 38,525 ETH, which, as at the time, was worth $69 million.
Other than this NFT, there have been others that have sold for millions of dollars, from celebrities to average individuals.
Despite this, the concept of NFT is still not well understood in some parts of the world, as some people do not know what it is or what role it plays in the grand scheme of things.
Critics have their opinions about NFTs, as some say that these are just one-hit wonders in the crypto market and that given time, they will fade off into oblivion.
Others want to truly understand if these NFTs hold values other than what the media is projecting today.
What truly is an NFT, then?
According to CNN Business, NFTs are tokens that transform digital works of art and other collectables into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.
The blockchain itself is the foundation on which these NFTs and cryptocurrencies are built. The term “non-fungible” means that each token is unique in its own right and cannot be duplicated.
Also, a lot of things can be made into NFTs because these tokens are simple digital representations, which means NFTs could be not just pictures, but music, games, videos, and even tweets.
This was shown recently when the former CEO of Twitter, Jack Dorsey, sold his first-ever tweet as an NFT and made $2.9 million from it.
Does this mean that NFTs are the same as cryptocurrencies?
While they do have some similarities, such as the fact that they both make use of blockchain technology, they are not necessarily the same concepts.
Cryptocurrencies are digital currencies that can be traded in the crypto market, used to purchase and sell items in a real-world setting, and are not regulated by any financial institution like regular fiat.
On the other hand, NFTs are simply digital representations of a wide variety of concepts, ranging from art to music to memes, games, and much more. They cannot be used to trade and, therefore, cannot be exchanged.
Now to the main question of the day:
Are there other possibilities for NFTs beyond just digital art?
It comes as no surprise how much of a contribution NFTs have made to the world of digital arts, but there are other areas where NFTs can be of major benefit that are not being talked about. Let us take a look at some of them:
One aspect where NFTs can come in handy is the aspect of accessibility. Since NFTs are known for their uniqueness, in part due to the blockchain, they could play a crucial role in serving as digital tickets for entry or access to events or even trains and buses.
Since these NFTs can be tracked by the blockchain, making use of them this way can reduce a lot of errors or displacements that occur with physical access cards or tickets.
Also, these NFTs, because of the existence of smart contracts, have digital flexibility as they can be modified to cater to certain policies such as expiry dates, terms and conditions, and others as deemed necessary, storing needed information in the process.
The goal of every new invention or technology is to make life easier and to abolish old ways of carrying out activities. The same can be said for NFTs in this case.
Rather than the usual traditional loans, where individuals are required to go to banks and fill out forms, wasting precious time and resources in the process, NFT-based loans can fill this role.
Since NFTs can be tracked by the blockchain, an NFT-based loan can be tracked and monitored once issued.
If the borrower refuses to repay, they can simply return the NFT and the process begins again without the need for a third party.
This now introduces the concept of peer-to-peer transactions, reducing time wastage, becoming more transparent and reducing fees to the lowest.
This is still centered on NFT tracking and monitoring, as mentioned earlier. In the transportation business, NFTs can be used with products traveling large distances.
Since NFTs can be tracked and monitored by a blockchain, these goods can easily be tracked and monitored till they get to their destination.
NFts could even be used to determine the point of origin and entry of these goods. For example, with the implementation of NFT, one can tell where a pair of shirts were made, what year they were made, their storage location, and where they are headed for final distribution.
These are some of the things NFTs can do, and companies such as IBM and MAERSK are already leading the way in this aspect.
With the use of NFTs, every human on the planet can have a unique ID or code assigned to him/her. This makes it easy to easily access a person’s profile by simply keying in the person’s digital ID.
It will also help to greatly reduce crime rates as, due to the tracking feature of NFTs, criminals can be easily tracked wherever they are in the world and their exact location can be gotten instantly.
Other ways an NFT digital ID can come into play are in the event of travel. With this, this digital ID can easily take the place of a passport as there would be no need for a physical passport for identification before boarding.
This and many more are some of the things NFTs can achieve as the digital world is filled with endless possibilities and it will only be a matter of time before mankind embraces this potential.