The Real Utility Behind NFTs - Interoperability, Privacy and Efficiency
NFT’s; Are they the next big thing? Are they just a fad? Can they be more than just a picture or sound clip? Why should I even pay for these things I can download or screenshot for free? All of these questions are regularly heard by those who are involved in the crypto currency field. If we take a look at the history of NFT’s, as they are not a new concept, having been first minted/created on the 3rd of May 2014 by digital artist Kevin McCoy. This NFT was called “Quantum” and was minted on the Namecoin blockchain. The NFT “Quantum” was sold for $1.47m in June 2021. This however is not even close to the most expensive NFT ever sold. The most expensive NFT ever sold was Pak's 'The Merge' and sold for an eye watering $91.8m. This is also the record for any artwork sold publicly by a living artist. With this price tag in mind, it is no surprise that the questions fielded by those who are involved in the crypto currency field ask why they should pay for something they can get for free? The answer to this is made simple. The NFT needs to be and do more than just a picture or sound clip. It needs to have a use case or utility, once the NFT has this, it makes that shift from being “just a picture or sound clip” to something that can be integrated into everyday life. A genuine use case or utility.
Looking at NFT use cases and utilities, there are a number of areas that can utilise these to their advantage namely:
Fashion: Whilst digital fashion is not necessarily new, the way in which people access it and own it has definitely changed. In game, in metaverse and on avatar are now all places where people can buy fashion NFT’s and actually own and use them.
Metaverse: NFT’s can be used to purchase virtual land in the metaverse, and prove ownership of this land. Metaverses such as Sandbox, Axie Infinity and Decentraland are just three examples of this.
Tickets to events: An excellent way to showcase an NFT use case or utility, is through tickets to events. A challenge that many event organisers face is counterfeit tickets. As NFT’s are minted on the blockchain, they immediately solve this challenge. Once the NFT is minted, it automatically gets stored in the customers wallet, solving the issue of lost tickets, as well as being eco-friendly as there are no longer paper tickets.
Exclusive Access: A clever way of making a NFT more than simply a piece of digital art, is to give the owners of the NFT exclusive access to something that is exclusive to them, these are often called access NFTs. BAYC or Bored Ape Yacht Club is one of the most well known examples of this with the Bored Ape collection of 10 000 NFT’s on the Ethereum blockchain. Any owner of this gets access to special areas of the BAYC. Another example of this is how the band Kings of Leon used access NFTs to create better relationships with fans. Access NFTs can also be used for granting access to airdrops, exclusive opportunities, invites, exclusive experiences, and early access to events or products.
Identity: An NFT can also be used to create your single identity in the digital world. The creation of these ID NFTs to have interoperability, means that users can have a single identity across different chains/networks, creating this notion of a single identity across the metaverse and digital world.
The biggest benefits of NFTs, where they have a genuine use case or utility, is the fact that NFT’s have Interoperability, help aid in privacy and to drive efficiency. Use case or utility NFTs have so many new applications and experimental use cases that are appearing and being thought of daily. The practical possibilities of this technology are virtually endless.