NFTs are making headlines left, right, and today while they have gradually become one of the most exciting blockchain-based innovations in 2022, even though they were initially launched back in 2015.
You might have heard about NFTs when the artist Grimes received around $6 million for her digital artwork or when Elon Musk’s tweet was valued at $1 million. But, if you’re flabbergasted by NFTs and how they have the potential to change the future of business, we cover everything you need to know and more below.
NFTs are not similar to cryptocurrencies, even though they are both based on the blockchain network. They are designed for a completely different purpose. NFTs are non-fungible assets which are created to prove ownership over certain items in the real world. The items can range from digital artwork, video games, music videos, songs, and articles, to name a few.
Because they are non-fungible assets, each NFT is original and can’t be replaced with anything else. This is another huge difference between cryptocurrencies and NFTs since virtual currencies are meant to operate as payment options.
Also, another advantage is that anyone can create an NFT. It doesn’t matter whether you are an artist, content creator or a small business. The decentralised NFT marketplace gives everyone a chance to participate.
NFTs and Art Collection
NFTs are mainly associated with the fine art collection market since the most successful NFTs so far are represented by some type of artwork. They provide a unique opportunity for artists and fans to directly get in touch and for the audience to support the artists by purchasing an NFT or a fraction of the NFTs. Some of the most famous artworks that have been sold so far include – The First 5000 Days, which sold for $69.3 million, CryptoPunk #5822 for $23.7 million, and The Clock NFT for $52.7 million, among many other pieces.
When it comes to the entertainment industry, again, this could be really useful for preventing videos or films, or songs from being distributed without owners’ permission. Some successful examples include CROSSROAD by Beeple sold for $6.6 million, “Earth” and “Mars” by Grimes for $5.18 million and “Charlie Bit Me” viral video for $760,999 in May 2021.
NFTs and Supply Chain
Blockchain-based solutions, in general, can be used to provide better transparency and traceability of the products and services in the supply chain but also they can also be equally useful in this department because NFTs are able to show records about the piece, including how many times it was sold and to whom.
So, they can become a valuable addition to blockchain-based solutions in the supply chain network since each NFT is unique, irreplaceable, and can offer up-to-date information about the products in the network. Actually, each product can have its own NFT that will include information on its origin, condition, current ownership, location, etc.
NFTs in Real Estate
Since NFTs are created to prove the ownership or the status of certain items, you can also find real-world applications in the real estate sector. For example, in 2021, in Ukraine, a property was sold through NFTs as soon as certain conditions were fulfilled. So, there is definitely potential for this market to directly connect buyers and sellers and complete certain purchases.
NFTS for Identification
As each NFT is totally unique, it can be used to prove the ownership of certain documents and to verify the identity of the users. This could be really beneficial for businesses that need to fulfil Know Your Customer verification processes in order to allow new users to shop on their platforms or to use their services.
It will simplify the process and make it easier for both parties to engage in the platform. Similarly, it can be used in the public sector to protect the identity of the patients and make it easier to safely transfer the data between sectors.
In conclusion, NFTs represent a great technological innovation which can be applied to a variety of sectors, including the entertainment industry and fine art collection, but they also have the capacity to revolutionise other industries like tourism, real estate, and supply chain management, and many other sectors. It’s safe to say that in the future, NFTs will become wildly used.
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