What is the real potential of an NFT? No, it’s not art.
Why are we still obsessing over NFTs in relation to art?
Sure, it presents a good use case. It’s what put NFTs on the mainstream map. It deserves credit for that. You could argue that other than ‘crypto’, ‘NFT’ is probably the most known word to the everyday person. With widespread user adoption lacking in Web3 that can only be a good thing.
However, while the hype surrounding NFTs has reached astronomical heights (you just need to attend NFT.NYC to see that) so have the scams, manipulation, and fraudulent activity. OpenSea recently disclosed that 80% of the digital art minted turned out to be spam or fraudulent. So while we have the exposure, I think it’s time we turn our attention to the really exciting applications of NFTs, not those that are just giving Web3 a bad name.
The beauty of NFTs lies in their ability to represent digital assets on a blockchain, ensuring ownership, provenance, and scarcity.
Take intellectual property rights and licensing, for instance. NFTs can empower creators by giving them control over their work and the chance to monetize it more effectively. Imagine musicians tokenizing their songs and selling NFTs representing royalty rights. This would allow fans to purchase a share of future royalties and provide artists with upfront funding. The same concept could be applied to licensing rights, making it simpler for brands and individuals to track and enforce agreements.
What about real estate and property rights? By tokenizing real estate assets as NFTs, we can streamline the buying, selling, and management of property rights. NFTs can offer fractional ownership of a property, allowing investors to buy a share of a real estate asset without complex legal agreements. This democratizes access to real estate investments and creates a more liquid market for property transactions.
Gaming and virtual worlds are also ripe for disruption by NFTs. In-game assets like skins, weapons, and other virtual goods can be tokenized as NFTs, enabling players to own, trade, and monetize their digital assets. This creates new revenue streams for players and fosters cross-platform interoperability and a thriving secondary market for digital goods.
Another interesting application of NFTs is in the realm of identity and credential verification. NFTs can represent digital identities and credentials, providing a secure and tamper-proof way to verify qualifications or memberships. Universities could issue NFTs for degrees or certificates, making it quick and easy for employers to verify an applicant’s credentials. Membership-based organizations can also use NFTs to manage access and privileges, ensuring that credentials are difficult to forge or misuse.
Ethiopia’s Education Minister has confirmed that the government is collaborating with IOHK, the company responsible for the Cardano protocol, to develop a blockchain-based system for monitoring student performance in Ethiopian schools. IOHK’s Atala PRISM identity solution will be used to create secure, unalterable records of educational achievements for 3,500 schools, 5 million students, and 750,000 teachers. This will help identify areas and reasons for under-performance and enable better distribution of educational resources. The goal is to give all students blockchain-verified digital qualifications, which will minimize fake university and job applications. It will also improve social mobility by allowing employers to confirm applicants’ grades directly, without the need for third-party agencies.
Lastly, let’s explore how NFTs can impact supply chain and provenance tracking. By representing each stage of a product’s journey as an NFT, consumers can access a detailed and verifiable record of a product’s origin, production process, and distribution. This empowers consumers to make informed choices and encourages businesses to maintain ethical and sustainable practices. Companies like Provenance are making strides here.
While digital art has been the most visible application of NFTs so far, their real value lies in their potential to revolutionize a wide range of industries. From intellectual property rights to supply chain tracking, NFTs offer innovative solutions that can create new opportunities and transform how we interact with digital and physical assets. As we move forward, I’m excited to see how NFTs will reshape our world in ways we’re only just beginning to imagine. Let’s just say thanks to the art world for spreading the word but let’s move on to more interesting applications.
