NFTs: Looking Beyond the Hype to Future Use-Cases
Non-Fungible Tokens, or NFTs, have blown up in popularity over the past year. In fact, they are one of the most well-known uses of blockchain technology and have been promoted by celebrities and news sites alike. However, most modern NFTs are simply pieces of art or randomly-generated images and have little to no real use case, leading to criticism. Let’s look at some of the possible use-cases of NFTs that are truly useful and will help bring blockchain to everyone.
NFTs are a highly controversial subject, mainly due to their public perception. Proponents of modern NFTs state that they are art pieces with serious real-world value and have the potential to keep accruing value. On the other hand, many more people see NFTs as a fad with incredibly inflated prices and little-to-no utility. For the most part, NFT dissenters are correct, as NFTs appear to be in a bubble and artistic NFTs have seen a significant drop in value and engagement over the past few months.
Contrary to popular opinion, NFTs have much more potential than simply being a way to own digital art. Let’s take a look at a few of these revolutionary use-cases and see why there is much more to NFTs than meets the eye, and how they can be used to combat fraud, increase transparency, and strengthen security.
The first example is with title deeds. Right now, the system for buying, selling, and transferring is very antiquated. Let’s say, for example, you choose to buy a house. As soon as you and the buyer agree on a price, an escrow process starts. When this happens, you essentially lock up the funds that you’re using to buy the house in an escrow account, and all of the other activities related to the transfer, such as final walkthroughs, insurance buying, and inspections take place.
In the meantime, this money is sitting idle in a bank account, earning interest for the bank or possibly costing you interest if the bank sees the escrow account as a service they’re providing.
Only after this whole process is done, which can take as long as two months, do you get your hands on the house and the buyer gets the money.
Using blockchain, title deeds could be minted as NFTs by a government municipality, and be the piece of data that proves that you own a house. When you want to transfer it to another person, you can go through a blockchain-based escrow process, which is exponentially cheaper and more efficient. Additionally, using DeFi lending and borrowing platforms like Aave, homebuyers could make money during the escrow process by depositing funds in a decentralized money market.
Recently, Alfa Romeo announced that one of their new SUVs would come with an NFT, that will record data related to the car over time. This will include lots of important information, such as maintenance records, ownership information, and much more information from the car’s system.
This essentially creates a decentralized version of CarFax and creates a full record of all information relating to the car. This is more trustless, transparent, and efficient than something like CarFax. It also reduces, if not removes, the risk of fraud coming from people faking the odometer or other measurements.
NFTs will also solve lots of problems relating to fraudulent identification. The reason that fake identifications work so well today is that there’s no true database that allows people to look up an ID.
However, if governments issued IDs as an NFT on a blockchain, they could be provably verifiable with very little work. All one has to see is that a certain person owns a certain Ethereum wallet and that the government sent them an NFT with their date of birth and photo on it. It is nearly fool-proof in its verification.
Finally, there is a benefit in the healthcare space for NFTs, such as with prescriptions. Modern prescriptions are rife with fraud and corruption, and there are issues with counterfeit scripts. If prescriptions were issued as an NFT by a doctor, then a user would have full control over their prescription while still having a provably legitimate script. This would essentially allow people to own their healthcare information and use it in any way they want, giving complete flexibility and security to the system.
Even though the NFT market is currently overhyped and misunderstood, there is massive potential in the near future for NFTs to become commonplace in everyday life.
By Lincoln Murr