10 Practical Uses of NFTs
Breakthroughs that will change society over the next 10 years.
Introduction
Non-Fungible-Tokens (NFTs) have finally given us a solution to prove ownership of digital assets. Having gained mass popularity in the last two years, institutions, companies, and organizations continue to adopt NFTs as a tool to raise capital. Undoubtedly, large brands, companies, and even governmental institutions see the potential in implementing blockchain technology. Tech giant Meta (a.k.a. Facebook) will soon be integrating NFTs into their platforms, and many other reputable tech companies also want a piece of the cake. NFTs became a $40 Billion Market in 2021, getting into the eyes of investors and creators. Thus far, the technology seems impressive, and there is no doubt that NFTs are a meaningful advancement in the tech industry. We have even heard market analysts project the NFT Market to hit over $230 billion in value by 2030.
The truth is… it’s still very early. Less than 1% of the world’s population owns an NFT. It’s still new territory, and most likely, NFTs will go through many trials, errors, and mistakes until the technology becomes mainstream. To put it into perspective, at the peak of the previous bull market, there were 28.6 million active wallets trading NFTs. That’s only 0.03% of the population (or less, considering that some users have multiple wallets).
NFTs are like a romantic relationship. It’s still new, and we are in the ‘rainbow and butterflies' phase. We, the NFT enthusiasts, are deeply in love with this technology's potential, and sometimes, we cannot see its ugly sides. Like in a relationship, love won’t be enough after the hype goes down and reality hits. We need a more profound reason to stay in the relationship. A reason to hold on to it, embrace it and make it part of our daily lives. The same applies to NFTs. After the hype goes down, NFTs need one valid reason to remain relevant: practical, real-life utility.
The value of an NFT is directly related to its utility (or, in other words, its primary benefit of owning it). Those few NFT projects that provide solutions to problems we encounter in our daily lives will eventually be the ones that push this technology closer to mainstream adoption.
We will experience the true potential of NFTs the moment they become a social need rather than a luxury or a hobby.
Market analysts speculate that it might take up to ten years until they become part of our day-to-day life. However, at the pace that the digital world keeps exponentially expanding, it might take way less time than that, and this technology might take off faster than you expect.
Until that moment arrives, it is important to have a macro overview of where NFTs stand today and which practical uses are attached to NFTs.
10 Practical Uses of NFTs That Will Transform our Society in the Next 10 Years
- Legal Documents & Authentication
We are a society that is becoming more paperless every day. Digital documents, digital signatures, and online receipts have become extremely popular in the last decade. Blockchain and the authenticity of legal documents are a perfect fit and have a bright future if implemented correctly. The legal documentation will become faster, more efficient, and hopefully more transparent. We saw a recent case where a U.K. Judge allowed lawsuits to be delivered via NFT Airdrop. Suppose ID documents such as passports and national identification documents become fully digital assets stored in the blockchain. In that case, it will be easily possible to link our identities to legal documents, for example, a marriage certificate in the form of NFT, which can be publicly seen by accessing your official digital ID.
2. Access Passes
Event ticketing and NFTs go together like peanut butter and jelly. Sectors such as airlines, business events, and the entertainment industry can finally rely on a secure, transparent system that provides better control over tickets, access passes, and memberships. Eventually, we will seamlessly transact tickets in the shape of NFTs by using our smartphones.
Let’s say, for example, Real Madrid, one of the largest football clubs. Their tickets are relatively expensive due to high demand, and the secondary market has a problem with scams and fake tickets. Eventually, a club like Real Madrid might offer tickets in the form of NFTs, and buyers will be able to verify their authenticity in the blockchain and avoid being scammed in secondary markets. Additionally, thanks to smart contracts, the club might set a royalty of 2% on each sale on the secondary market. This way, the club will generate an additional 2% revenue from royalties every time a ticket gets transferred to a new owner, indefinitely. This opens an entirely new revenue stream that would not be possible without NFTs.
3. Non-Transferable Tokens
NFTs that cannot be transferred from wallet to wallet have great potential in authenticating academic documents. Universities will eventually be able to grant a full academic degree in the form of NFT, which cannot be transferable to another person. Its authenticity is officially verified in the blockchain and recognized by other institutions. Perhaps eventually, we will get to see a web 3 version of Linkedin where professionals will display their educational NFTs achievements publicly.
4. Proof of Attendance
Proof of Attendance Protocol (POAP) NFT is a specific type of token that proves that you attended an event or experience in the physical or digital world. POAP NFT's primary purpose is to prove that people participated in a specific academic course, a business seminar, or even a sports marathon, to name a few examples. Eventually, proof of attendance will become a common thing. We will apply it as a requirement to attend real-life events, where people might be required to scan their digital ID on their smartphones at the entrance of events. In return, they will automatically get a certificate of attendance airdropped to their wallet, which may or may not be transferable to other people.
5. CounterFeit
One of today’s biggest problems is proving the authenticity of physical and digital assets. Counterfeiting is rising and projected to exceed $3 trillion in 2022. The tokenization of physical assets is essential for this technology's long-term success, and NFTs serve as the bridge between the physical and digital worlds. In the upcoming years, we will be able to verify if a piece of expensive jewelry is genuine or fake. Large luxury brands might implement blockchain technology in their supply chain to keep track of inventory and physical collection releases. Jewelry brands might sell their products linked with a digital certificate of ownership in the form of NFTs, and physical assets will be able to be purchased in-store with crypto wallets, and the receipts will be recorded as NFTs.
6. Identity Confirmation
Showing proof of ownership is directly linked to personal identity. An NFT publicly displays the owner of a specific asset and for how much that asset was purchased. Once the blockchain becomes the norm, intellectual property, patents, and trademarks will be linked to personal digital IDs. Currently, legal paperwork is slow, inefficient, and in many cases, very bureaucratic. Let’s use an example of real estate. Say you decide to purchase a lovely apartment. You will be able to pay the total amount in one single transaction using your cryptocurrency wallet and instantly receive the legal certificate of ownership of the property in the form of NFT. Once regulated, governments can verify that you are the actual owner of the property, and transactions will become very transparent.
7. Governing & Voting
In many countries, the voting process is inefficient, dishonest, and in some cases, corrupt. Voters must bring a photo ID and proof of residence with them when they visit the voting centers. NFTs can help eliminate this problem since they would provide a digital identity for people without physical documents that proves who they are and where they reside in the country. Having an official digital ID stored in the blockchain legally recognized by their municipality will facilitate the voting process and result in a more transparent voting system. NFTs will reduce fraud and serve as a record of those who voted and their votes.
Thanks to the blockchain, the creation of decentralized autonomous organizations (DAOS) has become very popular as a governing system. In a DAO, there is no central authority; instead, power is distributed among token holders who collectively cast votes related to a specific decision. This will become the norm to govern projects, companies, and even political parties where the direction of a project will be determined by a collective decision among the token holders of a specific organization. Looking down the line, governments might even be run as DAOs, becoming more decentralized, and the power will be distributed among selected people.
8. Logistics & Supply Chain
Logistics is about keeping track of assets, and the blockchain is the ideal solution for a fully transparent and efficient supply chain. Companies are continuously adopting NFTs to keep track of their physical inventory. Eventually, we will live in a time where product data, tracking numbers, and logistics are fully managed on the blockchain. With NFTs, companies can issue smart contracts linked to cargo and delivery services, resulting in a fully transparent and traceable record of every item in the supply chain, from raw material to end user. All this data will be essential to increasing productivity and efficiency related to logistics and transportation on a global scale.
9. Real Estate
One of the most attractive sides of Non-Fungible-Tokens is their ability to be linked to physical assets of high value, such as private and commercial real estate. One of the biggest problems we face in the real estate market is paperwork, permits, notaries, and many intermediaries such as banks and agents. There are many added costs to something that could be simplified in a single transaction between two parties. NFTs will help speed up buying or selling physical properties by making a straightforward transfer of ownership in a single transaction.
The term fractionalization will become very common in the real estate market. To understand how fractionalization work, let’s use a simple example. Say, for instance, you have decided to invest in the Real Estate market, and you want to buy a lovely villa on the beach for $1M dollars. But you don’t have enough capital, so you decide to ask four of your friends to join you and buy the villa together. The property can now be fractionalized in 5 NFTs worth $250K each (for a total of $1M). This way, you are one of the owners without needing to buy the entire house yourself. In other words, it lowered the entry cost into the real estate market, making it more accessible to others. Plus, you can buy out one of your friends in the future by purchasing their NFT, if that’s something you all agree on.
Additionally, the property can be used for rentals, generating passive income divided evenly among all token holders. All ownership and property history could be recorded in the Blockchain, which anyone can publicly verify. The possibilities for NFTs in the Real Estate market are limitless and might significantly impact the banking system in the future.
10. Gaming & In-Game Assets
The gaming industry is estimated to hold a market cap of $70 billion. That’s without the implementation of NFTs. By adding monetization and tracking of digital game assets, the gaming sector will be one of the areas where NFTs will excel in the upcoming ten years. With the integration of the Metaverse, the gaming industry might be the one that experiences the fastest adoption rates among a younger generation.
Ingame incentives such as Play-to-Earn systems are gaining traction in developing countries. Thanks to NFTs, gamers can get paid for playing games, regardless of location limitations. This opens massive opportunities for millennials in developing countries. We have seen examples where players earn around $1,500 per month on average, more than their full-time job salaries in their countries.
How to profit from NFTs in the next 5–10 years?
- Get informed. There are many lessons to be learned before the technology is widely adopted, and we are still figuring out the best uses of NFTs. Learning and exploring new topics during the initial phases of new technology will pay off in the long run. One way to make sure you profit from the technology in the upcoming years is to get informed and stay up to date with what’s happening in the market. Twitter is an excellent tool for following current market trends. Or you can also follow us at Flagship DeFi, and we’ll ensure you stay up to date with the most relevant information (wink).
- Try things out to gain experience. As the blockchain matures, people who have experience, and have previously proven to know how to adapt and improve, will dominate the top positions in web 3 companies. Experience will become extremely valuable in the NFT space. Now that we are still in the early years of this technology, it is the right time to learn before it becomes mainstream and you lose competitive advantage.
- Launch your very own collection. Seriously. The best way to learn is by doing. Launching a personal collection will teach you many valuable lessons about understanding NFTs. You can start by opening an account in OpenSea.io, uploading a collection of a few of your favorite photos, and making them NFTs. It’s a straightforward way to get familiar with the basics of NFTs and will help you see their potential uses. The lessons learned might one day pay off when that excellent business idea pops your mind!
- Join a team. Being part of a web 3 company will change your understanding of how these companies handle internal operations. You will learn relevant work tools in the industry and, most importantly, it will put you in a surrounding with talented people causing you to learn many new skills from others which will broaden your horizon.
To sum things up…
NFTs still have a long way to go, and there is plenty of room for growth before they are mainstream adopted and become part of our everyday life. We will only see the true potential of NFTs once their utilities have real-life practical uses, which have a vital purpose and a social requirement in society. Until then, we must undergo lots of development, hard work, sweat, and tears. But eventually, it will pay off to be early.
That’s all for this week’s publication!
About Flagship
Here at Flagship DeFi, we love to keep you updated with the best news and stories in the crypto-verse. Make sure to join our Discord and follow us on Twitter; this way, you will stay ahead of anyone else regarding crypto news, stories, and market updates. And it’s 100% Free!
Stay safe, and see you next time!
