Non-fungible tokens (NFTs) have challenged the way we think about ownership. Still, their rapid increase in popularity over the past couple of years may have led to some misinformation being spread about them. This article will cover the basics of NFTs and their use cases to get you up to speed.
The basics
The most well-known use for NFTs is a virtual representation of real-world items, such as a song, a video, a virtual trading card, or in-game assets. These digital goods are exchanged online using cryptocurrencies. There is practically nothing that can’t be turned into an NFT. So whatever you can imagine can eventually be represented by a non-fungible token.
The main feature of NFTs is, by definition, being non-fungible. They cannot be exchanged for a similar asset, they are unique. Physical money or digital coins such as Bitcoin, on the contrary, are fungible, as they can be swapped. NFTs are also tamper-proof assets protected by a public ledger called the blockchain. In this way, ownership of an item can always be traced back.
10 examples of Non-fungible-tokens
We have selected a list of ten uses we can give to NFTs. This is, of course, not a comprehensive list as new uses for NFTs are being discovered and put in place every single day. On the contrary, this is meant to serve as a small rundown of the most popular use cases for these types of digital assets.
NFTs as access tokens
NFT access tokens are tokens that can represent a ticket or a membership to an event. We know how exclusivity and scarcity are pivotal in the NFT community, so imagine the importance this type of NFT can reach in super-exclusive events. In this way those NFT tickets have unpredictable growth potential.
NFTs as Digital Certificates
There are plenty of ways in which NFTs can be used as digital ownership certificates to verify data of products and all kinds of real-life utility. So in this way, NFT will increase the value of the item it represents, as well as collect data about it
NFTs as Interactive Art
The interesting feature of interactive art is that collectors can collect more mass by buying more tokens. So every time an NFT from one collection is purchased, the token’s mass is merged with its existing token.
NFTs of Physical Artwork
The idea behind this type of NFT is to fractionalize the ownership of an art piece into many separate NFTs. In this way, by purchasing an NFT you can own a part of your desired piece of artwork, along with many other collectors.
NFTs of Online Avatars
The clearest way to illustrate this is via the Bored Ape Yacht example. This has been the most expensive NFT online avatar project, reaching the price of 100ETH for one avatar. When you obtain one of those avatars you become part of an exclusive community.
NFTs of Moments in Time
One of the most popular examples of NFT moments is through Sports. NFTs that represent moments in time become collectible items such as the memorabilia that every kid collects in their childhood. The main idea behind them is that because of their scarcity and uniqueness their value will increase in time.
NFTs of Gaming Items
In most NFT games the idea is that you can obtain skins and several in-game assets which are valuable and unique. Then you can exchange the NFTs you earn in different marketplaces for cryptocurrencies and eventually for real-world money. These NFT games are called play-to-earn games.
NFTs of Metaverse Real Estate
Land plots or real estate have started to multiply on the metaverse and even the real-life applications, as a result, their value started to increase.
It may sound absurd to someone from outside the NFT world, but the actual application of NFTs in the metaverse is now supported by some big companies that are buying their pieces and developing some new interactive ideas to get in touch with their audience.
For the application of these NFTs in the real life, we can say that is still in the proof of concept stage.
NFTs of Metaverse Fashion & Items
Big brands are already taking NFTs seriously. This is because digital fashion on the metaverse is becoming a potentially large market. The fashion industry has the opportunity to enter the metaverse. So users will have the opportunity to obtain exclusive pieces of virtual clothing (in some cases attached to a real piece). And add to them the inherent qualities of NFTs of being unique and scarce.
Final thoughts
It seems that non-fungible tokens are here to stay. Some of the uses NFTs may disappear as any trend, but there are still more to come. Innovation is key.
Most NFTs may look similar to childish art to somebody who is not familiar with them. On the contrary, people who are really into NFTs and their creation and exchange, know that they are more than just a JPEG or childish art. The skyrocketing prices paid for some NFTs are proof of their ever-increasing importance and presence in the market.
So as we have always done when it comes to changes, it is time to adapt to this new kind of virtual assets. In this way, everyone would be able to see the endless uses they can have.
About THEOS: The THEOS ecosystem is managed and sustained by our Association, a team of both traditional finance and blockchain virtuosos. We envision a new way of thinking, minting, and trading NFTs, and have developed what we believe is going to become the next-generation community-governed NFT platform.
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