Some people thought that non-fungible tokens (NFTs) will have the same fate as the earlier trends and hype in the web 3.0 space. But many believe that it is here to stay and will revolutionize the way we own assets. NFTs have gone a long way when it comes to innovation — what started as an auction of digital art works has now expanded to even owning virtual land titles that appreciates in value, just like a typical land property.
The reason behind its maintained popularity is its continuous innovation. The NFT technology has far more versatile and practical applications beyond just digital art. Here are some of the most promising real world use cases for NFTs:
Authenticating Physical Items
NFTs can be used to authenticate ownership and provenance of physical assets, from luxury items to real estate. An NFT tied to a physical asset validates its authenticity and traceability through changes in ownership. This helps tackle counterfeiting and makes transferring ownership more efficient.
- Luxury brands like LVMH have used NFTs to authenticate luxury handbags and prove their scarcity.
- NFTs can be linked to a deed or title for a property, making home sales quicker and more secure.
Securing Identity and Credentials
NFTs can store verifiable credentials like academic certificates, professional licenses, and digital IDs that can be easily verified. This allows individuals to quickly and securely prove credentials.
- Estonia uses NFTs to provide digital IDs to citizens that serve as official identification.
- NFT driver's licenses are being piloted to be used in digital wallets.
Fan Engagement for Sports Teams
Sports teams like the NBA's Golden State Warriors are using NFTs of collectible moments and artwork to engage with fans. The scarcity mimics collectible physical merchandise.
- Fans have bought millions worth of NBA Top Shot NFTs of basketball video highlight clips.
- Sports teams earn revenue from initial sales and royalties when NFT collectibles are resold.
Securing Supply Chains
NFTs can track products through supply chains, ensuring authenticity and origin. This benefits consumers and prevents counterfeits.
- VeChain uses NFTs to assign unique identities to luxury products so consumers can validate authenticity.
- Walmart uses NFTs to trace foods like lettuce from farm to store shelf.
Gaming Assets and Collectibles
NFTs are used extensively in blockchain-based games as unique in-game assets that players truly own. These can be collectible items or unlock game content and abilities.
- Players purchase in-game NFT accessories, skins, vehicles, lands, and more on games like Axie Infinity.
- When integrated with decentralized finance, NFTs can earn yield for owners when staked in-game.
The use cases above demonstrate that NFT technology extends far beyond just profile picture collections and digital artwork. Practical applications are rapidly emerging in identity, product authentication, fan engagement, gaming, and more. While the technology is still evolving, NFTs are transitioning to solve real-world challenges across industries.