An NFT is a Non-Fungible Token (a one-of-a-kind digital token), which many people regard as a certificate of authenticity, or a deed or evidence that you have the right to show the aforementioned art on your wall or in your wallet (digital wallet). It may provide you ownership of the copy you purchased, but not necessarily ownership of the original artwork. Unless otherwise specified in the contract, the creator automatically retains the copyright. In any case, non-fungible implies ‘irreplaceable,’ since each token is unique. And ‘unique’ produces scarcity, which raises the market value of NFTs.
NFTs have received a lot of interest in the area of art and entertainment. However, with the rise of Web3 and the Metaverse, rising consumer demand for virtual assets, and a move toward the concept of digital ownership, NFTs find a use case that is beyond just art. We’re beginning to see it grow into music, entertainment, sports, and live events, providing value and usefulness that goes beyond just being a digital collection. While the technology is still in its early phases, possible real-world uses for NFTs might include:
• Ensuring authenticity and transparency: Imagine a future in which you can scan a QR code on a product you purchased online and witness its supply chain history. With further instruments, you can look around for data about carbon credits and even donate directly to the families of the workers.
• Real estate: NFTs may be used to transfer land titles, establish evidence of ownership, and even monitor property value fluctuations over time. The fractional ownership model is already being piloted by several startups across different geographies.
• Verified Vehicle History: NFTs have the potential to be the auto industry’s answer to manipulated car history records. By incorporating NFTs and blockchain technology into their automobiles, future purchasers will have complete transparency into a vehicle’s past and will be able to make a more confident used car purchase.
• Ticketing: NFTs can address concerns of fraud in ticketing, whether for concerts, sports events, or airline tickets.
Why (and how) NFTs hold value:
IP: NFTs often provide the possessor with a set of privileges. Common NFT rights include the ability to exhibit or edit art, get access to unique content, and transfer or sell your rights. This adds value to holders who can create an online presence around the art, potentially increasing the value of the underlying art and any linked NFT collection.
Communities: To attract members to a community, you must first create a compelling value offer. If you do this well, you will create a tribe of brand ambassadors and champions who will promote the value of your collection to their network of prospective consumers and dedicated followers.
Exclusivity: NFTs are unique. As a result, they are ideal for highlighting characteristics that are unique to their owners. NFTs, for example, may be used to determine who has access to particular areas of a property (clubs? or even a portion of any website). In other words, they may act similarly to a membership card.
Underwriting: Underwriting is the procedure through which a person or organization assumes the financial risk in exchange for a fee, thereby storing value for an interesting upcoming project. You will be able to pick whatever NFT collection you want to insure as an underwriter by putting ETH into that collection’s unique underwriting pool.
