Why the Future of NFTs Goes Far Beyond Gaming and Digital Art Work
Authored by Leighton Emmons, co-founder of Blockchain Boys Club
The use cases for NFTs go far beyond gaming and digital art.
Yes, it’s true that CryptoPunks are selling for millions of dollars, Fidenzas are turning into timeless classics that collectors are going to hold for years, and Axie Infinity is giving people in developing countries full-time jobs through play-to-earn mechanisms that reward players more than they reward game publishers.
But the future of NFTs and their applications are much bigger and brighter than gaming and art. NFTs can represent proof of ownership, manage licensing, provide social status, grant exclusive access and certify authenticity.
Here are some of the use cases for NFTs that I don’t think people talk about enough.
Managing licensing for photography
As someone who works with a startup in the online photography website/storage space, I am most excited about the future application of NFTs to photography.
The current photography business is rife with problems. Photographers upload their photos to stock photo sites like Shutterstock or iStockPhoto. But users of these sites often use these photos in ways that violate the copyright and licensing of the photos.
There is also another problem that plagues these platforms and the photographers that use them. If a user purchases a photo license but then shares the photo with a second person, it can be difficult to prove that this second copy of the photo is unlicensed and therefore copyright infringing.
However, NFTs can help solve this problem. In the future, a photographer or photography site will be able to mint a new NFT for each user that licenses a particular photo. Any user will then be able to prove that they own the license by simply signing a transaction using their wallet.
A user will even be able to transfer their license to another person if they wish, as long as they are willing to no longer use the photo themselves. Without NFTs, this kind of license transferability would require photography sites to do extensive tracking of customers using a centralized database. That concept is costly and would probably be unpopular with users.
But with NFTs, tracking license transfers can be done entirely on the blockchain, reducing the amount of time needed for a photography site to keep the feature working.
Managing licensing and royalties for Music
Another so far untapped application for NFTs is the licensing of digital music.
In the past, consumers bought music on CDs and permanently owned them. If a person got tired of a particular CD, they could resell the physical copy to someone else. CDs were seen as collectibles with values that went beyond the music contained within them. They contained liner notes and images that would be lost to the owner even if they were to copy the music before reselling it.
But since the rise of Spotify, Apple Music and YouTube Music, this model of customer ownership and collectability has given way to advertising and subscription-driven services. This has reduced a lot of the emotional appeal of collecting an album.
NFTs can bring that collectability back to music. Artists and record companies can issue an NFT for each copy of an album. Each NFT can allow a user to stream the album it represents as many times as they want. It can also contain lyrics, images and other media that are not available on subscription or advertising-based platforms and that add value to the ownership of the album.
If a user decides that they no longer like a particular band, they can resell its albums, granting the right to stream each album to the new owner. If they buy a band’s first album before it becomes popular, they may even find that they can sell the album for a profit.
Songs and albums can also be tied to concerts, meet and greets and fan clubs of the artists, and may even grant the owner exclusive rights to the song. This means a music NFT can provide fans with a sense of social status and exclusive access to performers they love.
The benefits of NFTs can go well beyond the songs themselves and bring fan loyalty to a whole new level.
Unlocking equity and transferring ownership of real estate
Another place where NFTs can shine in the future is in the real estate space. Transferring ownership of property is extremely complicated and costly today.
But with NFTs, an owner can theoretically issue a token that represents their property, and this token can be transferred to a buyer to complete the sale. An owner can even use the token in a future real estate DeFi app to extract equity from their home. This would be far cheaper and efficient than using a bank.
That’s not all! Imagine owning a fraction of a property that you normally wouldn’t be able to afford. A non-fungible token can give you the ability to do just that. Own just a piece of a home, gain from the price appreciation of the property and have a digital record of your percentage of ownership stored on the blockchain.
Transferring the ownership of textbooks and other works
College textbooks can also be made into NFTs in the future. Many students currently prefer to buy paper textbooks instead of digital ones. This is because the digital ones cannot be resold after a class ends.
Despite publishers needing to spend money to print paper books, the digital ones still end up costing students more money.
This problem can be fixed by having the publisher print an NFT for each copy of the textbook. This way, students who wish to keep their textbooks for nostalgic reasons or just because they want to use them for reference can still do so. But students who would prefer to get rid of their books and get some cash at the end of the semester can simply sell the tokens and transfer their right to read the books in the future.
The future use cases of NFTs are virtually endless
Despite the fact that NFTs have only exploded over the last 18 months or so, using them to store digital artwork on the blockchain is a concept that is already five years old.
In the Western world, we take things like proof of ownership, certifying authenticity, licensing and property rights for granted. That’s because we have access to traditional robust legal and government systems that protect us.
That said, relying on that protection means trusting a central figure. Unlocking an individual’s rights to intellectual or physical property through NFTs does the same thing to the value of those things as Bitcoin does for money. It allows you to be the steward of your own ownership the way Bitcoin allows you to be your own banker.
That’s an important value proposition to understand, especially for the over 2 billion people around the world that are unbanked and likely live in places where they can’t necessarily rely on a robust legal system to protect their ownership rights.
That’s exactly why the future of NFTs goes far beyond social status, memes or multimillion-dollar works of art turned profile pictures. This is just the beginning of a global revolution that started out disrupting banking and is now going to disrupt everything else.
About the author:
By Leighton Emmons, co-founder of Blockchain Boys Club, a new community where founders, developers, and investors can come together around their mutual passion for all things blockchain; learning, sharing knowledge, and discovering opportunities they otherwise might have missed. The community is launching with an NFT collection of 10,000 unique avatars called BCBoys and holders will have access to “The Terminal,” a members-only area of the community where professional traders and investors offer real-time trading signals and share investment opportunities.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.