- How NFTs function and what makes them valuable
- Popular Token Use Cases
- What next?
- Final thoughts
The NFT industry has attracted multiple token use cases. Entrepreneurs, brands, and artists leverage income-generating opportunities in this popular sector. Although the industry is trendy, some people don’t know how to create or apply non-fungible tokens.
So, before delving into the various Token Use Cases, it’s essential to differentiate between fungible and non-fungible tokens (NFTs). Fungible tokens are those that can be exchanged for other similar tokens. In other words, fungible tokens are interchangeable. For example, you can exchange a BTC coin for a similar one.
On the other hand, non-fungible tokens (NFTs) are unique and irreplaceable. The irreplaceability of non-fungible tokens (NFTs) makes them ideal for multiple use cases. One can encounter many Token Use Cases, such as virtual collectibles, artworks, in-game items, and trading cards. This article dives deep into some of the popular Token Use Cases.
How NFTs function and what makes them valuable
NFTs are unique and exist in the blockchain environment. Individuals can claim ownership of their digital assets through unique data, which can be traced via the decentralized ledger. You can create NFTs from virtual items to represent your virtual or non-virtual items. NFTs can signify multiple things, such as legal papers, music, video clips, etc.
Here are the properties that make NFTs valuable:
- Authenticity: smart contracts allow one to check digital collectibles’ origin and ownership information.
- Uniqueness: the rarity of an NFT helps to determine its value.
- Utility: besides the aesthetic value, NFT can have some utility that provides more use cases. Utility token use cases can be various things, such as access to gated content and rolling premium club privileges. NFTs with utility are more valuable than those that lack utility.
Popular Token Use Cases
NFTs have unlocked massive opportunities, and many Token Use Cases keep emerging. Here are the trending Token Use Cases in various industries:
1. Real estate
Among the best Token Use Cases is in real estate. The industry stands to benefit a lot from the tokenization of properties. Tokenizing real estate properties can boost their liquidity and attract many investors, including average and high-net individuals.
A pain point for many property owners in real estate is the existence of multiple third parties, like notaries and brokers. Tokenizing the assets removes these individuals and reduces the buyers’ transactions cost. The use of smart contracts allows parties to conduct transactions without involving third parties.
2. Custody of government documents
NFTs and distributed ledger technology make it possible to keep all medical and government documents. Through these technologies, it’s impossible to modify the stored documents. Keeping the records in distributed ledgers in NFT format boosts the privacy of the papers.
3. Intellectual property (IP) rights
NFTs can shield the virtual assets of the real world, such as intellectual properties. Patent owners can mint their content into NFTs and get them timestamped with ownership IP.
4. Gaming sector
Non fungible tokens use cases have disrupted the video gaming industry. Previously, game publishers were the only beneficiaries of the income generated by this million-dollar industry. Thanks to NFTs, things have now changed as gamers can also earn decent revenue from the sector. Players can mint, hold, or trade their in-game items, like characters and skin.
Furthermore, the play-to-earn (P2E) model allows players to receive some unique in-game items they can keep or sell to other gamers. Over time, the unique in-game elements can increase in value, and players can sell them at a profit.
With the emergence of the metaverse, there will be more Token Use Cases for the gaming industry. So, the gaming industry is set to benefit a lot from the sector.
5. NFT artworks
Token Use Cases have become cool in the arts. Artists who used to earn a meager amount from their creations can now mint their physical and digital art and sell it as NFTs. The amount of income players can make depends on the uniqueness of their artworks. Furthermore, the storage of the items in blockchain ensures they’re tamperproof. This helps to safeguard the standing of an artist in the industry.
6. Ownership of tangible properties
Physical property owners can tokenize their assets and hold them as NFTs. For instance, an automotive firm dealing with classic and collectible cars can tokenize and trade them as NFTs. This boosts the liquidity of these assets and exposes them to the larger world.
7. Facilitating absolute ownership of virtual art
In the past, it was simple to copy and share digital art. A significant challenge in digital art has been the plagiarism of artwork for a long time. Due to this challenge, artists in the sector don’t receive actual value for their work. However, blockchain technology has upended the situation as artists can transform their works into NFTs which they can trade. Blockchain provides an immutable record of an artist’s content. Furthermore, artists can enjoy lifetime royalties for their creations through subsequent resells of the items.
8. Digital tickets
Digital tickets offer innovative use cases for nfts. The tickets are a prominent example of utility token use cases in the NFT sector. As the popularity of digital worlds keeps soaring, digital tickets will help identify a community’s genuine members. Members can show their non-fungible tokens as evidence of affiliation.
9. Removing third parties and fraud in the music field
With the emergence of digital media, forgery cases in the music industry are on an upward trend. Besides piracy, beginners in the music sector grapple with multiple issues, like sharing their revenue with distributors and vendors. Contrastingly, NFTs can enable musicians to link with their fans and sell their virtual files directly. Furthermore, NFT can be set to limit income sharing to a specific point.
From the exploration above, you can see many use cases of tokens. You can also leverage this innovative industry to take your business to the next level. However, if you’re a beginner in the sector, you need someone to hold your hand and guide you. A crypto consulting firm with experience in tokenization can help you. The agency can assist you in knowing the best NFT Use Case for your business, whether you want to engage users or earn from the sector.
There are many Token Use Cases in the NFT world. Also, as the sector keeps evolving, more NFTs use cases will emerge. Here, we’ve explored some prominent use cases for NFTs in various sectors. The use cases cut across multiple industries, such as gaming, event ticketing, artwork, and real estate.