The Use-cases of NFTs

As an emerging technology, non-fungible tokens (NFTs) have already been used outside of the typical application they are known by NFT lovers - namely for trading artworks and game characters. However, there are several use-cases for them across several sectors including real estate, finance, gaming, etc.

Intangible concepts such as intellectual property can also be represented in NFTs, physical objects, and digital content. While it might sound crazy to consider the possibilities beyond digital content, 2D or 3D images, there are several practical application possibilities. And with the introduction of Web3 and the Metaverse, there are more future use-cases and opportunities that can be implemented. Read on to get more insight.


The challenge of creating a digital scarcity of assets before non-fungible tokens were enormous. Despite copyright protection, it was extremely easy for consumers to copy or pirate digital artwork.

As a result of the development of NFTs, crypto art and digital collectibles have emerged, but it hasn't stopped there. NFTs can be used to determine the authenticity of many unique and collectible items, from real estate to logistics.

Although the NFT ecosystem is still young, it offers many interesting projects, some of which have already contributed to the industry's growth. Here are some use-cases of NFTs:

Art NFTs

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World War II destroyed much art. False copies replaced some, while others were stolen by individuals, groups, etc. Through NFTs, it will be possible to track the original artworks of old masters soon. The same holds for physical artworks to be created in the future.

However, this could also work in the opposite direction. An NFT can be made from physical art, and physical art can be made from an NFT (while retaining the digital token, of course).

It can prove the authenticity of a particular piece of artwork and reduce or eliminate counterfeit pieces. Also, this assures NFT owners that their property is authentic, especially if it was purchased through an auction house.

Collectible NFTs

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A massive demand exists for digital collectibles, whether PancakeSwap Bunnies or Binance Anniversary NFTs. NBA Top Shot collectible trading cards have even made it mainstream with this use case.

There's a lot of crossover with crypto art, and at times an NFT can be both a collectible and an art piece. On NFT marketplaces like Opensea, BakerySwap, and Treasureland, these non-fungible tokens are a big part of sales along with digital NFT art.

The first tweet from Jack Dorsey is an excellent example of how NFT collectibles work. As a CryptoPunk, Dorsey's NFT is collectible and artistic; however, its true value lies in its collectibility alone.

Valuables tokenized Dorsey's tweets and allowed him to sell the NFT. Anyone can buy the NFT. Anyone can make Counter-offers, and you can be outbid. Once the tweet author receives an offer, they can accept or reject it. If they accept, a unique NFT containing their autograph will be minted on the blockchain.

The verified Twitter handle of each author is listed as the signer for each NFT, which means that only the original author can mint their tweets as NFTs. The result is a digital, rare collectible that can be traded or kept. It can be challenging to conceptualize the concept of tweets for sale, but it's a prime example of how NFTs create collectibility. It's like a digital autograph.

Finance NFTs

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We often forget that NFTs are not just songs, pictures, or collectibles. Several financial benefits are also provided by NFTs in decentralized finance (Defi). But, most of the time, their value will come from their utility, not their artwork.

The JustLiquidity NFT staking model, for example, allows portfolio expansion. The user stakes a pair of tokens in a pool for a predetermined time and receives an NFT to participate in the next pool. Once you participate in the new pool, the NFT serves as an entrance ticket and is destroyed. Based on their access, this model generates a secondary market for these NFTs.

Gaming NFTs

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The gaming industry has a huge demand for unique items traded and purchased. Gamers are already used to the idea of valuable digital items, and their rarity directly affects their price. NFTs and blockchain technology could tap into the multibillion-dollar gaming industry created by microtransactions and in-game purchases.

Some projects have actively integrated blockchain technology into their games, while others have not. For example, there is a Pokémon style game called Axie Infinity, which has tradable pets and items. Peer-to-peer sales (external marketplaces) are also an option for buying and selling these tokens.

Many gaming NFTs have utility as well as aesthetic appeal. Axie pets each have a unique ability to battle. This ability also affects the value of the pet when traded. For example, a CryptoKitty's breeding attributes are worth a lot. Pets are valued based on the combination of their look, features, and utility.

Real-world asset NFTs

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By combining physical assets with NFTs, we can prove ownership more digitally. Deeds of real estate, for example, typically refer to physical properties. Incorporating digital tokens of these deeds can make highly illiquid items (such as houses or land) more liquid on the blockchain. However, regulators have not provided much support for this application so far.

Shane Dulgeroff created a property for sale in California in April 2021. He attached a cryptographic artwork to the token as well. If the house is won at auction, the winning bidder receives the NFT. However, there is a question as to the legal status of the sale and the rights of the buyer or seller.

An NFT can prove ownership of smaller items, such as jewelry, when resold. An ethical diamond, for example, usually comes with an authenticity certificate. With this certificate, you can also prove that you own the diamond. Reselling the item without the certificate makes it impossible to verify its authenticity, and it could be difficult for the seller to convince buyers they are the actual owner.

With NFTs, the same concept is possible. An NFT can become as valuable as an asset by being associated with it. And we can expect to see more NFTs representing real-world assets as the Internet of Things develops.



Author: Gate.io Observer: M. Olatunji
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