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Thanks to their unique properties (such as provable ownership, scarcity, and immutability), NFTs have a wide array of potential applications, many of which are only just beginning to be explored.
As more companies find new ways to incorporate NFTs into their business models, it's expected that the global market will grow at a CAGR of 33.7% over the next few years, before eventually reaching a market valuation of $232 billion by 2030. Pretty remarkable for a technology that is still in its infancy.
So, what are some of the potential use cases for NFTs in 2023 and beyond? Let's take a look at six of the most popular/promising applications.
At this point, NFTs have pretty much become synonymous with digital art, and for good reason. The ability to verify ownership and provenance of digital artworks (something that has always been a challenge) has made NFTs the perfect tool for artists and collectors alike.
Some of the most popular and expensive NFTs to date have been digital artworks, such as Pak's "The Merge," which sold for $91.8 million dollars (which is currently valued more than many bonafide masterpieces by the likes of Van Gogh and da Vinci).
For most people, NFTs and digital art are the perfect examples of how this technology can be used to create and trade unique digital assets, especially given the massive liquidity that exists across the various digital art exchanges.
The ability to own and trade virtual assets provides a level of immersion that simply isn't possible with traditional games. In-game items that are purchased or earned can now be stored in a player's personal "wallet" and traded (or sold) on secondary markets.
This not only gives players a sense of ownership and control over their in-game belongings but also provides an additional revenue stream for game developers (as a percentage of all secondary market sales).
We're already seeing a number of popular games pop up in the new and exciting "play-to-earn" genre, with titles such as Axie Infinity, Gods Unchained, and Spliterlands leading the pack.
One of the most intriguing use cases for NFTs is in the realm of real estate. The idea here is that property ownership could be stored on the blockchain (as an NFT) and then traded in a similar way to how we currently trade cryptocurrency.
This would have a number of advantages, such as increased transparency, provable ownership, and 24/7 global market access.Not to mention, it would make fractional ownership a breeze (think timeshares on the blockchain).
Fine art investing has typically been an asset class reserved for the ultra-wealthy, but NFTs have the potential to democratize this space and make it accessible to a much wider audience. Rather than having to pay exorbitant fees to purchase a piece of art through a gallery or auction house, NFTs can be bought and sold directly between buyers and sellers.
Artfi is a web3 platform that is already working on this exact use case. Built on the Polygon network, the platform is designed to make it easy for anyone to buy, sell, or trade NFTs representing fine art.
What's more, the platform is also working on a way to allow users to fractionalize ownership of fine artwork (valued between $1 to $10 million), which would make investing in this asset class more affordable than ever before.
The ability to easily verify ownership and transfer tickets (without the need for a third-party platform) makes NFTs the perfect tool for managing event registrations. Not to mention, it would also allow organizers to create unique experiences and craft exclusive ticket bundles (something that is currently not possible with traditional ticketing platforms).
A number of event-focused NFT platforms have already popped up, such as SeatLab. The company is focusing on building a ticket infrastructure that eliminates fraud and reduces the impact of ticket scalping, which is something that has long been a problem in the traditional ticketing industry.
The music industry has been struggling to find a way to fairly compensate artists for their work, but NFTs could provide a much-needed solution. By allowing artists to directly sell their music (as NFTs) to fans, they can bypass the current system that relies on streaming platforms and music labels to generate revenue.
This would not only allow artists to keep a greater percentage of their earnings but also give them more control over how their music is priced and distributed. Additionally, it would create a new market for musical NFTs, which could lead to the development of innovative ways to package and sell music (such as limited edition releases and exclusive bundles).
One of the most valuable applications of NFTs in the music industry is the ability to write royalty payments into smart contracts. This would ensure that artists are fairly compensated for their work each and every time it is sold or streamed, which is something that is currently not possible with traditional methods of music distribution.
It's still early days for NFTs, but the potential applications of this technology are vast and varied. From fractionalizing real-world fine art investments to creating unique ticketing experiences, NFTs are poised to change the way we interact with a number of industries – and that's just the tip of the iceberg.
As NFTs become more mainstream, we can expect to see even more innovative and exciting use cases emerge. So, whether you're a collector, creator, or investor, now is the time to start paying attention to this rapidly evolving space.
