Non-fungible tokens are some of the most popular holdings in the blockchain environment, and their appeal to the public doesn’t seem to let out anytime soon. The reason for the hype surrounding NFTs is their scarcity. Within the digital asset market, the rarer a holding is, the more valuable it becomes. Built through smart contracts, every token is unique and easily traceable as a result. Although this simple standalone fact makes NFTs worthwhile collectibles, they are also given further value due to their corroboration with the world of digital art and music, as well as game pieces, presents and even events that are sold and bought on the market.
Given that they are an integral part of the blockchain, the Bitcoin price is significant for the cost of NFTs. However, the relationship between the two is somewhat complicated, and there’s no longer a direct cause-and-effect connection between the two. Initially, the market was tiny, so it had to rely on the larger cryptocurrency environment to survive. With specialized marketplaces set to develop, it might be that the final decoupling between crypto and non-fungible tokens is just around the corner.
But until then, it’s worth remembering some of the real-use cases of NFTs and how they’ve helped shape not only the world of digital finances but the traditional financial environment as well.
Real-life uses
Generally speaking, cryptocurrencies get a reputation for being virtually unusable in daily life, a stereotype that’s even more pervasive in the case of non-fungible tokens. However, this is nothing more than a biased view, and a closer look is all that’s needed to get a better idea of how the market operates. The truth is that these tokens carry several potential uses for their holders.
First of all, since they are so rare, it automatically means that it’s pretty straightforward to differentiate the original from the fakes. Although it can seem like digital assets are virtually devoid of any value because they can be easily reproduced or copied, NFTs come well-equipped to withstand the possibility of counterfeits. In a sense, the originals are akin to a painting in a room full of copies. The owner is also in full possession of the tokens, meaning they don’t need intermediaries to manage their holdings and portfolio.
And, of course, since the market shows so many different possibilities for how it could potentially evolve, it’s worth having a look at a possible future application for NFTs as well. The marketplace could start new pathways for asset transfer, a process known as interoperability. According to analysts, there is some clear value in this possible use case, as it would enable transfers across platforms. NFTs are a solution for virtual goods and could work very well in the context of the metaverse.
In film
Hollywood is particularly open-minded when it comes to NFTs, and both giant blockbusters and independent productions have adopted non-fungible tokens for different reasons. In the case of the former, the large studios see it as an additional way to derive revenue for their intellectual properties. In the case of smaller indie films, NFTs have the potential to help them become more visible. Viewers are increasingly turning away from physical copies of their favorite motion pictures, with digital solutions beginning to replace them at an ever-growing speed. With files and streaming gaining ground, the future of the entertainment industry lies in embracing digital solutions.
Several studios have employed this tool for well-known productions, including “Lord of the Rings” and “Stranger Things”. In the case of the former, famous as a lengthy blockbuster split into extensive individual productions, the NFT essentially replaces a DVD or Blu-Ray by offering a copy of the film and special features unique to it. For the latter, the tokens acted as posters of the show’s stars. There are also instances in which NFTs don’t have a solely commercial or promotional aspect. For films such as Martin Scorsese’s historical epics “Silence” and “The Irishman”, the use of NFTs can mean additional funding that can help projects that would otherwise never get made, develop and reach the public.
In music
There’s no shortage of professional musicians that believe the industry is long overdue to change, improve and catch up with the times. When it comes to streaming, which has become the traditional way of listening to music, overtaking physical tools such as CDs, artists see a relatively small part of the royalties. Therefore, many feel pressured to do live shows and commence extensive touring to increase their income.
Steve Aoki has been particularly vocal on the subject, and, in February 2022, during an event, he stated that he had earned more from non-fungible tokens than he has from over a decade of creating and playing music. This revelation shocked the general public. However, his fellow artists were unsurprised. Some musicians have expressed their desire to use NFTs as tickets of sorts that can be offered to exclusive communities.
Perhaps unsurprisingly, the musicians most likely to become involved in NFTs are the ones creating in the electronic genre. As Dillon Francis, better known as DJ Hanzel, explains, electronic artists are more aware of technological changes because their craft is computer-based.
In fashion
The fashion world and industry are longstanding and have a reputation for innovation and prestige. Some of the most well-known designers and fashion houses have complex histories and dedicated legions of clients and admirers that follow all their collections. Given the metaverse craze of 2022, many brands have ventured into the field of digital wearables.
Tiffany’s launched a limited-edition collection of 250 NFTs. Each was priced at approximately $51,000. Others such as Pada, Givenchy, Balenciaga and Dolce & Gabbana have seen non-fungible tokens as a means to increase product revenue, although they haven’t yet addressed the possibility of using the tokens as a means to provide authentication for physical goods.
To sum up, the world of NFTs has several real-world applications, and brands and individuals have started to catch up on them. Since things constantly change in the crypto environment, how the market will evolve over the upcoming years remains to be seen.
