Usage of NFT and blockchain-related technologies in business

NFT is all the hype recently, both in the cryptocurrency world and outside it. Really, the idea of claiming ownership of a piece of digital art — a meme, a gif, a video, a song or an image — such an idea might seem strange, as such objects are indefinitely replicable. This is where NFT or Non-Fungible Tokens come to the rescue.

Read on to find out how it works, how it can be used outside of the cryptocurrency domain, and discover 5 potential business use cases for this emerging technology. This way, you can introduce them faster than your competitors and win the hearts and wallets of your customers…

What the heck is NFT?

NFT is a unique digital record that can be attached to a real-world or digital asset. The idea behind NFTs is that there are no two same, so the objects they represent are unique, unlike dollar bills or bitcoins. While every dollar bill has a unique number, a dollar is a dollar — and if you exchange one bill for a coin, the value of your assets won’t change. The same is with bitcoins — while each one is unique, they are worth exactly the same.

Enter NFT based on Ethereum smart contracts. Every token determines one, and only object, even if there are countless copies of it. For example, the NFT of the first ever tweet by the Twitter’s founder was sold for nearly $3 million dollars. While you can freely copy it anywhere, from now on, all the rest are copies, and the only original is the one with NFT.

Everyone can make a photo or a copy of Mona Lisa and it will be worth nothing. But the only real one is in Louvre, and it is priceless.

This approach opens immense business opportunities. As for now, the most popular one is selling rights to unique piece of digital art. As with any fine arts collecting, the pieces bought for one price can become more valuable with time and be sold for more — and due to the smart contracts and blockchain transparency, the creator can still earn some money every time the NFT changes hands. This money is currently available only as Ether, but with time it will definitely be available for exchanging to any fiat.

Business uses of NFT

While digital arts collecting is a good profit avenue, it will concentrate on one-time sales, just like that Beeple picture sold for $69 million at Christy’s. But we all know the real profit lies in millions of smaller microtransactions, not in one purchase worth millions. This is how NFTs can be used in business outside of digital arts ownership niche.

Document licensing

Adding NFTs to passports. driver licences or COVID-19 vaccination certificates can help prevent their forgeries. This can also greatly streamline the issuance and acknowledgement of scientifical degrees, birth and death certificates, academic certificates and other legal documents. There already are startups working to enable NFT issuance of various documents.

Well, these can be issued all they want, but they are useless unless they are accepted, yes? Good news is, the Republic of San Marino is already accepting NFT-based COVID certificates. Thus said, using NFTs to ensure the authenticity and uniqueness of documents is a feasible business case.

Domain name registration

Standard DNS or Domain Name System controlled by ICANN cannot enforce sufficient domain name ownership transparency. Both security and possible censorship concerns are never out of question. Blockchain at its core is a transparent ledger of records and NFTs enable users to register unique domain names they can easily trade. The only limitation is that, unlike an Instagram or Twitter handle, the NFT-based domain name cannot be changed once it switches hands.

Real estate

Using NFT records instead of records of deed in real estate ledgers ensures the immutability and transparency of the ownership history. Besides, this is much cheaper to produce and maintain than conventional real estate registries. There are certain downsides, however, like the need to both keep your private key at hand and to securely store it. Should you forget the key or it gets stolen, the NFT record (and the associated real estate ownership data) will be inaccessible.

Digital art, sports, memorabilia

Sports fans and digital art connoisseurs can now purchase a moment in history — a famous gif (like the Nyan Cat), a video of a game-winning goal, a moment when a player understands he is now a champion and much, much more. Fine arts collecting is on the rise after games like CryptoKitties showed people are ready to invest millions in owning and managing digital pets.

Logistics and supply chain control

Using blockchain smart contracts for controlling the origin, route and quality of product logistics is old news. However, with NFT a business can easily determine where the produce has been and for how long — and this data cannot be altered due to transparency and immutability of records. This is what makes NFT a worthy choice for dairy, fresh meat and other perishable food distribution, where knowing the route and its longevity is vital.

Conclusions

NFTs are really in their infancy right now and the entrance cost to the market is quite low. The technology behind this new market niche was around for some time, and now the interest in NFTs has skyrocketed due to the fact that nearly any digital or physical asset can become a unique merchandise with NFT, and like with all collectibles, it’s price might grow tenfold with time.

Thus said, whether you want to invest in any particular NFT, want to launch a marketplace for them or have some other blockchain-based business idea in mind — now it’s high time to hop aboard the hype wagon.