The acronym NFT stands for “non-fungible tokens.” “Non-fungible” tokens are defined by Coinbase as “a specific kind of crypto asset in which each token is unique – rather than ‘fungible’ assets such as Bitcoin and dollars bills, which are all worth the same amount. Because every NFT is distinct.
NFTs gained a lot of traction in February 2021, when an artist named Beeple sold a 10-second video for $6.6 million. Collectors who bought the video got no physical item in exchange for their money; rather, they received a token, an NFT, attesting that each owner’s version was the genuine one
NFTs can be anything from an artwork, a domain name, music piece, a trading card, or any other digital good with a value associated to it — even a tweet.
Here are some examples of how NFTs are being used or could be used in the future.
Gaming
In the gaming sector, blockchain technology and NFTs have a lot of promise. The most well-known play-to-earn (P2E) game is Axie Infinity, which is likely the most popular P2E game in the world. The game is based on buying, breeding, and training Axies for battle, similar to Pokémon. The Axies themselves are NFTs, and through combat players can earn Smooth Love Potion, a cryptocurrency that can be sold on a secondary market for real currency. It is one of the world’s most valuable NFT projects, with over $1 billion in trade on its platform.
NFT Ticketing
The NFT market is rapidly expanding, with the launch of new products by companies such as GET Protocol and Centaurify. The creation of NFTs for tickets allows for greater control over the resell market, more secure ticket storage, and the potential to regard tickets as digital collectibles.
NFTs have the potential to offer lifelong value, unique access, and other incentives for purchasers. NFT ticketing applications are being developed that include:
- Rock band Kings of Leon are selling NFTs that give purchasers front-row access to their tours.
- WarnerMedia provided DC Comics comics as NFTs and tickets to their DC FanDome event.
- Gary Vee’s VeeFriends token owners get access to VeeCon. VeeCon is a multi-day event exclusively for NFT holders. Your NFT will give you a three year access pass.
- Mark Cuban announced that he wants to bring NFT ticketing to the NBA
- Andy Murray’s Wimbledon 2013 victory, which included two VIP tour experiences and Centre Court tickets to the Gentlemen’s Final of Wimbledon 2022, as well as a 30-minute game of tennis with Murray himself, is an NFT.
- Coinbase’s integration of NFT items into the Governors Ball Music Festival in New York, providing its users a free, one-of-a-kind NFT that also gave them access to the VIP area.
Avatars & PFP NFTs
The popularity of the profile picture (PFP) and avatar NFT initiatives is unrivaled in the history of NFTs. The groundwork for these projects was laid in 2017 with the launch of CryptoPunks, which established a foundation for subsequent NFT ventures.
In 2017, 10,000 CryptoPunk NFTs were generated algorithmically and given out for free to anybody with an ETH wallet. The most affordable of the 10,000 is now worth over $400,000 and over $4 billion has been traded in the NFT series since.
AI-Generated Art
In 2018, Obvious Art sold a piece of AI art created by an AI called GAN at Christie’s for over $400,000. With the introduction of NFTs and the value of digital assets now globally recognized, new AI projects are generating new works every day.
NFTs in Music
Imagine it like this: an artist you love creates a new track that you think will be the next big hit. You see they’ve minted it as an NFT, fractionalized the NFT, and are selling shares in the song . You buy up 30% of the song. A month later, the song goes viral. Everyone’s streaming it, TikTok influencers are dancing to it, and Coca-Cola wants to use it for their new commercial.
Along with the artist who made the song, you’d make money off the song going viral. You’d get to play the song at parties and tell your friends you’re a part-owner of it. You’d even be able to sell your share of the song at a profit.
Fans are empowered to invest in and support artists when they may do so while also receiving a share of the profits—when and if the song becomes profitable.
Conclusion
With the launch of new products and integrations, the potential for NFTs is vast. As the market expands, we will continue to see new and innovative ways that NFTs are used.
