Non-Fungible Token’s (NFTs) have taken the world by storm over the last few years, despite much criticism. NFTs, which are currently commonly associated with Bored Apes and massive art sales, can actually be used in a bunch of different industries in ways that will enhance brands and Artists in terms of monetization and ownership.
There are 3 categories of NFTs:
- Level 1: NFTs, such as Art, VIP passes, or virtual lands that are purchased as an investment
- Level 2: NFTs with a utility — like a skin for a character in a game, or the staking of an NFT to receive rewards.
- Level 3: NFTs as a fast blockchain that allows you to write actions done in a game or application.
In this article, we’ll be looking at how certain industries can benefit from using NFTs, which are the best Blockchains to use, and the future of NFTs. Let’s get started!
Which industries can benefit from NFTs?
There are a variety of ways in which industries can change their interaction with customers and clients. Between changing the way patents are structured to the ways musicians earn royalties, there is so much potential.
NFTs have already proven to be quite beneficial for the world of fine art. If at first artists and curators weren’t convinced, NFT artworks are now being sold for millions at Christie’s wasn’t considered as such, now NFT Artworks are sold for millions at Christie (one of the world’s biggest auction houses). In the past, digital sculptors weren’t able to sell their sculptures unless they were printed in 3D or sold as game assets, which was also often the case for digital designers, painters, and animators. Now, digital artists can sell their art as NFTs.
Photographs can be sold the same way art is sold as NFTs. Photographers have the capacity to sell their works as assets — selling the rights to their pictures for editorial purposes, tracking where the image goes, and earning a percentage of sales if the image is later resold to another outlet.
Like art, songs can now be sold as NFTs — either with the right to the lyrics or the melody itself. Platforms sell samples or feature catalogs of samples already, but now a musician could sell a specific amount of their sample, making it only usable for 10 songs per se. If the sample was to be resold the artist can then earn royalties on the second sale (like any other NFT). As of today, an artist will earn about 1$ for a thousand streams on Spotify, and would be carried through the owner of the wallet and not locked between a platform such as iTunes or Spotify.
VIP access, passports, concert tickets, and way more physical assets can be stored as NFT to keep proof of your ownership. For example, Coachella has sold some NFTs that allow their owner a lifetime pass to the festival. Of course, speculation and price are a big factor, and the festival would need to keep its status to be worth the price.
NFTs might be the next evolution in the gaming industry. A decade ago we saw the arrival of microtransactions in games like Farmville, making users pay for a specific platform or buy coins for one specific game — but what if everything changed and we were to back to the good old days of arcades? Not actually going to arcades, but having a single coin that is accepted on multiple platforms which you can then sell afterward for real money or crypto. This would allow gamers to make money in the form of crypto. Games would be able to sell character customization as NFTs, making them rarer — as Nike does release a limited series of shoes, such as the Nike Dior.
Another factor that could make NFTs the future of gaming is the economy — gamers could make money or be empowered to own their coin instead of being locked behind a game engine.
It was inevitable: the proof of stake that NFTs provide reached the trading card community. Some collectibles will remain fully digital, while some could be both physical and digital. The problem with physical trading is that the authentication process can take a long time and often needs to be sent to an expert, while NFTs trading cards can be easily verified with less expert knowledge.
As of today, if you want to register a patent it can be quite costly and require a lot of paperwork. But what if you could simply mint a patent and have the data forever on the blockchain? This would allow the owner of a patent to lend it, sell it or make it open source on their terms.
In 2020 people signing documents were advised to write the full date instead of a simple 20 to avoid fraud. What if your lease could be accessed at any time and engraved on the blockchain, remaining unchanged? As of 2019, Malta has made it mandatory to register your property or rental agreement on the blockchain as an NFT.
Which Blockchain should you pick?
Now that you know how your industry can benefit from the use of NFTs, it’s time to decide which blockchain to use to mint your NFTs. There are a variety of blockchains to choose from.
Ethereum is definitely the most popular of the blockchains. Since Bipple (Mike Winkelmann) sold one of his artworks for around 69 million dollars in 2019 it secured Ethereum’s place as the main blockchain to mint NFTs. One problem with this blockchain is the slowness of its transactions as the number of transactions per second is pretty low, which also highlights another problem: the high gas price to mint anything on the blockchain. This leads to the biggest problem, the high energy consumption for each and every transaction. On the bright side, the latest Ethereum update (known as ‘the merge’) is supposed to drastically reduce the carbon footprint.
Solana wasn’t the first blockchain to be fast with cheap gas, but it’s one of the most popular. As of today, a transaction on their blockchain is the equivalent of a google search, making it pretty “eco-friendly”. Solana was recently listed on OpenSea as a Beta for some selected projects, making this crypto even more attractive. Sadly, Solana tends to crash. It can be down for several hours (if not days). This may be due to the fact that Solana is not 100% decentralized and uses the physical server of Amazon. But, at the moment Solana is one — if not the fastest —blockchain to mint your NFT.
Polygon is a second-layer crypto blockchain — it’s based on the Ethereum blockchain with a two-way bridge, allowing Polygon to have low gas and be pretty “eco” while still being on the Ethereum blockchain. It is listed on OpenSea, but obtaining some Polygon is less straightforward than others and can cause issues for customers. The lack of popular projects or artist mintings on this blockchain makes it less attractive than other main ones.
One of the newer contestants in the blockchain, Avalanche has a reasonable speed and pretty low gas fees. But sadly, Avalanche hasn’t had a successful project minted or a famous artist selling on it yet.
When people realized that Ethereum was not eco-friendly, a new contestant came along called Tezos. The blockchain has faster transactions, lower gas fees, and a brand new platform to buy and sell called HicetNunc. Besides the problems that made some artists part ways with Tezos, a large community formed around the crypto and mint beautiful artwork.
What are the issues with NFTs?
Despite all the possibilities NFTs hold, there are definitely some issues that hamper the commercial use of blockchain. Luckily, there is a general effort on the part of blockchains to improve these issues.
Pollution is a real struggle for some of the Blockchains, especially Ethereum. A lot of people have chosen to go against NFTs, demonizing them as the cause of many problems. However, blockchains like Solana and Tezos are good, greener alternatives to more energy-heavy blockchains. Other blockchains like Ethererum are working towards becoming more environmentally friendly.
Theft can definitely be a problem in the crypto space. Wallets can be hacked, people can send trojans to steal your crypto and so much more. Hopefully, in the future of blockchains, better protection is in the cards.
What is the future of NFTs?
NFTs are the next step and are part of our future — they’re already being used in Malta secure rental contracts and register properties! NFTs allow artists of many different mediums to finally earn money in a new way and earn the royalties they are due for the reselling of their art. We recommend Solana as a blockchain of choice, but we are also excited to see how Ethereum 2.0 will be received by the community and newcomers.
Despite the issues with NFTs, a lot of problems that artists have been complaining about are being resolved with NFTs — giving proof of origin to their art and allowing them to earn royalties.
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