When you mention NFTs to your friends, there’s a high chance that what comes to mind is overpriced artworks. Expensive JPEGs that sell for millions of dollars, and that’s a problem.
This is the mindset of a person who believes that the internet is only a play tool. A place to share memes and chat with friends.
Now that NFT collectible prices have crashed, real innovation can happen, and this stigma can be broken as better uses of NFTs are explored.
What Really Are NFTs?
“Non-fungible tokens,” are a type of cryptocurrency where each token is unique from the rest. And contains an embedded URL linking to its unique content and metadata.
NFTs are comparable to deeds of ownership where the URL points to the thing the token grants ownership of (allegedly, always check the fine print).
One which affords tremendous flexibility in what NFTs can do and represent. Unfortunately, during the 2020-2021 cryptocurrency bull-run, investors and retail speculators threw millions into NFT profile picture collections.
They did this with no use cases, often paying $100-$1000 to mint each token hoping to land the next million dollar NFT.
This only incentivized more collections and various knock-offs to emerge as blatant copy-paste cash-grabs. The kind that was understandably leading to the misunderstanding of NFTs today.
How The Misunderstanding Began
The explosive new from NFT projects like Bored Ape Yacht Club and CryptoPunk didn’t help mainstream awareness.
This brought about absolute confusion amongst non-crypto populates. Especially those still struggling with the concept of NFT.
However, on OpenSea, one would notice that there are more sections than just collectibles. Sections like Music, arts, photography, sports, land plots and avatar gear for the virtual world. There are also sections for utility NFT and NFT domain names for crypto wallets.
NFTs are especially suitable for blockchain-gaming and purchase of Metaverse items. This allows the existence of virtual property with real-world value.
For example, the virtual metaverse worlds Decentraland and The Sandbox both have NFT-based economies. Both with scarce NFT land plots running thousands of dollars.
Players can create and sell their own NFT avatar gear on in-game marketplaces. Blockchain gaming and “GameFi” sectors also use it extensively.
Their applications include the adorable yield-generating Aavegotchi pets or the wildly successful Axie Infinity battle-pets.
These four examples are vastly more interesting than JPEG collectibles, yet they receive little attention outside crypto.
Crypto Wallets And NFT
One powerful feature that is commonly underrated is the ability to check a crypto wallet for particular NFT.
This feature is widely used for private Discord servers. A situation where a bot is used to auto-approve and kicks Discord users based on which NFT they own.
NFT-based DAO governance communities utilize this ability for assigning roles and voting power.
Websites can check for NFTs in a visitor’s crypto wallet, providing hidden areas/content for them to discover.
Just How Useful Are NFTs?
NFTs can even be used for selling online professional services as tokens. This is done using free market economics to determine the price for that service.
NFT source code is open-source, allowing developers to experiment with new and exciting features for their NFTs.
NFTs can apply in representing real-world items and property deeds. It can do this using the blockchain to record transactions and ownership data instead of private databases. These examples barely scratch the surface of what NFTs can do, and all of them are more interesting than collectible JPEGs.