The world of NFTs may sound like it’s only overpriced digital art to some, but these crypto collectibles are changing the game in ways you wouldn’t believe. From social proof to virtual fashion and engaged communities, NFTs are revolutionizing how we do business and creating unique and unforeseen business opportunities. Here’s the inspiration for you to create one.
In the next decade, most digital assets being traded peer-to-peer (or B2B) will be NFTs, according to Kaufman @ Chainstack. So, let’s dive into real-world businesses using NFTs to shake things up.
Have you seen someone sporting a Cryptopunk or BoredApe jpeg as their profile pic on social media? It gives them instant credibility and shows that these once-free digital assets are trading for millions of dollars even during the crypto winter. If I am dealing with someone with a fake Punk image, it tells me a lot about that person too, and probably someone I wouldn’t do business with.
Finance, Politics & Entertainment
With tokens from ICOs over-flooding the market, even finance is betting big on the NFT game. Borrowers can use NFTs as collateral with NFTFi and earn interest by staking and lending. Political campaigns (Datavault) and films (Calladita have raised funds using NFTs. Conversation campaigns (Gain Forest) have taken this a step further, bringing utility to the NFTs by allowing them to track the health of forests or, as IMPT did, converting carbon credits into tradeable NFTs. Hip Hop artist Nas sold NFTs to his fans, giving them the right to share in the royalty income from his music, creating a sense of loyalty and connection.
As NFT tech use cases became clear, venture capital started flowing in. Shima Capital began in 2021 and invested in 57 NFT-related projects.
Before NFTs, there really wasn’t a good way to prove ownership of digital assets, and NFTs do this in a unique and tamper-proof way. This made Gaming a whole lot cooler. In Alien Worlds, players can trade in-game assets like a magical sword, an avatar, or a minion, as NFTs on the blockchain give them true ownership as opposed to items in a game like Fortnite, which can be turned off by the developer/studio. In the Metaverse, you can also show off your unique fashion sense in Decentraland and Sandbox with NFT-powered $4,500 Gucci handbags, virtual clothing, and tattoos, perhaps on land you bought from a broker, like Metaverse Properties, to start a museum or a club.
As NFTs grew in popularity, public marketplaces like Opensea sprung up to meet the needs of people wanting to trade them. Game-specific ones like Immutable opened up new ways for gamers to monetize their time and efforts by converting NFTs they earned in the game through months of grinding and playing into cash or crypto.
Immutable, an Australian startup, became a ~$3.5 billion business in 4 years by building an entire Gaming platform around NFTs and web3 gaming.
So, what makes NFTs so valuable?
First and foremost, NFTs offer a unique and tamper-proof way of verifying ownership and provenance of digital assets. With NFTs, you can ensure that your digital artwork, in-game item, collectible, or even real-world asset is one-of-a-kind and authentic. This opens up a world of possibilities for luxury goods sellers, artists, gamers, financiers, brokers, fitness coaches, and many others.
Since a single NFT can store all your identity data in the form of tokens. This allows you to select only the data (tokens) you want to share with a platform. For eg., a Gameswift ID is a Unique Gaming Profile with all their player’s gaming achievements, statistics, and assets (including other NFTs), regardless of the chain or the platform from which they originate.
NFTs can be used to track ownership history from the origin, proving not only that you currently own the object but also a history of owners right from the day it was produced (or tracked!). How much more valuable is a guitar that was owned by Taylor Swift when it can be verified on the blockchain rather than trust the claims of a dodgy dealer? This has applications for pharmaceuticals, antique cars, and seafood industries where end-to-end tracking of the goods through the supply chain and ownership history is essential information. The Californian car and boat registry DMV now allows you to transfer ownership of cars via the Tezos platform.
However, many items change over time, giving rise to dynamic NFTs (ERC-1155), which can update their metadata. So, when the members’ frequent flyer points change, the dNFT can be updated for an airline’s loyalty program. ITM has applied this to electric vehicles by creating a dNFT, which can adapt in real-time in response to external data like mileage, oil, and engine health.
In Web3, greedy corporations are out, and DAOs (Decentralised Autonomous Organisations) are the way forward. Mintable’s innovation here is that they are the world’s first DAO where voting is done via NFTs. They believe that projects, where voting is determined by the number of tokens, are easily hijacked by speculators or bad actors.
Besides self-governance, self-custody is an important feature of Web3. Unstoppable Domains provides Web3 Domains (like .com or .eth) launched as smart contracts on public blockchains. Web3 Domains are stored in a wallet by the owner, much like a cryptocurrency, and no third party, like a government entity, can take them away.
An active, engaged community is the heart of Web3. Reddit turned around its NFT-hating members, including one of its own founders, and successfully monetized its loyal membership base. Its launch did not mention the word “NFT,” and it onboarded 2.5 million users with crypto wallets (calling them vaults) and quickly overtook even Opensea in the total number of members. Members can be further incentivized by giving them access to clubs, exclusive content, or like Starbucks’ Odyssey app that gives members entry into their Costa Rica plantation. Many businesses are sitting on a membership base that could be incentivized and monetized via the use of a good Tokenomics model.
Of course, this is all too new and confusing, so companies like Tokenomics DAO have created an education platform & consulting service focused on finding unique ways to use a combination of a business’s existing revenue streams, NFTs, and tokens to incentivize & monetize their community.
What’s in it for me?
After seeing how others have created entire businesses around NFTs, the question is, what business could you start up? While this depends on your core skills, here’s an idea: one of the most popular website-building companies is Wix.com. It has no NFT-related app that its customers could add to their website. 1 million website owners may be searching for an app to convert their products into NFTs easily convertible to/from currency/fiat/crypto.
In conclusion, NFT technology is more than just a trend. It’s a revolution in how we think about digital assets and their potential to change the world. So, buckle up and get ready for a wild ride because the NFT revolution is just starting!
The Author: Manu Sood
I work with an Australian blockchain development startup called Intrinsic. Intrinsic is building an NFT and Token transaction platform where users can go beyond trading and create new assets by combining NFTs, Tokens, Crypto, Land parcels tokens, Avatars, etc, into new digital assets. Game studios’ can define their own recipes ie inputs, and outputs, depending upon desired behaviors and designed incentives through Tokenomics.
Our team of developers and our NFT platform can turn your blockchain idea into reality. So, feel free to contact me to discuss your blockchain or NFT idea.