What are NFTs in Nigeria

What are the Use Cases for NFTs?

Metaverse

👉 The market value of Metaverse is anticipated to reach one trillion dollars in the future, affecting every sector. However, the timing of the technology’s widespread adoption is unclear since it is still in its infancy.

👉 By 2028, the metaverse virtual real estate industry will be anticipated to expand by more than 31% CAGR. NFTs are used to buy and sell virtual lands. When someone purchases virtual land, the NFT reflecting the parcel’s ownership is transferred to the purchaser’s wallet.

👉 For $4.3 million, the biggest land purchase in the Metaverse was made in one of the virtual worlds, Sandbox. In addition, large corporations from many sectors, like Gucci, PwC, Samsung, and JP Morgan, have acquired property on the Metaverse.

Music

👉 Music NFTs are a developing NFT application. Like Art NFTs, Music NFTs are essential for artists to capture a greater share of the value they generate.

👉 Artists get close to 12% of the money they generate for the music business. For example, Daniel Allan, a producer/artist, sold a music NFT he created on OpenSea for 1.1 ETH, comparable to 1.2 million Spotify streams.

👉 This tendency also empowers genuine fans. They can personally support and get a copy of their favourite musician’s work. This gives new opportunities for artists to engage with followers in ways that were previously difficult to achieve.

👉 By acquiring original copies of an artist’s work, fans could participate in the artist’s future success. As a result, the artist is compensated more evenly. As a fan, you could reap the benefits of supporting an artist in their early years.

👉 Sound.xyz and Catalog are two platforms that allow musicians to sell their work directly to fans.

Gaming

👉 The trend of integrating NFTs into the gaming business seems to be here to stay. In-game character, equipment trade, and purchasing unique storylines are the two most prevalent uses of NFTs in games.

👉 Character and item trading allows the ability to trade or sell non-fungible tokens (NFTs) as part of a project, which could enable players to profit from their characters.

👉 In addition, buyers will have more control over their characters’ appearances and virtual things, including the opportunity to acquire skins from other players who missed limited-time deals. NFT trading of Axie Infinity characters, for instance, surpassed $4 billion in total sales.

👉 Purchasing plots. Some companies offer players the opportunity to acquire land plots and other virtual real estate products inside video games. For example, Decentraland enables players to purchase, sell, and rent land using their official marketplace or the OpenSea platform.

👉 A further instance is Axie Infinity, which includes digital land and assets. One player paid $1.5 million worth of cryptocurrencies in one game for nine pieces of property.

Fashion

👉 Fashion non-fungible tokens may be used as collectibles and virtual clothing that can be worn when seeing a friend, partying, or attending a business meeting. The fashion industry has begun experimenting with NFTs. For example:

➡️ Gucci sold a digital-only purse on the metaverse platform Roblox for $4,115.

➡️ Dolce & Gabbana blended the real and virtual worlds in a new manner when it auctioned off a nine-piece NFT for $5.65 million. It consisted of 5 tangible items with NFT counterparts for the Metaverse and 4 digital-only items.

👉 Luxury companies can use the capacity of NFTs to function as evidence of ownership for legitimate things such as bags, purses, clothing, and accessories. This allows companies to combat duplication and the overall penetration of counterfeit products.

👉 Moreover, suppose the owner wishes to sale the real fashion item with the token attached. In that case, the buyer can check the item’s authenticity before purchasing since the NFT is visible on the blockchain.

👉 This process simplifies auctions and transactions and makes certification almost unbreakable and ageless.

👉 With NFTs and smart contracts, brands can follow the product life cycle and earn commissions on secondary market sales. For example, businesses could design a commission structure that generates a profit for the original inventor each time the product is sold. However, this use case does not exist in practice.

Access Passes

👉 NFTs could serve as access passes due to the simplicity of authentication and their capacity to verify ownership.

👉 For example, the Flyfish club functions as a membership card to a private dining club, and at the same time, Adidas’s collection grants customers exclusive access to real and virtual products from the brand.

👉 While there are collections whose main goal is to serve as membership passes, this use case is a common thread throughout many collections. All types of NFTs may serve as a form of access pass.

Art

👉 The most common use of NFTs is as collectible works of art. NFTs have enabled artists to sell their work to a worldwide audience while protecting their ownership rights. Art NFTs may be divided into two basic categories: non-generative and generative art.

Generative Art

👉 Typically, when we think of art, non-generative works come to mind. Humans make them without the assistance of an autonomous computer system. Digital artists can post their work in NFT markets, where it may be seen and purchased by anyone around the globe.

👉 Today, artists can only profit from the first sale of their work on the conventional market. NFTs allow artists to include royalties into smart contracts for their work.

👉 This process allows them to get an equal portion of the value of their artwork. An important benefit of NFTs is the ease with which their legitimacy and ownership can be verified, making them ideal for the authentication of artifacts.

Non-Generative Art

👉 Beyond art drawn and developed separately by artists, generative art has been responsible for the growth of art NFTs. Generative art is generated by a computer system, often algorithmic computer software.

👉 Using these tools, users could compile PFP collections like the CryptoPunks and the Bored Ape Yacht Club (BAYC). First, the authors design the specific characteristics, then the computer randomly mixes and generates unique characters.

👉 Some collections are generated by a computer program, with no human involvement beyond the initial creation of the algorithm. The most well-liked Art Blocks series in this region are “Chromie Squiggle” by Snowfro and “Fidenza” by Tyler Hobbs.

👉 OpenSea is the leading marketplace for non-fungible tokens of generative art, whereas LooksRare is a popular recently founded marketplace.

Automotive

👉 Manufacturers may attach NFTs as digital tokens to every product they manufacture and profit from a subsequent resale. For example, suppose a vehicle manufacturer issued non-fungible tokens with each vehicle.

👉 Since manufacturers will earn a portion of the car’s release and resale price, they are motivated to produce high-quality, low-maintenance automobiles.

👉 Regarding the automobile industry, well-known manufacturers also produce NFT digital art collections.

👉 For instance, McLaren Racing Collective is a site that encourages fans to gather all 3D vehicle pieces in NFT form by the deadline. This allows users to get a 3D interactive collectible of one of their renowned automobiles.

Luxury Goods

👉 NFTs can hold all the essential information and serve as evidence of legitimacy due to their uniqueness. However, authenticating expensive products, for instance, could be challenging.

👉 In the wine sector, counterfeit items are prevalent. NFTs could be used to store data on wine. Furthermore, it would simplify the process of wine authentication since each bottle of wine would have one NFT to establish its validity.

👉 NFTs can also serve as ownership certificates. For example, Chateau Angélus sold a non-fungible token for $110,000 in exchange for one barrel of wine and digital artwork.

Sports Collectibles

👉 With a worldwide fan base, sports organizations and leagues implement digital tokens to engage the community and generate additional revenue. Additionally, digital tokens may be utilized as prizes in various sports and fitness applications.

👉 Sports NFTs is a flourishing and expanding use of NFTs. For example, sports NFTs let fans collect their preferred teams and players like baseball trading cards.

👉 NBA Top Shot and Sorare are the two most well-known works currently. This is because both have the proper authorizations and connections with the relevant authorities.

👉 In addition, most sports-based video games allow players to claim ownership of legendary video moments legitimately. Using digital tokens to incentivize individuals to participate in sports is a further suggestion for NFT adoption.

👉 A well-known example is the STEPN app, which offers consumers NFT footwear. Walking, running, and jogging enable players to earn tokens that may be used to upgrade their shoes or purchase new ones. Later, individuals can lease or sell their digital shoes on the in-app market.

👉 Sports teams can use NFTs to engage their fan base by awarding them exclusive digital artworks for activities like game attendance, buying the club’s crypto tokens, and participating in other events.

👉 Another suggestion is to provide fans with unique material about their favourite athletes. The SportsIcon platform, for instance, distributes movies with renowned athletes packaged as NFTs, where fans may acquire insights and unseen tales from a sports star’s life and career.

Healthcare

👉 To improve the security of protected health information (PHI), healthcare institutions often investigate the potential of innovative technologies, such as blockchain. For example, Baylor College of Medicine researchers hypothesize that NFTs might let patients manage their data more effectively and securely.

👉 They propose the development of NFT digital contracts that would enable individuals to define who has access to their PHI and monitor its dissemination.

👉 Such ownership over personal data might assist patients in protecting their confidential information and monetizing it.

👉 NFTs enable healthcare organizations and patients to sell data for research purposes to other parties within the bounds of applicable regulations and common sense.

👉 Pharmaceutical organizations might be interested in such data when they do drug research. In addition, artificial intelligence (AI) development firms that need data for training AI models could use such data. Tokenized blood is another intriguing use of NFTs in healthcare.

👉 The goal is to document all areas blood has visited between its donation and arrival at the hospital. Blood tokenization may enhance blood donor inventories, identify, and resolve shortages of certain blood types in specific places, and avoid human error.

Supply Chain

👉 NFTs could be used to enhance supply chain processes by storing product information in the blockchain, which avoids data loss and illegal modification. In addition, it enables complete tracing of items from their origin to their destination.

👉 Koinearth, for instance, is a business that develops corporate NFTs that allow the supply chain-wide monitoring of physical objects and documents.

Real Estate

👉 There is already evidence of NFTs being used to market virtual real estate. For example, in 2021, a parcel of virtual real estate was sold for a record $2.4 million worth of Bitcoin in Decentraland, a game and online environment where structures are mostly traded.

👉 However, real-world real estate might benefit from adopting NFTs for various reasons.

👉 The tokenization of fractional ownership is comparable to crowdfunding. You may establish a platform that enables investors to purchase NFTs that reflect fractional share ownership.

👉 This notion is still theoretical for real estate enterprises, but many anticipate that real-world instances will emerge soon.

👉 Entire asset tokenization is incorporating real estate into a legal entity and producing a single non-fungible token representing ownership of that company.

👉 This use case is technically and legally hard. However, utilizing NFTs to represent ownership of tangible goods on blockchain networks has become widespread, especially when selling and purchasing real estate.

Ticket Sales

👉 Popular event tickets tend to sell out quickly, and the development of ticket bots has exacerbated this problem. Ticket bots generate approximately 40% of ticketing traffic. Tickets that have sold out are resold on secondary markets for greater rates and this:

➡️ Deprives event organizers of further cash.

➡️ Could result in fraudulent behaviour. An estimated 12% of concert ticket purchasers have been defrauded (e.g., sold fake tickets).

👉 Secondary market activity may be monitored by recording NFT transactions in a public distributed ledger, and rule-based validations can precede NFT purchases. For instance, eligible customers may be needed to have acquired or have a certain sort of NFT.

👉 Consequently, NFTs may enhance the ticketing business by:

➡️ Removing the third-party ticket seller from the artist-to-fan relationship.

➡️ NFTs reduce fraud since they give transparency and authenticity verification.

➡️ Non-transferable NFTs may prohibit the resale of tickets.

➡️ Due to the public nature of the blockchain and its historical record-keeping, platforms may use smart contracts to prevent bots and fraudsters by examining their transaction history.

➡️ A royalty system can be implemented that pays the artist, producer, or any other entity a portion of future ticket sales.