When you ask people to describe non-fungible tokens (NFTs), they’ll probably describe pictures of monkeys, celebrity art or cartoon characters. NFTs have become so widespread that by now, many people have heard the term, and may even have a basic understanding of what they are. Blockchain, NFTs, and Bitcoin – it all sounds a little confusing. And that’s understandable, because they all share the same technology. So how can we help people stop confusing NFTs for just another term to describe a digital JPEG?
You, being the kind person that you are, thank them for their prudence, pat them on the back, and send them on their way. But not without first explaining a few things about the real method behind the madness. Because you know that–Bored Apes and Beeples aside–the technology of NFTs is much more versatile. And when applied to new industries and coupled with technologies like AR, the possibilities are endless.
What Does NFT Technology Really Do?
NFTs have a use case anytime something in the physical or virtual world is–or needs to be–unique. In the most simplest term an NFT is a digital contract that lives on the blockchain.
This is what enables digital artists and collectible creators to make scarce assets out of JPEGs that can easily be copy and pasted ad-nauseum. And because NFTs are stored in immutable blockchains, they cannot be hacked or duplicated.
But the technology extends far beyond minting and trading digital images. Take identity, for example. While there are a few examples of state-issued digital IDs here and there, there is no standardized mechanism that allows people to create, own, and control digital identities without relying on a third-party provider. NFT technology can be used to create completely unique, cryptographically-secure digital identities that users have total control over. This identity also enables cryptographically-verifiable ownership of intellectual property, patents, voting rights, event tickets, and more.
Beyond identity, NFTs also have a wide range of applications in the commercial world. NFTs tied to both physical and virtual products can be used to verify their authenticity. This is particularly relevant in the world of luxury retail. Take, for instance, the diamond industry: UK-based diamond company Diamonds4Crypto is issuing NFTs for each diamond it sells, allowing customers to ensure its authenticity and providing them with proof of ownership.
AR Takes NFT Use Cases to a Whole New Level
Using NFTs for product authenticity becomes even more interesting and important when it comes to wearables that are available in augmented reality (AR) and virtual reality (VR) settings. For example, Jesus Calderon is a designer who creates and sells virtual watches under the banner of Generative Watches. Calderon’s virtual timepieces–which may one day be worn by people using AR and avatars using VR–are sold as NFTs.
NFTs as virtual objects also have a number of use cases in the gaming world. Virtual weapons, avatars, vehicles, wearables, and even specialized powers can be tokenized, traded, and sold. And as AR and VR gaming continues to become more popular, NFTs will only continue to find more use cases in the gaming world.
And of course, NFTs in the art world are much more than just a novelty or cliché. They are an important tool that artists can use to monetize and enhance their work. For instance, creators who partner with the Hunt’s digital marketplace—which enables them to develop, display, and sell NFTs and augmented reality products—can use NFTs to bridge the gap between physical art and design and the infinite creative possibilities that exist in digital realms like the metaverse. Imagine clothing and footwear that come to life when viewed through an AR-enabled smartphone or other device; think of paintings that become animated with AR technology. You can even use AR to hang digital art on physical walls in your home.
The bottom line is that we shouldn’t be thinking about NFTs as just products, per se – rather, we should be speaking about them as they really are: an important infrastructural element in many industries, both in the physical and virtual worlds. And this is just the beginning.
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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.
Natalia Diaz is the Founder and CEO of The Hunt, a creative marketplace designed to develop, display and sell NFTs and augmented reality products.
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