The term NFT is getting hot nowadays. It is probably the reason why you’ve stumbled onto this post. You probably heard of NFT of a picture going for hundreds of thousands of dollars and want to learn more. At the time of this post, NFT is associated with pictures, but it is actually so much more than that.
In this post, I’ll be going over what is an NFT and what are some potential usage for such a technology. Depending on when you stumble upon this post it would either age well or be completely wrong.
Disclaimer: None of what I’m talking about should be considered as financial advice. It is for entertainment and educational purpose only.
What Is an NFT
NFT stands for non-fungible token. It is a unit of data that is unique on a blockchain. A blockchain in this case is a digital ledger that is publicly viewable. This means anyone can see the transactions taking place and who owns what.
Non-fungible means not interchangeable. For example, a house is non-fungible because no two houses are the same.
Another way to think about NFT is similar to a collectible. A first edition is not the same as a common version of something. A limited-edition of something is not the same as the first edition or common version.
What Makes the Technology Important
While the use cases for the technology of NFT aren’t clear, what it enables is important. Before NFT, digital items are always seen as fungible (interchangeable) and difficult to trace. With NFT, the paper trail is completely traceable and is unique. While the appearance of the NFT can be faked, the transactions cannot.
Potential Use Cases for NFT
Now that we have a good idea of what NFT is, let’s explore some potential use cases it can enable.
History Tracking
Anything where you want to know the full history can use NFT to have a fully transparent way to lookup. For example, what kind of repairs and accidents a vehicle was involved in. How many times a house changes hand and what repairs were done. Proving an item is authentic with a record of where it was made and how it got to your hands.
Video Games
Currently, every single hard-earned item in a video game doesn’t belong to you. The game publisher can easily kick you off their game and that’s it. Everything you worked for is gone.
With NFT, each of your hard-earned items would belong to you. You actually own the item and can do what you want with it. Even if you’re kicked off the platform you can trade your items to someone else.
When your gaming items are an NFT it is bound to the owner (you) not the game. This means there are opportunities for games to expand across games. A player can easily bring their items from one game into another game should the game decide to support it. This can enable a new way of gaming where progress from one game is transferrable (fully or partially) to another. Your gameplay hours would no longer be bound to a specific game.
Access Pass
A perfect use case for NFT is with access passes or tickets to an event of some kind. It’s like an upgrade to the existing system for an access pass or ticket at the time of writing. If you bought a ticket to an event and something comes up you’ll try to find someone to sell the ticket to. It is not a trivial thing to do and it requires a third party to facilitate the transaction. If the ticket was an NFT you can easily put the ticket up for sale at a certain price and if someone buys it the transfer of ownership is complete. There is no third party necessary in the process.
Membership Pass
Exclusive membership passes can benefit from being an NFT as well. Suppose you bought a lifetime membership to a service or a club and now you no longer need it. If you want to give or sell that membership you really can’t do that unless you give up your account. It gets messy and the process would be a pain. Now with NFT, it acts as the exclusive membership pass and you can put that up for sale or transfer it effortlessly. You don’t need to give up your account whatsoever.
As of the time of writing (February 2022) NFT is still a new emergent technology. The significance of uniqueness in the digital space is not yet understood. The use cases for NFT are still in the discovery phase. Some of the use cases in this post might come to fruition while others won’t. It’s an exciting time in the NFT space and only time will tell what comes of it.
I hope this post was helpful to you. If you found this post helpful, share it with others so they can benefit too.
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