For most people outside the crypto circles, NFTs (non-fungible tokens) are a joke. NFT holders are often seen as gamblers, flipping monkey pictures to the next unsuspecting buyer. The name Non Fungible Tokens (NFT) itself doesn't help, and the fact that personal profile pictures (PFPs) are still the #1 use case of NFTs (such as monkey pictures as Twitter profile) doesn't help either. However, if you take a step back and look at the big picture, you'll soon realize why NFTs will eat the world.
What is an NFT?
At a fundamental level, NFTs are pieces of information that you own but stored in a public database. Think of a database as a giant spreadsheet. Giant spreadsheets rule the world today.
For example, all the data that Facebook stores (your profile pics, list of friends, etc.) can be logically viewed as a giant spreadsheet. Facebook is the gatekeeper for this spreadsheet, and it's not a "public" spreadsheet, but rather a private one. Facebook can kick you out of this spreadsheet whenever they want, and you don't truly own your information in Facebook's spreadsheet.
Without getting overly technical, a public spreadsheet is generally stored using blockchain technology. This article will resist the temptation to delve into the nuances of blockchains. You are free to read the entire contents of a public spreadsheet, but you can only modify the rows that you have ownership to.
How can you have ownership of certain rows in the spreadsheet? By owning keys that allow you (and only you) to change the rows that you own in the spreadsheet. This means you have real and direct ownership of the rows in the spreadsheet. Nobody can kick you out. The technology behind blockchains ensures this.
The Revolutionary Impact of NFTs
Recall that NFTs are pieces of information that you own but stored in a public database. You have real ownership of the NFTs. Nobody can take it away from you. Now let's take a current example of how NFTs are revolutionary.
PROOF is a close-knit community founded by Kevin Rose. It's a community of like-minded people who love collecting art (mostly as NFTs). Think of this community as a modern equivalent of a country club, only much better.
To join an old-school prestigious country club, there is a lot of politics and connections involved. Maybe you need references from other members. Maybe you need to show up in a suit and get "interviewed" by some of the elders of the club. Many people hate politics and drama, and "networking" is not their forte.
However, since the membership of PROOF is an NFT, you can buy the NFT from an existing member who is willing to sell it. The exchange happens in a transparent NFT marketplace like OpenSea. No drama. No reference calls. Just like you can buy a stock of Apple from an existing stockholder of Apple who is willing to sell it.
The price of the membership is determined using the basic laws of economics, based on demand and supply. As long as you can shell out the money for the membership, you are part of the club.
You don't need to have "old money" and pester the "elders" to get in. Why? Because you have complete ownership of the membership . Even Kevin Rose cannot stop anyone from becoming a new member of PROOF. Nobody in the world can, irrespective of your skin color, race, religion, political preferences, etc.
Exploring the Potential of NFTs to Revolutionize the World
NFTs have the potential to change the way we think about ownership and commerce in the physical world.
But where can you use NFTs? What are the NFT use cases? Are NFTs worth it?
We have listed a few examples below to explain how NFTs can simplify and add a lot of value to several real world use cases.
Airline Tickets
With NFTs, airline tickets could become truly ownable, giving consumers more flexibility and control over their travel plans. Instead of a physical or digital ticket, a unique NFT would represent the ticket, allowing it to be bought and sold on a transparent marketplace like OpenSea. This would create a more efficient and transparent secondary market for airline tickets, similar to how concert or sports tickets are currently bought and sold.
Identity Verification
NFTs can provide a secure and tamper-proof way to verify identities, useful in industries such as finance, healthcare, and government. By creating an NFT that represents a person's identity, it becomes possible to verify that person's identity in a secure and tamper-proof way and to store information such as the person's name, date of birth, and government-issued identification number.
Supply Chain Management
NFTs can improve supply chain management by providing a tamper-proof, digital record of each step in the supply chain. By representing each step as an NFT, it becomes possible to track the movement of goods in real-time, ensuring they are produced, handled, and shipped in a sustainable and ethical way. This can increase transparency and accountability in supply chains, making it easier to identify and address issues such as human rights violations and environmental degradation.
Gaming
The gaming industry is one of the most exciting areas where NFTs are making a big impact. NFTs can be used to create unique, one-of-a-kind in-game items, such as weapons, armor, and other virtual goods in video games.
These items can then be traded and sold on the open market, giving gamers a new way to monetize their in-game achievements. It also creates a more engaging and immersive gaming experience, opens new revenue streams for game developers and publishers, and solves the issue of "game-item fraud".
Real-world Assets
NFTs can be used to represent real-world assets such as real estate, fine art, and luxury cars. This makes it easier for people to invest in these assets and increases transparency and trust in these transactions.
Proving Ownership and Authenticity
NFTs can be used to attach a unique digital token to an item, proving its ownership and authenticity. This is useful in industries such as art and luxury goods where provenance is important.
Renting and Lending
NFTs can create a platform for renting and lending physical assets such as cars, designer handbags, and real estate. This can increase access and utilization of these assets and provide new revenue streams for the owners.
Digital Assets and the Creator Economy
NFTs are revolutionizing the way we think about digital assets and the creator economy. NFTs include digital artwork, trading cards, and other unique digital items that can be bought, sold and traded on the ethereum blockchain.
These NFTs can be minted by creators, giving them the ability to monetize their digital creations and establish ownership. NFTs also allow for the creation of NFT collections, adding a new dimension to the ownership and collecting of digital items. Smart contracts on the blockchain enable the buying, selling and trading of these NFTs in a transparent and secure way. NFTs are opening up new possibilities for creators to monetize their work, and for collectors to own and trade unique digital items.
Conclusion
Non-Fungible Tokens (NFTs) have the potential to revolutionize ownership and commerce in the physical world. From proving ownership and authenticity to creating a new market for reselling, NFTs have the potential to change the way we think about buying and selling goods and services. As the technology and infrastructure for NFTs continue to evolve, we will likely see more and more NFTs being used in new and innovative ways.
And Kubera can help you in this journey by helping you seamlessly measure and track NFTs in your portfolio — automatically.
