Why Everyone Will Use A NFT In The Future
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First off, what does the word NFT stand for and what is it exactly?
NFTs and the acronym for “non-fungible tokens”. Non-fungible means that each token is unique in its own way and cannot be used interchangeably. NFTs are non-fungible tokens on a blockchain that each have their own unique identifying codes, so that they are all 1 of 1s. Replicas would not have the same unique identifying code, and would exist on the blockchain timestamped at a date after the original, hence not giving it much validity.
On the contrary, an example of a fungible token is cash.
Let’s say I have a $20 bill in my wallet and Aunt Chelsey gave me a different $20 bill for my birthday. Now I have 2 x $20 bills in my wallet.
When I go to the ice cream shop to purchase a sundae, the cashier is indifferent about which $20 bill I use to make my payment. In addition, I am unable to tell the difference between the $20 bill I had before, and the new one I just received. This is an example of a fungible token, in that the $20 is mutually interchangeable, and can be replaced by another identical item without being able to tell the difference.
Another example would be if we were to both bring 2 bags of rice, dump them into a huge pot, and then mix the pot. If we split the rice into 2 bags each, it would be practically impossible to leave with the same grains of rice we arrived with, nor would we care as they would look identical. In this case, the grains of rice are fungible.
Why NFTs?
Now that you have an understanding of what the word “fungible” means, next we will discuss the many ways in which this technology is primed to change the world.
While NFTs are currently in their infancy and mostly refer to collections of art that are gambled upon like penny stocks, there is a tremendous future on the horizon for the technology.
Below, I will list some of my favorite future potential implementations of NFT technology and how they will affect the way we live. Of course, I can’t list them all and there are probably a ton that we haven’t even thought of yet, but this should give you a good idea why you will inevitably end up owning a NFT someday.
1) Token Gated Access/Community
Currently, one of the main utilities of NFTs has been token gated access. By holding a NFT, individuals are often given access to a community Discord/Telegram or merchandise sale or exclusive offer from that specific project.
As an example, I am the proud owner of a “Veefriend”, a NFT project created by Gary Vaynerchuk. I discovered Gary years ago through a keynote speech I stumbled across on social media. Since then, I have consumed hundreds of hours of content through podcasts, IG, YouTube, etc.
Owning a Veefriend provides me access to a token-gated channel in his Discord for fellow NFT owners, and provides me with a free NFT ticket to “Veecon” for the next 2 years, an annual convention Gary organizes that is only admissible via the NFT ticket. As the ticket is a NFT, I have the ability to either attend, or sell on the secondary market.
In addition, some specific rarer tokens also provide 1 on 1 access to Gary in a multitude of different ways. Of course, those NFTs are valued at a higher price than the others.
I can say that owning a Veefriend has allowed me to connect with many like-minded people who share the same values and passions, and has been a tremendous way for Gary to identify and grow his community.
In addition, owning NFTs to other projects such as Adam Bomb Squad and Creature World have given me access to an online merchandise store for apparel that I wouldn’t have access to otherwise.
Lots of other brands/projects can and will utilize NFTs in the future to grow and reward their communities.
2) Ability To “Flex”
Through human civilization, we have always craved a way to show off our wealth, creativity, and personality. This has happened through the brands we wear, our hairstyles, the cars we drive, the sports teams we cheer for, etc.
However, as we move towards a world that is increasingly digital, the physical items we own become less relevant, and are not exposed to as big of an audience in real life compared to the digital world. How many people per year are going to see the painting you have hung up in your living room?
NFTs help with this as they allow us to own something that can’t be replicated due to its non-fungible nature (despite what people say about the ability to “right click & save”), and display it to everyone anywhere in the world at all times. In 1 simple form, we can prove that we own it, put a price tag on it based on the market, and show it off.
This may seem funny until you evaluate your closet, home décor, etc. Most of us make purchases not because we like the item, but for how we think others will perceive us for having it.
This behaviour will forever be a constant in society. Only the platform in which it occurs will change as technology advances.
Just look at the value of Bored Ape Yacht Club, and how many celebrities bought an ape!
3) Ticketing
In the future, all tickets whether they be for concerts, sporting events, flights, etc, will all be in the form of a NFT.
Given that NFTs are on a blockchain, smart contracts can be implemented to collect royalties on secondary sales without having to go through a centralized platform. This currently already happens for NFTs sold, but would help musicians/sports teams collect a portion of secondary sales made for tickets to their events, something that they don’t currently have the ability to do. Instead, corporations like Ticketmaster who create secondary selling platforms collect all that revenue.
Also, data for ticket purchases and sales can also be tracked to determine more efficient ways to release tickets so that they end up in the hands of worthy fans, instead of professional scalpers with botting systems.
With regards to other tickets like airfare, NFTs allow the opportunity for you to transfer your ticket to someone else without having to go through the refund process with the travel agency. In addition, the travel agency/airline company wouldn’t mind this as it would mean that they don’t have to go through the trouble of trying to resell the same seat. An example of how this would work is through a NFT created for each seat on the flight. Customers would purchase the NFT for an assigned seat, and if they wanted to transfer the ticket to their friend, they could just send them the NFT, without any other parties needing to be involved.
Of course, there are several security concerns in the scenarios listed above, but I wanted to provide basic examples of how NFTs can play a crucial part in the secondary ticketing market that would be beneficial for both organizations and consumers.
In addition, tickets sold as memorabilia for iconic events would be kept in mint condition for generations to come, and continue to benefit the original performer in perpetuity! If you don’t believe there is a market for this, just check out eBay.
4) Gaming
Wouldn’t it be nice to be able to sell or transfer some of the assets that you have either unlocked or purchased in a game to another account? This would include badges, clothing, special weapons/items, skill boosters, etc. Currently, the demand for a market like this is so high that individuals end up selling the username and password to their accounts instead.
A part of why this isn’t available is because the game technically owns the rights and would like for new users to purchase the same items.
However, if companies could build in a royalty fee for anytime a certain item changes hands, they would likely have less of an issue with this type of market. Gamers are also going to be more likely drawn to games that offer this ability, so that individuals can cash in on their hard work building their character/accounts after choosing to move on to a different game.
Just imagine if you could sell the skins you buy or earn in Fortnite or Roblox.
NFTs solve this problem.
5) Asset Ownership/History
In one of the more intriguing potentials to disrupt a significant portion of how business is done today, another NFT utility is the ability to verify asset ownership and review history of transactions related to the asset.
All of this is possible because NFTs are unique 1/1s that cannot be replicated, so once it is tied to a specific asset on the blockchain, it is virtually impossible to copy with any level of conviction. In addition, as blockchains are decentralized and transparent, the complete history of the asset can be viewed by anyone at any time.
Let’s use the example of a car.
Purchasing a used car can be one of the most frustrating processes due to an asymmetry of information available to the buyer. The seller knows the full history of the car and whether it is in good condition, while the buyer is largely at the mercy of the seller and a certain degree of trust, even if due diligence is performed.
However, if the car was tokenized as a NFT on the blockchain, the prospective buyer would be able to see a complete history of the car including when it was first purchased, how many previous owners have owned it, and even potentially what type of maintenance has been completed and the accident history. As these would be data points on the blockchain, buyers can even quickly filter for their specific criteria during the search, making the process a lot simpler.
A complete sales history can also be accessible to determine whether the car you are looking at is priced appropriately based on previous sales.
The same can be done for houses, watches, and basically anything else that has value and a market.
Hopefully you are able to see from the above why I am so bullish on the future of NFTs, and the potential that the technology has in moving society forward.
They are more than just lazy art collections to be gambled upon like penny stocks.
I am of the belief that at some point in the not-so-distant future, almost everyone in a first world country will use NFTs on a regular basis, whether you realize it or not!