Since last year, NFTs have been making waves. Cryptocurrency experts, blockchain enthusiasts, and opportunistic investors are equally intrigued and confused about the potential of NFTs. While the attention amassed around this phenomenon may make you think that NFTs are another short-term mainstream trend, its potential to redefine digital ownership shouldn’t be overlooked.
For now, NFTs are mostly associated with digital collectibles. With astronomical evaluations of digital art periodically hitting the headlines and generating substantial public interest, many consumer brands were quick to capitalize on the opportunity. Partly due to the fear of missing out, many brands’ first experience with blockchain development consulting and NFTs was through releasing digital collectibles. While digital art is undeniably one of the most potent fields for NFTs, their truly disruptive business potential lies beyond.
NFTs for business owners are digital tokens that are stored in distributed ledger such as a blockchain and represent ownership of both virtual and real-world physical assets. If an asset linked to an NFT changes ownership, the information about this transaction is immutably recorded on the blockchain. This way, NFTs can be an effective tool for identifying the origin, validating authenticity, and increasing the traceability and trackability of any assets.
Now let’s figure out what industries can benefit the most from NFT market adoption.
In a nutshell, asset tokenization can make supply chains more secure, transparent, and effective. With NFTs linked to real-world objects, all actions regarding these assets can be securely stored on the blockchain. This allows third parties to easily access asset ownership history and verify the authenticity of the item.
For example, Breitling was one of the first luxury brands that started to use NFTs to certify the origin of their watches. Each Breitling watch now comes with a unique digital passport. This allows customers to be sure of the authenticity of the watches and more easily sell them in the future. In essence, NFTs can become a much more convenient and effective version of authenticity cards that many luxury brands still use. Importantly, given that digital passport activation is often done via a dedicated app, brands also have access to yet another way of reaching their customers.
With the record immutability provided by a blockchain, NFTs can also be extremely effective in combating counterfeiting, which is especially appealing for industries like pharmaceuticals. MediLedger, a permissioned-blockchain network for the pharmaceutical industry, is already tackling counterfeiting, and some researchers argue that NFTs can become an effective alternative to traditional track and trace methods.
One of the notorious drawbacks of conventional real estate investing is the colossal amount of paperwork it takes to close a property deal. With tokenization of ownership enabled by NFTs, property trading becomes much less cumbersome.
For example, owners can link NFTs to their properties, then divide them into multiple tokens, and allow multiple parties to buy parts of the property, which makes NFTs especially suitable for fractional property ownership. Most notably, these tokenized fractions of property can also be used as collateral for loans. This is exactly what Propy, a real estate transaction management platform, and Helio Lending, a crypto loan provider, have partnered to achieve. In a macroeconomic sense, such initiatives allow more people to invest in real estate and more easily access capital.
Once digital tickets took over physical ones, it seemed that there won’t ever be a point in looking back. However, both consumers and event organizers had to learn the inherited disadvantages of paperless ticketing the hard way.
Scalping is undoubtedly one of the most annoying realities that modern consumers have to face when trying to get tickets. Scalpers buy large amounts of tickets for a specific event at once and then resell them at absurdly inflated prices on secondary marketplaces. However, there is little to no motivation for ticketing platforms to stop scalping. Some of the wrongdoers go even further and sell fake digital tickets that look exactly like the real ones.
With the help of ticket tokenization, artists, organizers, and attendees can prevent fraudulent activities like scalping and make ticketing more transparent. For example, event organizers can set a limit on a ticket price, so that a ticket could never be sold at an unreasonable price. This effectively defeats scalping and makes secondary markets fairer. If artists choose to do so, NFT tickets can be configured to be non-transferable.
The NFT space and Web3, in general, remain confusing for many. Right now, it’s time for brands to experiment with these new concepts and technologies and see what can potentially provide value for them and their customers. NFTs’ ability to extend real-world products and experiences into the digital realm can’t be overlooked. As both businesses and consumers wrap their heads around these new concepts, the true potential of NFTs for enterprises is yet to be unleashed.