Non-Fungible Tokens Are More Than Just Digital Swords and CryptoKitties

When it comes to tying together two burgeoning technology spaces, there is a lot of excitement around what Non-Fungible Tokens (NFTs) can do in the gaming space.

A prized digital sword, or sturdy shield as an NFT is unique, but also tradable or transferable. These blockchain assets seem almost purpose-built for gaming in creating unique digital assets, but they can do so much more.

The power of NFTs is no longer confined to digital collectibles in the gaming sector. Instead, applications of NFT across other industries, for example, supply chain and luxury goods, are rapidly emerging as powerful solutions to complex problems.

CryptoKitties was the first to burst onto the scene, but the gaming space is only one arena where NFTs can shine. In principle, having a unique, digital, transferable asset that is blockchain-based has the potential to disrupt the supply chain, energy sectors, sports, telecoms, luxury goods market, and media & entertainment industries.

Gaming collectibles are low hanging fruit for NFTs, but with a little more forethought and practical thinking, NFTs can become unique assets that ensure provenance and limit fraud and counterfeits for luxury items.

Tokenizing assets with NFTs allows for supply chains to be made more secure, efficient, and pliable. Assets in a supply chain tied to NFTs will lead to enhanced traceability, definite proof of ownership, and ultimately improve revenue growth.

What are NFTs (Non-Fungible Tokens)?

Seeing gaming take the lead with NFTs as the space experiments with unique digital assets is promising, but there is more to it than that, and with this greater potential there is also a bigger scope for their implementation.

Non-fungible digital assets exist and are widely used today, but it is the inclusion of blockchain technology that adds this new level of digital opportunity.

Domain names and Twitter handles are all non-fungible assets, but NFTs, with their ability to be transferred and tracked on the blockchain, without being mutually interchangeable, is what works for gaming, as well as an assortment of other sectors.

A non-blockchain, non-fungible asset, lacks the power of tokenization that comes from blockchain technology. NFTs ensure ownership and are fully in the control of the user who possesses them.

But probably the biggest difference from an NFT to a non-fungible digital asset is the power to transfer most often has some sort of open market attached to it.

Additionally, the power of blockchain to verify tokens means there is an immutable authenticity that guarantees the authenticity of assets, without the need for a central figure to confirm.

These three factors — ownership, transferability, and authenticity — lend themselves perfectly to the gaming sector as we know it today. Many games have digital assets that people want full ownership over, but with the possibility of trading on a market. But, the fact that there is so much fraud in a digital asset space, people also want to be assured that the item is authentic.

Benefits of NFTs

• Digital Assets (NFTs) enable the creation of rare & unique assets that can’t be destroyed, replicated, or forged
• NFTs can be tracked on the blockchain, providing an immutable history of the assets
• NFTs cannot deteriorate over time. So when utilized in applications such as digital collectibles they do not deteriorate like their physical counterpart
• Peer-to-peer, secure trading enabled by blockchain technology
• NFTs can be sold and traded/exchanged back into Fiat

NFTs outside of the gaming space

Sports collectibles

The NFL and the NBA have both dipped into the NFT space seeing them as a way to bolster fan engagement through the issuing of digital ‘player trading cards.’

By utilizing NFTs, teams and organizations can create their own in-game assets, trading cards, and other types of blockchain digital collectables for sports teams to coincide with their own marketing initiatives.

Results are easily traceable as each one has its own identifier that makes it unique to its owner.

Benefits of sports collectible NFTs :

• Unique memorabilia
• Easily digitally tradable
• Creation of a new revenue stream / digital economy for the sports team
• Ensures provenance of real-world sporting assets

NFTs in Supply Chain

But, moving away from games and collectibles, NFTs are another string in the bow of blockchain technology’s tech that is already flourishing in supply chain management.

Adding NFTs to the blockchain supply chain means goods can be individually authenticated, and this was proven by high-end fashion brand, Louis Vuitton.

In 2019, popular fashion brand Louis Vuitton unveiled its plans to launch a blockchain platform that would use non-fungible tokens to authenticate the provenance of high-priced goods. These tokens can be used to identify and trace the entire supply chain journey of a Louis Vuitton handbag or any other unique product.

Benefits of NFTs in Supply Chain :

• Removal of counterfeits
• Secure traceability
• Ensure uniqueness and maintain provenance

NFTs in Identification

Another area that lends itself to NFTs on the highest level is probably identification. When it comes to uniqueness, there is only one you, and the need to authenticate you digitally is a problem that plagues our world today.

This is why tokenizing yourself with an NFT can be such a powerful solution to the digital identity issue that blockchain is trying to solve.

NFTs that are linked to your identity allows many different possibilities from the transferring of personal, unique, and secure data, to using tokens that are uniquely tied to your identity to prove ownership of cars, homes, gold, and more.

Benefits of NFTs in Identification :

• Broad blockchain application in everyday lives
• Secure ownership of personal data
• Proof of ownership linked to individual NFT
• Connecting different IT systems. From banking and health records to government-issued documents… e.g. one identity utilized across different software solutions.

Media and Entertainment

Fraud and illegal copying is another area of concern in the media and entertainment space. The cost of online media piracy is expected to hit $52 billion by the year 2022, this is double what it was in 2016.

But, by appending legal copies of films, music, and other pieces of content to NFTs, the arena for piracy can be greatly diminished as legal copies are secured, owned, and traded efficiently on the blockchain.

Benefits of NFTs in Media :

• Elimination of online media piracy
• Proof of provenance
• Transferable true asset and valid ownership of media

Why use NFTs in your Sector?

As explained above, the power of NFTs is no longer simply about digital collectibles in the gaming sector — although that is still a powerful solution. This solution is also proving its worth in places like the sporting realm.

The NFL, NBA, and even F1 are reaping the benefits of NFTs are benefiting from a new way to engage with fans, based on an outdated trading card model, all while creating a new revenue stream and active digital trading card marketplace.

But for companies already looking into the power of blockchain, the use of NFTs adds another edge to the potential of the technology, especially when there is a need for uniqueness and provenance.

Companies are losing billions of dollars to counterfeit goods and sloppy supply chains, but blockchain, and especially NFTs can secure uniqueness, prove ownership and authenticity and save companies money in the process.

Four Steps to creating your own NFT

Creating NFTs for your business is made a lot easier and more obtainable through enterprise blockchain solution provider, Protokol. As well as bespoke blockchain development and consulting services, Protokol provide an easy-to-follow four-step guide to getting started on building your own digital assets here with an NFT tutorial.

Utilizing the ARK Core blockchain framework, as well as Protokol’s developer tutorials with code snippets and diagrams, the creation of an NFT that is set up to start from the genesis block is simple and practical.

You’ll learn how to:

• Register a new digital asset collection (e.g. register a range/type of digital asset)
• Create new digital assets (e.g. issue a new NFT for each unique item created)
• Transfer and trade digital assets
• Burn digital assets

If your business needs help in creating an NFT solution, Protokol has a range of services and solutions available to help. From digital advisory to blockchain development, and custom solution development. Find out more at protokol.com or book a consultation with one of our experts.