Non-fungible tokens (NFTs) have gained popularity through their ability to uniquely define digital items like digital images or in-game assets.
Suddenly, digital artists were able to uniquely identify their art and sell its ownership to collectors. This wasn’t possible without NFTs because there’s no way to prove who owns the original copy of a digital art image. Just imagine the countless copies floating around on the internet, all claiming to be the original copy.
Soon, blockchain developers discovered the larger potential of NFTs. They started looking beyond crypto art and in-game skins. This blog looks at six alternative use cases for non-fungible tokens.
We could see NFTs being used to identify ownership in a company like stocks do. In return, NFT holders receive dividend payments. It opens up the possibility for companies to become more transparent in their earnings and how the earnings are divided among stockholders. It’s not a secret that transparency in business is an upcoming trend. For that reason, NFT dividends might catch on.
A similar use case has been implemented by an investor who bought a digital Monaco racing track in the F1 Delta Time game. The NFT representing the racing track allows the owner to receive 5% dividends from all revenue the track earns through races and ticket fees.
What many businesses don’t know is that they can use NFTs to represent memberships. It’s even possible to represent a lifetime membership by recording the owner’s name with the non-fungible token.
This means that owners can’t transfer memberships, which is something you most likely want to avoid.
An early adopter of this use case is Kraken Kratom, which has minted five NFT images that grant users a lifetime discount or coupon code for their webshop. It’s a fun but interesting use case for NFT technology!
It’s a well-known issue that job candidates list fake certificates or even university degrees to land a new job. The problem here is that recruiters don’t have the time and resources to verify each candidate. It can take up to several weeks to receive a confirmation for an applicant’s degree from a university.
As you can see, the problem here is the middleman, which are schools or certification programs that don’t offer solutions to verify credentials quickly.
With blockchain technology and NFTs, recruiters can quickly verify certifications and degrees. Universities have to register each credential as an NFT. Next, job candidates can list a transaction hash that points to the NFT on their CV. Therefore, recruiters can look up certifications and verify them almost instantly.
One such project that utilizes blockchain technology is Blockcerts. They provide an open standard for creating, issuing, and verifying blockchain credentials. However, they don’t use NFT technology yet and aim to provide users with ownership over their credentials.
In short, NFTs and blockchain technology offer a frictionless system that removes the middlemen.
The ticketing industry struggles with several problems. First of all, some scalpers try to buy as many tickets as possible using bots or other automated mechanisms to resell those tickets for a higher price. On top of that, 12% of people buying concert tickets online got scammed. Most often, it’s not possible to verify the authenticity of the ticket until reaching the event itself.
To solve this mess, NFTs offer a verifiable alternative to conventional ticketing. Anyone can verify who owns the ticket, verify the authenticity of the ticket, and transfer its ownership securely.
However, to prevent scalping, event organizers can choose to forbid the resale of event tickets. More and more events have chosen this path to prevent scalping. With NFT-based tickets, it’s much easier to prevent the resale of tickets to outsmart scalpers.
GUTS is a prime example of a blockchain-based ticketing service provider that wants to prevent fraud and scalping.
Domain names are the next thing for NFT developers to explore. Recently, the Ethereum Name Service (ENS) has minted 25 NFTs representing top-level domains (TLDs) owned by Uni Registry & Naming (UNR). UNR is a domain name system (DNS) company that owns TLDs such as “.click”, “.game”, and “.audio,” among others. To create some buzz, UNR is auctioning 23 of those 25 TLDs.
Besides ENS, Unstoppable Domains is a retailer for blockchain-based domains. You can buy “.crypto” domain names. Instead of renewing the domain name every year, you can buy the domain name once to become its owner.
(Source : OpenSea domain names for auction)
Decentraland is the most well-known example of NFT-based (virtual) land ownership.
Alexandra Marquez from NBC News compares Decentraland with Second Life. “Much like Second Life, Decentraland is an online world that gives users a place to create an avatar, interact with other users and participate in everything from concerts and art shows to building houses on their digital lots. Friends from around the world can gather for events and share a sense of community, even if they aren't physically together.”
(Source: Decentraland blog)
It’s important to know that we can use this technology as well for physical land registry. Yet, it’s interesting to see how well a virtual land registry works. Many virtual parcels are sold for prices ranging between $5,000 and $100,000. Its location within the game primarily determines a parcel's price.
The use cases for NFTs are not limited to the above list. Any use case that requires a property like verifiable authenticity is a possible candidate for NFT-ification. However, adoption is still slow among more traditional industries.
Yet, we see rapid adoption among industries that faced significant issues like the ticketing industry. It’s a prominent example of an industry that benefits from using NFT technology.
At the moment, the art industry is far ahead when it comes to NFT adoption. Recently, an NFT art piece sold for $69.3 million via Christie’s online auction. This auction recorded a new high for an artwork that exists only digitally.