While the majority of digital art NFTs (non-fungible tokens) available today might seem like extortionate JPEG files, there is no doubt that NFTs are here to stay. Collectible NFTs, simple profile pictures, and other forms of digital art are just the tip of the iceberg.
If you have no idea what an NFT is, then we’ve got your back.
What is an NFT?
The term NFT stands for Non-Fungible Token.
In simple terms, NFTs are digital files that are stored on the blockchain. They cannot be copied, substituted, or divided. The most fundamental NFT use case is that it can prove ownership.
If you own NFT art, the underlying blockchain technology proves and verifies that it belongs to you. This means you can sell it just like you can a digital token.
While the initial NFT hype was around promises and potential, the exclusive properties of NFTs will empower them to radically disrupt entire industries.
The digital collectibles of today might not be as popular in the future — in fact, unless they’re hosted on IPFS or a similar decentralized storage service, then they may not exist at all. Those that do survive could maintain value as retro collectible NFTs, but they won’t be able to compare with the utility of up-and-coming NFTs.
If you asked somebody a year ago about non-fungible tokens, they would have either not known what you were talking about, or told you they were worthless junk. Even today, many skeptics remain, but interest is steadily growing and there’s a clear trend towards utility. NFT use cases are emerging and this is where they become game changers.
So what are some of the use cases for NFTs?
NFT Use Cases: Top 10 NFT Ideas
From the gaming industry to the real estate industry, NFT solutions are becoming more and more accepted. As an emerging technology, the full nature of this groundbreaking concept will only become apparent in the years to come. For now, we can speculate based on the disruptions that are already happening.
Let’s take a look at the top 10 cool NFT ideas that are here to stay.
1. NFT gaming
The gaming industry is booming. Not only is it thriving, but millions of people are already buying digital goods to use in games every single year. The only difference is they don’t own them.
Applying the NFT solution to the gaming industry means that users can truly own their in-game items. This is one of the NFT use cases that appears to be gaining the most traction in terms of mainstream adoption. Popular game companies like Ubisoft have already integrated NFTs in some of their games and have plans to do it much more in the future.
This bold move is despite the backlash from non-crypto gamers who dislike the idea of NFTs in their games. Nicolas Pouard, VP at Ubisoft’s Strategic Innovations Lab, said that gaming is going through a “paradigm shift” and that NFTs are “really beneficial [for the players], but they don’t get it for now.”
The main draw for the use of non-fungible tokens in games is that it gives power to the players and enables them to earn from playing. This innovative approach to the gaming world has already seen huge success with Axie Infinity being played as a full-time job by Filipinos during the 2020 lockdown. The play-to-earn model of NFT games is revolutionary for many reasons. Games can be about more than just having fun, they can also earn you a living — literally.
NFT gaming is also popular because of the trading element associated with it. For generations, gamers have loved to collect and unlock rare game items. Even in recent iterations of games, such as Call of Duty and FIFA, the desire to unlock rare items is still ever-present. In FIFA: Ultimate Team, for example, you can open packs and potentially get yourself a legend like Pele, Ronaldinho, or Zidane. You can sell these on a secondary market to earn in-game coins that can only be used to buy more packs or different players. Wouldn’t you rather be able to sell them for real money?
With NFTs, you can.
With NFTs, you literally own your items and the proof is on the blockchain. With ownership comes the right to buy, sell, or swap. This hearkens back to the days of trading Pokemon cards. No longer will big gaming companies rinse you dry and leave you unable to recoup your investment from in-game items. You can sell them when you’re finished with the game and potentially even make a profit.
Now, imagine an online game where you can play with your digital assets. With recent advancements in blockchain technology, it’s possible for your NFTs to evolve over time. Sometimes this is referred to as NFT 2.0.
Going back to the Pokemon example, imagine if your Pokemon could evolve through experience and more play time. It could go from Charmander to Charmeleon to Charizard, simply through playing the game. This is the essence of NFT 2.0 and play-to-earn NFT games. Not only can you buy and sell your NFTs, but they gain more value the more you play.
Some of the best NFT blockchain companies are working in the gaming sector to innovate and create new types of NFTs. Keep in mind that despite being one of the most promising use cases for NFTs, these NFT platforms are still very early in development and adoption. The NFT space is relatively new and poised to grow.
2. DeFi NFTs
Not all NFTs are about digital art. One of the most innovative non-fungible token use cases that keeps in theme with Bitcoin and the original purpose of cryptocurrency is DeFi NFTs (Decentralized Finance Non-Fungible Tokens).
There are plenty of examples of NFT applications within DeFi already. These types of NFTs provide crucial financial benefits. They may come with artwork too, but due to the emerging technology of smart contracts, their main draw is utility.
To use an example from the DeFi ecosystem of Elastos, you can use your Phantz NFTs to get staking bonuses on Glide Finance. By holding Phantz NFTs, you can get a boost of up to 28.22%!
However, NFT use cases in DeFi don’t stop there. CreDA uses cNFTs, i.e. Credit NFTs. Their NFT model means you can have a credit score on the blockchain, through which you can enjoy privileges such as low-collateral or even collateral-free loans! In the future, the CreDA team aspires to enable real-world credit scores to affect your ability to take out decentralized loans without collateral.
These are just a few of the innovative ways in which decentralized applications, particularly in DeFi, can integrate NFT use cases. None of this would be possible without the powerful technology behind NFTs.
3. NFTs in the metaverse
The gaming industry overlaps a little with the metaverse — it’s similar in many ways. Metaverse NFTs won’t just be limited to virtual avatars though. There are now plenty of options for digital real estate in the metaverse too. Virtual worlds are being divided into land parcels that you can purchase as NFT items.
Digital real estate empowers gamers to own specific parts of the metaverse world that they’re playing in. It brings an entire ecosystem to life by creating in-game currencies with real-world value. The NFTs of virtual worlds will hold unique and exclusive properties that allow you to rent your digital space out to marketers. While this might initially sound ridiculous, big brands are eager to display their products or services in a virtual world that will be accessible by millions of potential customers.
This means that NFT owners can earn passive income from owning virtual real estate. The digital scarcity applied to NFT tokens ensures that there is a limited number of digital assets available in any given virtual world. This incentivizes trading as people will have to buy their desired digital assets from NFT marketplaces once the initial allotment has sold out.
As more and more people enter a specific metaverse, the land that most people will see first becomes more expensive and more appealing to marketers.
4. Private membership experiences
One of the earliest NFT use cases to be created was exclusive access to specific communities. Just as Clubhouse was once an invite-only social media platform for the rich and famous, NFT collections have been used as entry tickets to exclusive communities. The ownership of the NFT tokens can be verified on the blockchain, therefore it’s impossible for somebody else to gain access to the community without the specific NFT.
While the image may be replicated, this interesting use case can’t be without proof of NFT ownership.
Not only could NFTs serve as an entry ticket to exclusive communities, but they can also be used to access premium experiences. For example, Gary Vaynerchuk recently opened the world’s first NFT restaurant…
Membership to the restaurant — known as Flyfish Club — can only be purchased as an NFT. By ownership of one of their officially minted NFTs, you can receive a private dining experience at the restaurant.
This type of membership empowers anybody to join if they have enough interest and money, unlike invite-only platforms or communities in which you have to know somebody who knows somebody to be a part of the crew. The good thing about this is you can also resell your membership NFT, possibly even making a profit if interest in the club has increased. You don’t need to know the buyer. They can be anonymous and still receive the perks of the non-fungible token use cases.
This type of model can be replicated by other experience-based businesses too. Upcoming NFTs may disrupt the monthly membership fee model that currently exists.
5. Data ownership
How would you like to verify that you own your username across all socials? In fact, you won’t even need a different username for each social, because once you own one and it’s linked to your decentralized identity, then you can automatically use that to log-in for all your other socials.
Check out our post on digital identities and DIDs here to learn more about this fascinating technology and how Elastos is paving the way for a decentralized web 3.0 (or if Jack Dorsey has his way, web5).
To go into a little more detail, you can effectively own your own identity online. This is already possible on Elastos with their DIDs. You can also register the name of your crypto wallet so people can send you things more easily.
One of the NFT use cases linked to digital identities is that of birth certificates and other forms of identity verification. It will be possible to issue NFT birth certificates to newborns. This could be a huge step in preventing identity fraud in the digital future.
NFTs can also be used to store sensitive medical data in a safer way than a hospital’s centralized database. You could verify a patient’s medical information without compromising its confidentiality. The most important thing is that you own your data.
In the case of DIDs, which use the same underlying technology as NFTs and cryptocurrencies, something known as a zero-knowledge proof plays a major role. Zero-knowledge proofs allow you to verify something — your age, for example — without ever revealing what your actual age is. The person running the check will never know your private information.
By implementing these types of NFT use cases, we can create a decentralized internet that gives power to the people.
6. Events and tickets
We already touched upon the way NFTs can be used to join exclusive communities, but what about regular events and tickets? Just like how culturally important ticket stubs can now sell for astonishing sums, an NFT representing a ticket may be kept and held onto if the event has significance.
One of the most obvious NFT use cases is to digitize and simplify processes. In the case of ticketing, a regular paper ticket can get damaged or lost. NFT tickets are available on your phone, so long as you don’t lose your password — but as mentioned above, NFTs are also making it easier to have just one log-in for all accounts. Even losing a password will become far less likely on web 3.0.
Additionally, NFT tickets are cheaper to produce and less time-consuming than their physical counterparts. They can also have a royalty fee built in so that the NFT ticket seller can perpetually earn from the event long after it’s over.
Not only are NFT tickets digital replacements of physical assets, they are also sufficiently technologically superior to be able to counter fraud. With blockchain technology, it’s possible to verify ownership and create digital scarcity. For instance, if a venue only holds 1,000 people, it can be guaranteed that there are only 1,000 tickets. No more overbooking. No more counterfeit tickets. Only the 1,000 NFT owners will be permitted to enter.
This would also work on public transport to streamline the travel industry. Take plane tickets for example. Wave goodbye to the days of waiting hours for airlines to give you your boarding pass, or accidentally overbooking your flight. Passengers will be given an NFT, scannable by a QR code and traceable on the blockchain. If you have your NFT ticket, you can rest assured that your journey is guaranteed. If the flight is canceled for whatever reason, the NFT could still be valid for the rearranged flight — or swappable for one that is valid.
7. Music
The main advantage of NFTs in the music industry is that it cuts out the middleman in terms of royalties. Every time the NFT changes hands, the musician receives the royalty automatically. Royalties are programmed into the smart contracts and therefore impossible to interrupt. There will be no delay in receiving the funds either.
Strictly speaking, this doesn’t just apply to music. Authors will be able to receive royalties too. And that Ebook you bought? You can sell it once you’ve read it. This is the beauty of NFTs.
But going back to music, there are plenty of other advantages of utilizing NFTs. Many of the benefits of NFTs in the music industry overlap with ticketing and exclusive communities. This is because the ownership of an NFT can grant “backstage” passes and other forms of interaction with fans. It brings a new wealth of experiences that were a lot more difficult to organize before.
NFT buyers may also be able to receive additional benefits from their favorite music artists too. For example, there are several musicians who are giving a percentage of their streaming proceeds to their NFT owners. One of the most recent musicians to adopt this tactic is the rapper, Nas.
He launched NFTs for 2 of his recent songs, “Rare” and “Ultra Black”, with three tiers of streaming royalty ownership. If you own one of these NFTs, you earn a cut every time that song is streamed. The funds are released to your wallet intermittently.
By partnering with Royal, Nas and other artists are able to leverage the technology of NFTs to bring themselves closer to their fans.
8. Supply chain
There are a myriad of problems when it comes to the supply chain industry, particularly within the food sector. In an increasingly distrusting world, people want transparency. Right now, it’s impossible to verify where things come from. We have to trust that big businesses are honest. With non-fungible tokens, we can trust code – not corporations.
One of the most game-changing NFT use cases, tracking goods by minting a digital equivalent can solve tons of problems in maintaining the authenticity of supply chain data. VeChain and OriginTrail are two of the largest projects that are focusing on this particular NFT solution.
Imagine being able to verify exactly when and where each and every ingredient was sourced simply by checking the supply chain data stored on the NFT. You’d be able to open your fridge, pull out an item of your choice, scan the packet and have all the information you need. This would also apply with products such as wine that tend to increase in value as they age.
Equally, this will work with shoes, clothes, artwork, and practically any other product that is moved from place to place before being sold.
9. Digital art museums
The Seattle NFT Museum opened in January 2022. It’s the first museum of its kind to exhibit only digital art NFTs, or “blockchain art”. The co-founders, Jennifer Wong and Peter Hamilton, said “Digital art pushes the boundaries of physical space without the limitations of mediums and materials.”
The Seattle NFT Museum isn’t the only way that NFT art can be displayed in an exhibition format however. There are plenty of websites, particularly for special events, that host exhibitions of NFT art.
One of the more recent topical examples of NFTs on display is that of Ukraine’s “Meta History: Museum of War“. Strictly speaking, it’s more of an NFT collection than a museum, but when you boil it down, what’s the difference between an NFT collection displayed in one place, and an NFT exhibit? Not so much.
As NFT use cases expand and merge with virtual reality technology, there will be many possibilities for digital art museums that you can access via an NFT in an immersive virtual world. You’d be able to view NFTs in virtual worlds and trace each of them back to their original owner.
Crypto Punks and other popular NFTs are already on display in Seattle. How long until Phantz, Bellas and Bunny Punks are on display too?
10. Real estate
While we’ve covered virtual real estate, NFT use cases extend to actual real estate too. Imagine how simplified and streamlined the process of buying or selling physical property would be if all your deeds were in the form of an NFT that was tracked and traced easily by the blockchain.
There would be no need for lengthy bureaucratic dealings that take many months to complete. It could all be as simple as transferring an NFT deed from one wallet to another. For a breakdown of the best NFT wallets, click here.
NFTs replacing paperwork is inevitable. However, it must be said that it may take several years for this to come into effect as the global awareness and acceptance of NFTs must come first.
There may also be difficulty at first in transferring files from the real world to the digital world. It could be a very time-consuming effort that may postpone the adoption of this specific NFT use case. Nevertheless, when its time does come, it will certainly improve the traceability of real world assets.
Honorable mentions
There are too many potential NFT use cases to mention, and many cross over with each other, but here are a few others to consider:
- Democracy. Voting with DIDs and/or NFTs will be a private, secure and tamper-proof way of ensuring an authentic democracy. Check out our post on decentralized autonomous organizations for more info regarding this topic.
- Government accountability. By making government data and actions transparent and easy to trace on the blockchain, we can restore trust in authority.
- Cutting out the middleman. Just like how peer-to-peer networks cut out a single central point of failure, NFTs and blockchain technology will enable us to cut middlemen in every industry. This was touched upon with music, but also applies to all creative arts and all marketplaces (from used cars to books to accommodation, and everything in between).
Mint your NFTs on Elastos
With Elacity, Pasar, and Vitrim, there are plenty of NFT marketplaces you can explore on the Elastos Smart Chain (ESC).
As mentioned earlier, Phantz and CreDA’s credit NFTs already integrate DeFi. Profile, a decentralized type of social media, will soon enable private communities for specific NFT owners. The BunnyPunk team is busy building BunnyHop, an NFT platform that will allow users to stake their NFTs in order to earn a token. In the not-too-distant future, the Elien NFTs will be able to be staked in order to earn VitX, the native currency of Vitrim.
These innovative NFT ideas have spawned over the last several months, and it seems certain that more will come soon. Just this month, three new collections launched on Vitrim: The 2821 Club, Galactic Shapeshifters, and Mythic Beings.
Who knows where tomorrow will take us?
This article was written by Matt Leppington
