NFT hype peaked in 2021, with record sales and celebrity promotion, however, market and global attention declined throughout 2022 as trading volumes and floor prices fell, a downturn that led some to question the applicability of NFT technology itself.
However, NFTs are far from dead, and their development continues, albeit in a less speculative direction than provocative digital art. Now, more functional types of NFTs are emerging, with some industries using them for gaming, virtual real estate, tokenization of physical assets, and more. In this article, we’ll look at some of the applications of NFTs and why they are far from dead.
Different people have different preferences - NFT
Non-fungible tokens (NFTs) simply mean that the tokens are unique, ownership is recorded on the blockchain, and unlike other digital currencies, all tokens are different and cannot be exchanged one-to-one for any other token.
As big brands and organizations join the hype, some are also testing NFTs in other settings, let’s see where we can find our beloved NFTs.
NFTs as Profile Pictures - PFPs 🐸
Profile picture NFTs refer to users who customize their profiles based on hobbies, interests, and perhaps a desire for recognition and belonging. These digital communities allow individuals to make new connections online based on their interests, and one could argue that they help society express itself creatively.
The trend started with two pioneering projects: CryptoPunks and Bored Ape Yacht Club (BAYC).
CryptoPunks started out as free tokens and are credited with giving rise to the concept of generative art NFTs with PFP properties;
BAYC developed this idea and implemented a random generation feature centered around its community.
How to set your NFT profile picture on X?
Here’s an example of setting an NFT profile picture on X. Once you own X Blue, setting an NFT profile picture is pretty straightforward:
Navigate to Edit Profile: Click on your profile picture in the top right corner to access the drop-down menu;
Select "Select NFT": Click the "Select NFT" button in the menu;
Connect your wallet: Link your wallet (e.g. MetaMask) to your profile;
Choose your NFT: Select the NFT you wish to use for your profile.
Music NFTs 🎶
Music is loved by the public, which is also the reason why the emerging music NFT is popular. The traditional music industry has multiple levels of intermediaries, which hinder the economic and creative independence of artists. Music NFT proposes a new distribution and sales concept, which provides artists with higher income and increases direct audience engagement by reducing the number of intermediaries.
It enables musicians to release a limited number of digital albums that fans can own, so for artists, releasing these partial digital content that can be sold at a higher price will add another source of revenue.
Which platforms are involved in Web3 and music NFTs?
Audius: A decentralized streaming service that works similarly to Spotify but runs on the blockchain, allowing artists to earn more by topping the charts without the huge commissions that the platforms take.
Physical Digital NFT 🏋
Physical digital assets or physical digital NFTs are products with two sides, the NFT part and the tangible counterpart in the real world, this pairing means that any item can be easily proven to belong to someone, without a doubt, because all the information is reliably saved on the blockchain.
Several initiatives (including some still ongoing) are working on technologies to support physical digital assets. For example, some companies have implanted NFC chips in items, allowing blockchain to be incorporated into them. These chips ensure that people can access the details of the items and verify ownership through them, thus establishing a real world/virtual world connection.
Proof of Presence Protocol (POAP) NFT 🔔
POAP is an NFT that proves someone was present at an event, it is often used at conferences, concerts and any other important event to prove someone was present at an event, the system not only records attendance but also celebrates an item that may have nostalgic significance, even if it is not a collectible to some people.
Show your POAP
Essentially, POAPs are used by platform users to prove their activity in events and communities, and they are an online way to brag about having attended a major event that could be the next big thing.
Using POAP as a Ticket
POAPs are used similarly to tickets and can be used to enter specific events or communities, they can also be used for entertainment, and POAP holders can enter a raffle, with each specific POAP providing one entry.
How does POAP serve event organizers and attendees?
From an event organizer’s perspective, setting up POAP is simple, with organizers visiting the POAP website, creating an event, and then selecting the digital badges attendees will receive.
The badge is a token attached to the blockchain system, through which participants can accumulate tokens and store them in their wallets.
On the other hand, the event site will provide participants with a unique collection code for receiving a digital badge, which will not only be a validator of attendance but also serve as a souvenir, enriching the value of the user experience.
Fine Art NFT 🧑🎨
Fine art NFTs are truly nuanced works that stand apart from the rest, and NFTism is a new word that relates to the community and culture surrounding NFTs.
The idea of NFTs therefore caters to some of the concerns that artists have about cloning artworks and sharing cloned works without mentioning the creator or paying the artist.
Essentially, using NFTs makes artworks unique and limited digital works that, like traditional artworks, can only have one legal owner at a time. It helps increase the credibility of digital art as a collectible and provides artists with a new approach in the new and complex digital art market.
How to appreciate or display digital collections?
Currently, available digital collectibles, including NFTs, can only be viewed on devices such as smartphones or computer monitors, however, the greatest hope lies in the maturing of AR headsets and other devices capable of projecting holograms into physical environments, making it possible to design digital art in 3D like real sculptures.
Gaming NFTs
NFTs have huge potential to disrupt the gaming industry as they make it possible to own actual in-game assets, for example, consumable items purchased in a game can be resold or traded like tangible goods.
This could apply to games such as World of Warcraft (WoW), where individuals can own, sell or trade their assets in the game without referring to the game developer's policies.
NFTs enhance the engagement and personal experience of gaming by owning exclusive assets and potentially participating in game development. For example, obtaining unique items can impact the gaming experience. Additionally, when players can provide some input to the game, even if it’s small, it makes them feel like they are part of the gaming experience, not just someone playing the game.
The trading and ownership of assets in NFT games is waiting to be accomplished using blockchain, and many NFT games contain some aspects of the cryptocurrency mining process and use gaming activities to mine tradable digital currencies.
Event Ticket NFT 🎫
The application of blockchain in ticketing means that tickets will be created as non-fungible tokens, making each ticket unique and easily traceable, which will provide artists with a way to earn a percentage of sales from the secondary market as scalpers will be unprofitable due to the reduced markup.
What problems does the current ticketing system face?
The old-fashioned ticketing systems are mainly operated by monopolies such as Ticketmaster that control the market. These service provision systems are usually associated with high convenience fees, which customers need to pay for each transaction, whether they are regular users or scalpers.
On top of that, the platforms don’t offer artists a cut of the profits from ticket resales — a share that could reach disproportionate levels.
With event ticket NFTs, the resale price of tickets can be controlled and artists can receive the remainder of any higher ticket price. This model reduces the appeal of reselling because artists will receive a share of subsequent sales. The new system will be used to provide financial support to artists and manage ticket prices for fans.
Identity NFTs
The current identity verification system is far from perfect and involves scanning and sending copies of personal identification documents, passports or bank statements to requesters, and how these documents are processed or the legitimacy of these documents is sometimes questionable.
On the other hand, manipulating a PDF or JPEG with false details is not complex and does not mean it is completely trustworthy.
Therefore, NFTs are created to be immutable, which means that any alteration or counterfeiting of the digital token is impossible, a feature that makes NFTs perfect for representing and protecting personal identity.
However, we are not there yet because the digital environment poses certain difficulties in ensuring the trustworthiness of authentication, whereas traditional physical tokens such as ID cards or tickets utilize security feature systems such as holograms or signatures.
Challenges of Mass NFT Adoption
While many use cases for NFTs demonstrate their potential to revolutionize digital ownership, their current form may not be sufficient for mass adoption, and the technology still faces several challenges that hinder its widespread acceptance, including:
Complexity: Many potential users find the process of buying, selling, and storing NFTs too complicated;
Environmental issues: The energy consumption of some blockchain networks raises sustainability issues;
Regulatory uncertainty: The lack of a clear legal framework creates risks for both creators and buyers;
Volatility: The speculative nature of many NFT markets may deter risk-averse consumers and investors.
In order for NFTs to gain mass adoption, technology will need to evolve to address these challenges, which may involve developing more user-friendly interfaces, transitioning to more energy-efficient blockchain solutions, developing clearer regulations, and creating NFTs with tangible real-world benefits or utility.
Bitcoin NFTs on Bitfinity
Looking back at recent history, we see that the massive NFT trend has emerged as a new form of experimentation on the Bitcoin blockchain, with projects such as Bitcoin Ordinals and Runes allowing images, text, and other media to be inscribed on specific satoshis, creating digital collectibles and assets with proof of Bitcoin ownership.
This is where Bitfinity comes in, by introducing the Ethereum Virtual Machine, Bitfinity EVM making it compatible with ERC-20 tokens and all Dapps on Ethereum to Bitcoin, Bitfinity can open up a whole new world of NFT experiments in gaming, decentralized finance, and more.
For example, popular Ethereum NFT applications or collectibles could be seamlessly bridged to Bitcoin while still using smart contracts for governance and royalty collection.
Bitfinity provides the infrastructure and tools to make Bitcoin programmable at scale, which enables developers to leverage Bitcoin’s unparalleled security and liquidity while building censorship-resistant decentralized applications using one of the many new use cases for NFTs.
in conclusion
It’s fair to say that while NFTs have waned in popularity, ownership of digital assets offers more new opportunities than one might imagine, with new possibilities emerging in how scarcity and ownership of digital assets can be proven and secured on the blockchain in some major industries such as art and entertainment, real estate, and of course finance.
It’s hard to say how long it will take for NFTs to become part of mainstream consumption, but if it depends on getting onto the Bitcoin blockchain, then with the advent of Bitfinity, that process will happen quickly.
#cryptopunks #BAYC #Audius #NFT
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