What is the future of NFTs and their top trending applications?
NFT is a powerful technology that allows people to create digital scarcity without a centralized intermediary. Like Bitcoin, NFT relies on blockchain technology and has a rarity. However, while we can distribute Bitcoin in large numbers, only one we can use undividable NFT.
So far, NFT has been useful primarily as proof of the authenticity of digital artworks. However, its use has evolved rapidly, and now it can provide proof of ownership and special access to VIP benefits, limited content, and specific asset rights. In this article, we will discuss What is the future of NFTs and their top trending applications?
Below are ten examples of alternative use cases for NFT, from blockchain real estate titles to reimbursable marketing benefits.
NFT allows you to trade digital works, at least through the NFT marketplace. These marketplaces allow you to create, purchase, and sell NFTs. Most marketplaces hold auctions where users bid for NFTs they wish to purchase. Buying NFTs from a major marketplace increases the likelihood that you can resell your product. In particular, NFTs in high demand immediately after the launch is strong. On the other hand, the main problem when buying NFTs from the primary marketplace is that it is challenging to forecast the need for that art. However, users can compare their purchases with past sales in the Secondary Marketplace.
Current state and future of NFT in each field
Here are some typical uses of NFT in each field.
The authenticity of prizes and rare goods
In addition, it is also useful for products that are less transferable such as awards.
In 2020, the first WebXR award was “presented” to the winners in the form of an NFT. Although physically impossible, the award is to be reproducible as a three-dimensional digital artifact. Anyone can make the XR Award files and facsimiles, but only the real winners can prove their award through NFT.
It is one use case, but it takes a little imagination to develop similar opportunities like diplomas and physical goods and property. These ideas also led to developing “smart contracts” (blockchain-enabled contracts), facilitating transactions between individuals that previously required third parties.
Many game applications use NFT tokens for in-app billing. These games will be a turning moment for multiple NFT fans who desire to play and beat many cryptocurrencies.
CryptoKitties, the most mature and popular blockchain game, is a great example of how we can use NFT in games. As mentioned earlier, the more rare items (specifically CryptoKitty), the higher the price. NFTs that are difficult to obtain or on platforms with limited supply will always increase in value over time due to the item’s scarcity. The value increase is that it is no longer an equal competition for those who want to own the item.
Manage music licensing and royalties
Another untapped application of NFT is the licensing of digital music. In the past, consumers purchased music on CDs and owned it permanently. When I tired of a particular CD, I could resell a physical copy to someone else. The CD was considered a collection that had more value than its music. The CD contains liner notes and images, and even if it is copied and sold, its value is lost.
Value-added for microtransactions
It’s not the only reason why games and online social experiences are promising areas of NFT. In these fields, cryptocurrency using cryptos such as bitcoin is also promising, but it is targeting all cryptocurrencies here.
Currently, in-game purchases usually have to be at least $1 or more because they cost money to trade between the application and the bank or credit card company. Users can eliminate intermediaries in peer-to-peer transactions using virtual currencies, so virtual currencies can be used as “microtransactions.”
VR full of super-realism
In this near-futuristic, blockchain-powered world, all personal NFT collections will be able to move together in a hyper-realistic VR environment. Anyone can see these digital assets who want to see them and can use them as part of an immersive gameplay experience.
In the future, we can use digital NFTs not only as virtual goods but also as physical objects may also appear. Separate your favored sports team jersey and play card fun with your mates operating it! Imagine combining the jerseys of your favorite sports team with a collector’s card game. It creates an interactive and immersive experience and adds value to physical items (jerseys), improving their longevity and usability.
Disadvantages of NFT
While the benefits of NFT demonstrate their potential, these markets also face a variety of challenges and risks to consider before deciding to enter.
- First, market risk: NFT markets such as digital art and collector’s items are booming, but that doesn’t mean they are safe investors. Investing in NFTs involves unique risks. The future of NFT is uncertain, and the history to determine its performance is not enough. When investing in NFT, you need to be aware of volatility, non-liquidity, and fraud in emerging markets.
- Financing in art is often a personal action, but there is a risk of losing its value. The NFT market is suffering from large volatility, as there is still no system to determine the price of digital assets.
- When it comes to NFT liquidity, all sellers need to find buyers who can pay a certain price for a particular item. Therefore, collectors can be caught in a difficult situation if they spend a lot of money at the “top shot” moment, and then the market begins to crash.
Despite the explosive spread of NFT over the past year and a half, using NFT to store digital artwork on the blockchain was already a concept five years ago.
In Europe and the United States, proof of ownership, proof of authenticity, licensing, ownership, and so on are taken for granted. It’s because we have access to a traditional and robust legal system and government system that protects us.
In other words, relying on that protection means trusting the central person. Opening up an individual’s right to intellectual property and physical property through the NFT will do the same to Bitcoin’s value to money. As Bitcoin becomes its banker, NFT allows it to manage its property. We hope everything is clear now about the future of NFTs and their top trending applications.
Read also, How to invest in NFTs crypto as a beginner with all basic information?