By: Matthew Gooch
NFTs are an emergent technology on the blockchain that was first used in 2014. Although older than most people realize, the technology is still in its early stages. To put it plainly they are unique digital assets that are created, shared, and stored on the blockchain. Platforms can use them to verify the scarcity and identity of a digital asset.
Caitlin Ostroff; contributor to The Wall Street Journal explained it quite simply, “While every bitcoin created can be exchanged for one another, these cannot,”. They are each uniquely uploaded to a digital ledger.
Even if there are multiple copies of the same media or digital asset, each individual NFT has a cryptographic code used to identifying that it is a unique 1 of 1.
Music and social media are two industries that will be drastically affected by the adoption of NFTs. Look at Theta TV for example, and how it has the same function as Youtube but with the inclusion of NFTs. The way it works is, the creators award viewers with NFTs, that they can later sell or stake on games like rPlanet. Media producers can mint a limited number of their songs that can be then used verifiably in copy-write productions which the platform can also verify. This would allow the artist to collect royalties on the trading and use of their productions without a third-party manager. Social media users would be able to reward their followers with NFTs that would grant discounts and even be one time use as they can be created with a burn function.
Geo-cached NFTs are a little farther ahead, event-goers could get NFTs dropped into their wallets via a GPS location verification API. This would allow vendors to offer digital discounts and rewards to people that attended real world events. This could also be used to allow access to an event, a digital app would simply verify that the specific attendee has the NFT in their wallet and grant them access to the event or to a VIP area. It could also be used to draw collectors of NFTs to certain events and places, think of how Pokemon GO was able to drive real world users to businesses by allowing business owners to setup “gyms” in the game.
That brings us to gaming NFTs, where the possibilities are nearly endless. Users are spending mind-blowing amounts of money on skins and costumes that serve no improvement or advantage to the gameplay beyond enhancing the users’ avatars appearance. NFTs allow producers and organizations the ability to easily claim ownership and authenticity.
The items and skins could also be transferable across games, systems and platforms. By making in-game items NFTs, the players literally own them. This allows them to be purchased and sold on third party markets, with royalty and tx fees built in. Think about all the time spent in one game, and once the game is over or has become outdated, all that progress is essentially lost.
Although this technology growth in mainstream video games has been slow, the recent surge in awareness of NFTs and the demand for them is growing. Games like Decentraland, Voxel, and Sandbox are just the beginning and soon virtual worlds filled with different games and NFT assets will be the norm. NFTs would more easily allow the transfer of digital assets from one game to another as the items creation in another game is relatively easy compared to the difficulty of verifying which user owned certain skins and objects from previous games. Imagine if a COD rifle was able to be transferred into Counter Strike.
According to Nonfungible.com, NFT assets grew by almost 10 times between 2018 and 2020. 2021 has far outpaced the NFT asset value of 2020.
The integration of NFTs into the metaverse across platform assets is an amazing phenomenon; But like everything, it doesn’t come without potential downsides. Foremost is that it unsustainable to have a game where every player has the goal of extracting as much money as they can, while contributing very little..the value has to come from somewhere so if you are one of the lucky few to actually make some money, it will be at the expense of another user… Also, the obvious concerns around minting costs and processing that is more scalable. Either way NFTs will come into these other markets and industries are already assessing the impacts they will have on Eco and climate.
Coming into a more real-world logistical application, which is where data driven tech thrives, is the services and goods availability in the supply chain. The fact that these assets can be programmed to represent real world items is one thing, but they can also be permanent, irreplaceable assets that always ensure authenticity and quality of data, and they can be traded. NFTs can be used to authenticate goods, ensuring their origin, even specific components of a larger item can be individually authenticated and verified. It can help remove counterfeits, and secure traceability through the supply chain.
For example, Louis Vuitton in 2019 unveiled plans to launch a blockchain that uses NFTs to authenticate the origin of high-priced goods to verify quality and source. It tracks individual resources from start to production and to the shelf. Virtually eliminating the possibility of counterfeits.
The potential goes even farther. This massive amount of data related to the transportation and distribution of individual products in the supply chain allows people to better understand manufacturing and distribution costs. It also allows for greater transparency for consumers in the production of their goods. So, it is easy to see that using NFTs will allow organizations a significant advantage over their competition.
On a side note, it is likely that the NFT market will penetrate IP and Patents of different kinds. For example, someone that is a member of a specific group would be given a non-transferable NFT that would grant them the ability to use patents in certain products or services.
As I’ve pointed out.. NFTs are a new technology that are very clearly going to have a wide variety of uses in the near future… With only around 5% mainstream adoption, it is unimaginable all the other markets that NFTs will impact as the potential is so great, and the technology is so young.
With that being said, this article was brought for by Matthew Gooch in collaboration with GameFi, the parent company of PIKA Crypto… they are set to launch their NFT Marketplace; “The KRAFT” on October 27th, 2021. So if you liked what your read, and think your ready to dive into the rapidly growing world of NFTs, this is a fantastic place to start!
