It’s hard to ignore all of the innovations taking place within the world of Non-Fungible Tokens (NFTs). But it’s also hard to ignore the fact that most of these innovations are limited to 2D digital art, with limited utilitarian value.
What’s far more interesting is the specific applications of NFTs to solve industry problems. This will almost certainly pave the way for wide-scale adoption and acceptance as digital tokens become specialized for niche circumstances.
Generic coins are no longer as appealing as they once were without having a very specific focus. Coins should revolve around a relevant use case and need to be representative of an ecosystem designed specifically for a given area. When this happens on a large scale (and it already is), we could witness exponential growth.
#A Short Explanation of NFTs
The NFT industry is still in its infancy. Though it sounds complex, an NFT is simply a unique asset on a blockchain.
The fact that it cannot be hacked or manipulated makes it extremely promising and applicable to a variety of industries. If something can be easily cloned then it is essentially worthless, because there is no real ownership.
NFTs confer ownership to people without having to resort to extremely expensive bureaucratic mechanisms. The blockchain itself will automatically provide these safeguards at a lower cost with increased speed, privacy, and transparency.
NFTs are available through marketplaces such as OpenSea, Binance NFT marketplace, and numerous others battling a space in this young industry. They are typically purchased using ETH as they are most commonly released on the Ethereum blockchain. But they will soon be widely available on multiple blockchains and ecosystems.
#Let’s look at three industries where NFTs are already becoming prominent and disrupting the status quo.
##1 – The Live Concert Industry
NFTs also have direct applicability towards the live concerts and entertainment industry. With Covid-19 resulting in social distancing measures and geographical restrictions, people are looking for different ways to interact. Lack of physical movement means that more and more people have gone online to find alternative means of social contact. The live music industry dropped from $28 Billion to $7 Billion from 2019 to 2020, and this has a clear correlation with the pandemic.
But Web 3.0 startups are already utilizing NFTs, VR, DLT, and cryptocurrencies to build an ecosystem that fills the void.
Animal Concerts, which describes itself as a ‘next-generation metaverse platform’, seeks to provide a new kind of concert experience for customers.
Essentially, the experience of live concerts is being ‘metaversed’, with the help of blockchain and NFTs. Viewers can experience the concert from the comfort of their homes, purchasing these tickets using the $ANML token. They can interact with other attendees and pay via cryptocurrency for tickets, VIP passes, virtual meet and greets, and more. It might not be quite there yet, but Animal Concerts has the infrastructure and advertising deals in place. They have already hosted concerts with grammy award-winning rapper Future, Busta Rhymes, and Alicia Keys!
Aside from live concerts, NFT’s have direct applicability to the sale of music. The music can be in the form of an NFT with distinct attributes. Instead of having to get a record deal with an agency, the artist can get a deal with a crypto-focused startup. The ‘record deal’ can be enforced via programmable smart contracts. The artist can get a royalty whenever the music/NFT is sold to another person. This can reduce costs for purchasers and also ensure that recording artists (finally) get a fair deal for their contributions.
##2 – The Gaming Industry
NFTs are uniquely suited for gaming. Games are being created on distributed ledger technology that already has in-game marketplaces for the buying and selling of certain assets. While there are an increasing number of games where you can buy assets, there are few inter-game marketplaces for trade. In other words, there is little to no interoperability for asset trading within the gaming industry, as opposed to within the individual games. This is partly because different games exist on different chains. But this is set to change with a multitude of Web 3.0 games being built that have been designed from the ground up to facilitate NFT trading between blockchains.
Soon, most games will likely have to offer gamers the ability to trade NFTs. Otherwise, they will be shut off from the market, won’t be able to earn, and won’t be able to compete against other gamers. After all, why would a gamer choose to participate in a game where they don’t get ownership, or even rewards, of any kind?
This can further help Web 3.0 games like SolChicks, Crypto Kitties, Axie Infinity, and the like to grow in unison. SolChicks is built on Solana while games like Crypto Kitties and Axie Infinity have been created on Ethereum. At present, Ethereum gas fees are far too high, forcing game developers to migrate to chains like Solana.
Cross-chain interoperability is a necessity to bolster the wider industry. It’s more about bringing the industry together than having a few gamers or blockchains stand out. SolChicks, Axie Infinity, and Crypto Kitties are all ‘Play-to-Earn’ revenue generation models where users can earn rewards in the form of NFTs or native tokens. Put bluntly, inefficient blockchains will ultimately mean less revenue for all parties.
What’s interesting is that developers now have to design not just games but trading ecosystems that will encourage loyalty on a given platform. Parallels might be drawn here to the Proof-of-Stake consensus mechanisms that largely replaced Proof-of-Work Mechanisms on earlier blockchains. It all ties back to loyalty, rewards, and incentives to stay with the system.
Moreover, the gaming industry itself is huge, larger than TV, film, and radio combined, in excess of $200 billion. One of the most popular types of gaming, the Multiplayer Online Battle Arena (MOBA), is worth $43 billion. And platforms like League of Ancients (LOA) are already designing the world’s first free-to-earn and free-to-play MOBA NFT game to target this market. LOA was inspired by DotA2 and League of Legends, two highly successful games with large user bases, and is seeking to build on and add to their success with new innovations.
##3 – Environmentalism & Conservationism
Environmentalism and conservationism are big areas. Even Bitcoin has been heavily criticized for its environmental impact in relation to mining. Despite the contention that these criticisms are greatly exaggerated and based on dubious logic, it points to a growing public awareness of overall global consumption. Environmental concerns have played a part in why people are moving to Proof-of-Stake consensus mechanisms, though these mechanisms do tend to be more efficient.
This is why NFT projects are lining up with ecosystems built on environmental and conservation campaigns.
The Roaring Jaguars project plans to release a jaguar into the wild for every new NFT minted. The Tiger King project is focused on generating awareness for the tigers. Tying in NFTs and cryptocurrencies with these specific use cases is a great way to generate adoption.
Wildearth.tv is taking a broader approach in its efforts to support wildlife and the wider environment. Their tokens are directed towards preserving the habitats in which specific wild animals live. There are a number of animals that can be supported. 40% of every WildEarth NFT is given directly to the custodian of the habitat on which that animal lives.
The project runs on the Polygon blockchain, which is more energy-efficient and environmentally friendly than many contenders. A major selling point with WildEarth is the fact that donors can watch their animals on TV given that WildEarth is one of the world’s largest live broadcasters of nature and wild animals.
##NFTs: Coming to All Industries
Writing about ‘which’ industry NFTs are going to disrupt is a little misleading. Because it’s going to affect all industries, because it allows both a more flexible and secure definition of ownership, and provides all the advantages of decentralized transact ability now hardened into blockchain technologies.
Healthcare, land ownership, finance, travel, sports, real estate – all will find new ways of commercial engagement with stakeholders via distributed ledgers and NFT-secured ownership models.
It’s also going to merge industries together. What happens when you play a game in an online VR-enhanced Metaverse, where you pay for your favorite music in the format of an NFT, using a cryptocurrency? Some Web 3.0 projects are so big that they are combining industries that were previously separate – though the primary engine would be the underlying blockchain architecture on which the NFTs and cryptocurrencies are transacted.
We are only at the beginning when it comes to the growth and use cases of NFTs. Cryptocurrencies, as important as they are, are just the first step in a decentralized, secure, transparent, and efficient world. NFTs represent new layers of innovation and possibility.
Lead image courtesy of unsplash.com
Source: Hackernoon – https://hackernoon.com/industry-specific-nfts-will-bring-next-level-growth