In this blog post, I will discuss and elaborate on the use cases of non-fungible tokens (hereinafter: NFTs). NFTs are tokens that represent real-world objects, such as art, houses, cars, or music, which are unique and cannot be replaced by something else (Clark, 2021). As a result, NFTs function as digital security for many real-world objects by ensuring authenticity (Conti & Schmidt, 2021). NFTs gained popularity in 2021. However, the technology has been around since 2014 (Conti & Schmidt, 2021). The popularity of NFTs in 2021 was primarily driven by art sold through NFT, which caught a lot of hype.
However, NFTs can be used for a wide range of use cases, especially when one wants to ensure the authenticity of a real-world object. One can think of a digital revolution in the real estate market where a notary is not necessary anymore to ensure that deed of delivery of a house is completed. As such, in the near future, homes can be transferred between individuals without controlling third parties, such as notaries. Furthermore, regarding art, the different parties involved in a transaction can ensure authenticity since a NFT cannot be duplicated. Therefore, one is always sure when a NFT is received that it is the specific real-world object that both parties were talking about. Moreover, one use case that has not been touched upon heavily in the business world is to set up companies on NFTs. It is imaginable that companies can be transferred by transferring the specific token to another party in the future.
In my opinion, NFTs are going to make transactions between parties easier since authenticity can be ensured. Besides, costs can be saved since intermediaries are not necessary anymore. As a result, markets become more efficient. Therefore, I see NFTs as a massive benefit for our economy and daily life’s. However, the technology still needs to evolve, and regulations will need to be in place to ensure a smooth transition.
References:
(Clark, 2021)
https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
(Conti & Schmidt, 2021)
https://www.forbes.com/advisor/investing/nft-non-fungible-token/
