Can NFTs be the new gold of crypto economy?

• NFTs are evolving to bridge this gap by taking advantage of blockchain’s properties like provenance and scarcity.
• Beyond art, several industries including entertainment, fashion, finance, gaming, healthcare, insurance, music, real estate, and sports have discovered various use cases of NFTs.

It is often difficult to claim the ownership of assets and differentiate them in the current digital world and there is a growing need to replicate crucial properties of physical assets like proof of ownership and uniqueness.

For instance, a copy of a file like a JPG, for instance, is the same as the original.

NFTs (non-fungible tokens) are evolving to bridge this gap by taking advantage of blockchain’s properties like provenance and scarcity.

A non-fungible token is a unit of data stored on a digital ledger, called a blockchain that certifies a digital asset to be unique and therefore not interchangeable. 

They [NFTs] have proven to be fascinating for artists as they found new ways to sell their creative digital work. Beyond art, several industries including entertainment, fashion, finance, gaming, healthcare, insurance, music, real estate, and sports have discovered various use cases of NFTs.

The music industry has already had the likes of Snoop Dogg, Lionel Richie, Boy George, Grimes and Kings of Leon rake in millions by selling music and art as NFTs.

Amitabh Bachchan to launch NFTs

Amitabh Bachchan has become the first Bollywood actor to launch his own NFTs with BeyondLife.club.

Rhiti Entertainment’s BeyondLife.club has partnered with GuardianLink.io to offer a platform to global artists, celebrities and athletes to launch their first-ever NFTs.

However, Bachchan is not the only Indian actor taking a dip into the NFT world. Sunny Leone is also going to launch NFTs on her own website and said that each of her NFT will be 100 per cent unique from another and will have different levels.

Besides, there is Diginoor.io, an official NFT platform created by Yash Rathod and Shaamil Karim to officially trade licensed movie collectibles.
It announced early in July to launch NFT collectibles from Rajinikanth starrer Sivaji The Boss.

Challenges

Kiran Raj, Principal Disruptive Tech Analyst at GlobalData, said that 2021 looks to be promising for non-fungible tokens (NFTs) as their use cases are slowly spreading to new domains and hold a promise to redefine the ownership of digital assets that can result in novel business models.

However, he said that NFT adoption as a mainstream technology can be challenged by caveats like lack of scalability, high transaction fees, high energy consumption, and unsatisfying user experiences.

“If such roadblocks are addressed, more business leaders would be inspired to investigate the potential of NFTs to convert into new corporate functioning models,” he said.

 “NFTs, in essence, can meet this need with their blockchain-powered unique properties like provenance and scarcity. Slowly but surely, they are evolving to be much bigger than an art fad as their real-time use cases thrust forward in multiple industries,” Raj said.

Moreover, he said that startups and corporates are leveraging NFTs to change the ownership of digital assets.

Future potential of NFTs in key areas

Entertainment: NFTs enable entertainment companies to rebuild fan economies with limited-edition content and collectibles as a new mechanism of storytelling. American startup Curio creates officially licensed digital collectibles from a host of popular and legendary television shows, blockbuster movies, comic books, and generative avatars. Its partners include popular names in the industry like Universal Pictures, Fremantle, Dark Horse Comics, and Heavy Metal.

Finance: The most straightforward use case of NFTs in decentralized finance is obtaining loans against valuable digital assets without selling them. South Africa’s NFT marketplace NFTfi allows users to put up their NFT assets like art as collateral for a loan or offer loans to other users on their NFTs. The startup boasts a total loan volume of more than $12 million on its platform so far.

Healthcare: Genetic testing facilities have been sharing our DNA with big pharma companies to cut off years in drug research. However, it often raises concerns on how these companies sell our most personal data for huge profits without passing any benefits to us.

London startup Shivom claims to be the world’s first NFT marketplace for genomic data that can offer transparency and complete control on our DNA data, which allows earning from it. This way, NFTs can encourage genetic data sharing and significantly contribute to precision medicine.

Real estate: Albeit in its fancy, virtual real estate is evolving as a comparable asset class to traditional real estate. Brazil’s Decentraland enables the purchase of virtual lands in the form of NFTs.

In July 2021, a piece of virtual land on the platform was sold for nearly $1 million. Sotheby’s, a premier auction firm for art and luxury, has also launched a virtual replica of its London office on Decentraland.