- 3 June 2021
- Posted by: btcbros12
- Categories: Articles, Blockchain, Cryptocurrency, Education, Ethereum, Innovation, NFT, Services, Technology
Non-Fungible Tokens or NFTs have taken the digital world by storm since the end of 2020. If you don’t know what an NFT is, it is a computerized token that ascertains your ownership over some unique digital item. NFTs are made using the smart contract functionality of blockchains, meaning the data on them is immutable and easily verifiable. Being non-fungible in nature, the item tied to an NFT is always unique, like a first edition collectible or a one-of-one digital art piece.
Recently, a lot of industries have been looking to incorporate NFTs into their business. Perhaps the most significant examples of the explosion of NFTs can be found within the music industry. Several notable artists have issued these tokens to auction off the rights to some of their music or to sell uniquely crafted digital collectibles to hardcore fans. These NFT drops have netted them millions of dollars and the NFT space has taken off like a rocket since then. The total value of all NFT sales in Q1 2021 stands at $2 billion.
The massive potential of blockchains and NFTs goes beyond digital collectibles though. In this article, we shall take a look at how NFTs can transform five massive worldwide industries.
The Sports Industry
As sports brands rush to keep up with the changing winds of the blockchain era, one of the frontrunners has been the NBA. The National Basketball Association of USA has started selling video collectibles known as NBA Top Shots. These are like trading cards except that instead of being pieces of paper, you get to own video footage of some of the most iconic plays in NBA history, in the form of NFTs.
Some of these NBA Top Shots have raked in insane money. A LeBron James highlight sold for about $200,000, whereas a Zion Williamson play went for a little less than that. All told, these tokens have netted the NBA and associated players over $230 million in gross sales.
Mark Cuban, who owns the NBA team Mavericks, believes that the future of merchandise lies in NFTs. According to him, It’s just a matter of identifying the right market and Top Shots nailed it. Following the success of the NBA, other brands are looking to issue NFTs as part of their advertising campaign.
The Art Industry
Perhaps the NFT sale that catapulted the technology into the public limelight was that of Beeple selling a piece of digital art for $69 million at a Christie’s auction. Following his success, other artists such as Andrés Reisinger sold 10 virtual furniture items, with the costliest one going for $10,000. Another example is that of Jose Delbo, a comic artist who worked on the Wonder Woman comics back in the 70s. He sold NFTs depicting the iconic DC heroine for a cool $1.85 million.
Collectively, artists have made over $60 million selling gifs, jpegs, artworks, and other digital collectibles. NFTs have proved to be a lifeline for many struggling artists as they get to do what they love and collectors are willing to spend big money to buy NFT art. Even established art houses that mostly host black-tie events have started auctioning artworks as NFTs to stay ahead of the curve.
The Gaming Industry
Being one of the more tech-savvy industries, NFTs in video games have been a thing since people even knew what they were. One of the first games to incorporate the NFT mechanic was CryptoKitties, where every cat was an NFT with its unique set of attributes. In 2018, the most expensive of these kitties was sold for $140,000.
With the use of NFTs, in-game objects and characters can be tokenized and traded outside of the confines of games. These NFTs can then be sold, exchanged, or rewarded to game participants. In several ways, this allows the game creators to create additional value for players and provide everyone with a unique user experience.
Platforms such as Aavegotchi and AnRKey X have combined Decentralized Finance with NFT gameplay. In Aavegotchi, you can customize in-game characters to your liking, fight with them and add upgrades to change their traits. AnRKey X is an esports-centric service where players can compete against each other, purchase NFT tokens, bet on outcomes of games, and get rewarded.
The Music Industry
Arguably, the one industry that stands to gain the most from the NFT revolution is music. As it stands presently, services such as Apple Music and Spotify pay peanuts per stream to artists. On top of that, it is very difficult for independent musicians to get discovered on these platforms because their music rarely makes it into curated playlists. Even the artists who are big enough to secure record deals get offers that are often very one-sided and the middlemen in the system suck up a lot of royalties. During 2020/21 Platforms, such as Audius have become extremely popular and also valuable, receiving endorsements from artist’s like 3LAU and Russ.
NFTs are the perfect solution to all these problems. By issuing new tracks as tokens, artists can sell the rights to their music for a lot more money than streaming revenue. They can also market their merch and other collectibles directly to fans. As there are no middlemen required in selling NFTs, all the money goes to the artist.
Big names in popular music such as Grimes, Shawn Mendes, Mike Shinoda, and Eminem have auctioned off unique soundtracks as well as digital collectibles as NFTs, netting them tens of millions in revenue.
The trade potential of NFTs is what makes them so lucrative. Since they embody unique items, the prices on them can appreciate fairly quickly. So it is natural that digital marketplaces have sprung up that exclusively sell NFTs. Sites such as OpenSea and Rarible allow you to buy everything from digital art to virtual real estate using cryptocurrencies.
E-Commerce also allows for real-world artefacts to be bought as NFTs. As assets like gold or real-estate bonds become tokenized, these can be sold as NFTs on online marketplaces, allowing anyone in the world to buy them. This has huge implications in the world economy, with regards to closing the poverty gap and facilitating financial inclusion.
NFTs are an exciting evolution to the concept of ownership. These tokens play a crucial role in the development of an alternate digital economy that is decentralized and inclusive, while also affecting traditional industries. As such, the use-cases of NFTs are plentiful and we will find out more as the paradigm continues to evolve.
- Banking Is Only The Beginning: 58 Big Industries Blockchain Could Transform https://www.cbinsights.com/research/industries-disrupted-blockchain/
- Will Blockchain Technology Be a Music Industry Savior? https://www.singlegrain.com/blockchain/will-blockchain-technology-be-a-music-industry-savior/
- What You Need To Know About Non-Fungible Tokens (NFTs) https://www.forbes.com/advisor/investing/nft-non-fungible-token/
- Here Are the 10 Most Expensive NFT Artworks https://news.artnet.com/market/most-expensive-nfts-1952597
- People have spent more than $230 million buying and trading digital collectibles of NBA highlights https://www.cnbc.com/2021/02/28/230-million-dollars-spent-on-nba-top-shot.html
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