NFTs have been making waves since last year. Cryptocurrency experts, blockchain enthusiasts, and opportunistic investors are intrigued and confused by the potential of NFTs. While the attention gathered around this phenomenon may lead you to think that NFTs are just another short-term mainstream trend, their potential to redefine digital ownership should not be overlooked.
For now, NFTs are mostly associated with digital collectibles. With skyrocketing valuations for digital art occasionally making headlines and generating significant public interest, many brands have been quick to seize the opportunity. Partly due to the fear of missing out, many brands’ first experience with blockchain and NFT development consultancy was through the release of digital collectibles. While digital art is undoubtedly one of the most powerful areas for NFTs, its truly disruptive business potential lies further afield.
NFTs for business owners are digital tokens that are stored on a distributed ledger like blockchain and represent ownership of physical assets in the virtual and real world. If an asset associated with an NFT changes ownership, information about this transaction is immutably recorded on the blockchain. In this way, NFTs can be an effective tool to identify the origin, verify authenticity, and increase the traceability and traceability of any asset.
Now let us understand which industries can benefit the most from the adoption of NFT markets.
Supply chain
In short, asset tokenization can make supply chains more secure, transparent, and efficient. With NFTs tied to real-world objects, all actions related to that asset can be stored securely on the blockchain. This allows third parties to easily access the property’s ownership history and verify the authenticity of the item.
For example, Breitling was one of the first luxury brands to start using NFTs to confirm the origin of their watches. Every Breitling watch now comes with a unique digital passport. This allows buyers to be sure of the authenticity of the watches and more easily sell them in the future. In essence, NFTs may become a much more convenient and efficient version of the authenticity cards still used by many luxury brands. Importantly, since digital passport activation is often done through a dedicated app, brands also have access to another way to reach their customers.
Along with the unprecedented immutability that blockchain provides, NFTs can also be extremely effective in combating counterfeiting, which is particularly attractive to industries like pharmaceuticals. MediLedger, a permissioned blockchain network for the pharmaceutical industry, is already fighting counterfeiting, and some researchers argue that NFTs can become an effective alternative to traditional track and trace methods.
Real estate
One of the notorious drawbacks of conventional real estate investing is the colossal amount of paperwork required to close a real estate deal. With NFT-enabled property tokenization, asset trading becomes much less cumbersome.
For example, owners can tie NFTs to their real estate, then split it into multiple tokens and allow multiple parties to purchase pieces of the property, making NFTs particularly well-suited for fractional ownership. Most importantly, these tokenized assets can also be used as collateral for loans. This is exactly what Propy, a real estate transaction management platform, and Helio Lending, a crypto lending provider, have teamed up to achieve. In a macroeconomic sense, such initiatives allow more people to invest in real estate and gain access to capital more easily.
Ticketing
Once digital tickets replaced physical tickets, it seemed like there would be no point in looking back. However, both consumers and event organizers have had to learn the hard way about the legacy disadvantages of paperless ticketing.
Scalping is undoubtedly one of the most annoying things modern consumers have to deal with when trying to get tickets. Scalpers buy large numbers of tickets for a particular event at once and then resell them at absurdly inflated prices on secondary markets. However, there is little to no motivation for ticketing platforms to stop speculating. Some criminals go further and sell fake digital tickets that look exactly like the real thing.
With ticket tokenization, artists, organizers, and attendees can prevent fraudulent activities like scalping and make ticket sales more transparent. For example, event organizers can set a limit on the price of a ticket so that a ticket can never be sold at an unreasonable price. This effectively defeats scalping and makes secondary markets fairer. If artists so choose, NFT tickets can be set to be non-transferable.
final thoughts
The NFT space and Web3 in general are still confusing for many. Right now, it’s time for brands to experiment with these new concepts and technologies and see what can provide value to them and their customers. The ability of NFTs to extend real-world products and experiences into the digital realm cannot be overlooked. As businesses and consumers ponder these new concepts, the true potential of NFTs for businesses has yet to be unleashed.
Categories: How to
Source: HIS Education