🤔 NFTs: Future or Fad?
NFTs are everywhere. And while many have bought these digital assets for millions, others believe they're a fad. So, who's right?
What comes to mind when you think of assets? Stocks, bonds, gold, and maybe that really expensive Picasso painting (if you're lucky enough to own one).Â
But what if we told you that a motivational quote or a tweet could be an asset too?
No, we haven't gone crazy (though we can't say the same for the rest of the world)!
Today, a motivational quote can be an asset. Mark Cuban sold one for $1,700.Â
Why would someone buy a motivational quote, you ask?
Because it was sold as an NFT.Â
The NFT Boom
Yes, anything and everything is being sold as an NFT (a unique digital token or asset), including love, farts, and tweets. No wonder the total sales of NFTs have crossed $12 billion!
When you hear about NFTs in this manner, you probably think they're a fad. And you may not be wrong. Research has proven that most NFTs are worthless.
So, are NFTs going to fizzle out soon? Was this just a weird phase in our lives like those awkward teenage years when we were obsessed with movies like 'Twilight'?
Not at all. NFTs can and do have many use cases, especially as they're built on the blockchain, which is basically the future of the internet. (If you're confused about these concepts, here's our repository of crypto-based explainers).
But most creators (and even ordinary people) see them as a way to make a quick buck. And so, they flooded the market with NFTs of anything and everything.Â
So, what can NFTs be used for?
The NFT Use Case
Well, if we were to count all the ways in which NFTs can be used, both you and us would be stuck here all day. So, we'll save some use cases for another day, and today just focus on how NFTs can be used in the world of sports and fashion!
Why these two worlds specifically? Because these industries have already capitalised on NFTs a lot.
Sporty NFTs
For sports especially, the use cases seem endless. NFTs are being used to create fan tokens and build fan communities.
But they can be used for so much more. For instance, the NBA team Dallas Mavericks are considering replacing regular tickets with NFTs.Â
Okay, what's so unique about that?
Well, these NFTs are built on a blockchain. So, there is no chance of any ticketing-related scams or of fake tickets being sold. And the Mavericks can earn extra money through this model. How?
You see, people often buy event tickets in bulk only to sell them off to others who missed out on the chance. These secondary market sales usually don't benefit the primary ticket sellers. But with NFT tickets, this is set to change.
Every time an NFT is resold, the original creator gets royalties. So, Mavericks can make more money if the tickets are resold.Â
Okay, but what will buyers like us get?Â
Mavericks are considering adding an exclusive collectible to them. Or they can provide concessions to snacks inside the stadium.
This use case can actually be valid for the entire entertainment industry in general. NFT tickets can be used for concerts, movies and other events as well. And in return, you get collectibles related to your interests. Some exclusive VIP NFTs could also allow you to be a shareholder in the event. You pay a little extra, and in turn you make a profit if the event is profitable!
And this can revolutionise the entire entertainment industry.Â
Hold on, ReadOn. Aren't you getting a little ambitious?Â
No, and we'll tell you how.Â
Managing an event is a huge headache. You need to pay several people and keep tabs on a hundred different things. But NFTs can make this simple.
Using blockchain technology, an event manager can add smart contracts1 into the NFTs. These smart contracts will directly pay different people involved in the event through your ticket purchases.Â
For instance, the contract can state that 10% of the ticket's MRP will go to the artist, 20% to the manager, 5% to the decorator and so on.Â
This could eventually eliminate the need for event organisers altogether! An entire community could come together to organise an event and pay for it themselves.
Starting to see the benefits? Well, this is just the beginning.Â
The sports sector is now giving way to esports. There are many players who are more invested in their digital teams rather than the actual living, breathing players.
Now, what if you could buy the NFTs of these players and exclusively include them in your own digital team? You could have your own digital version of IPL or La Liga. The opportunities are endless!Â
And what about the fashion world?
Trendy NFTs
Many fashion brands have realised that it's not just physical copies of their products that have value. People are also interested in the digital copies of their products. Umm, why though?Â
There are two main reasons:Â
First, people are increasingly living a digital existence and so they want their assets digitised as well. What's the point of having an expensive shoe collection if you can't get clout from it on the internet? And with the metaverse on the horizon, we soon won't be dressing ourselves but our avatars (tweet this). So, physical items may soon be redundant.Â
Second, fashion items, especially luxury fashion items, are no longer used for just looking good. These are increasingly becoming collectibles. And you know how collectors are. They gotta catch 'em all. So, why not collect digital fashion accessories too? And if you're wondering why people are collecting fashion accessories, let us tell you that an Hermés bag is a better investment than gold! (But that again is a story for another day).
Okay, fashion accessories make the perfect NFT. But, most of this will come in handy in the metaverse. What if the metaverse is also a fad?Â
Well, the world is still going to remain largely digital. And there are other ways in which you can use your digital accessories rather than just storing them or decorating your avatar.
For instance, a company called Auroboros has designed digital apparel that you can don via augmented reality. Huh?
Basically, the company creates designer outfits that can be pasted on top of your pictures. So, you can own a thousand new outfits without actually owning them. This way your Insta followers are happy and your mom isn't mad at you either! A win-win for all :)
Even though NFTs may largely be worthless right now, there's a lot more that we can do with this technology in the future.
Any cool applications of NFT that come to your mind? Let us know in the comments.
From the Archives: Simply put, a smart contract is a contract that is… just smart. How so?Â
Let’s take a vending machine full of drinks. Now, you want to buy a can of Coke that costs $2. You have $3, and you put it all in. The output of this digital vending machine will be a can of Coke and the balance $1. How did it know if an adequate amount was entered, and how did it get that balance? Programming. The machine makes decisions using pre-coded algorithms and conditions and does not require any intervention from outside.
Similar to this vending machine, a smart contract can be self-executed without the need for intermediaries. It is a program (collection of code and data) that runs on the Ethereum Blockchain. It contains a set of predefined rules for the agreement, and when these rules or conditions are met by both the parties of the contract, the contract gets automatically executed. You do not need any gawaah (or witness). Also, since every piece of information on the Blockchain is secure, the smart contracts cannot be altered by a third party.
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ICC has also created NFTs for best cricket moments.
I also covered about digital fashion in my blog at Taxloupe. You can read it at: https://taxloupe21.wixsite.com/website/post/how-meta-verse-can-boom-the-fashion-industry?postId=7fdc3554-bd5f-4ea8-ad41-c1f4cb84ce43
Bubbles will bust but NFT with strong backing will sparkle like DIAMONDS FOR EVER....