NFTs can be used for much more than being speculative with works of art. This 2023 we will see many practical uses that will change our lives
A lot has changed in the NFT space in the last year. While in 2021, non-fungible tokens (NFT) exploded, in 2022, Web3 saw the maturation of the NFT space accelerate thanks to a bear market. Of course, artists continued to find ways to support themselves, and NFT collectors evolved into prominent Web3 builders, but the wild west that was the NFT market cooled significantly.
Of course, this is not bad. Far from it. Although many investors and influencers quickly fell silent when the million-dollar profits stopped rolling in, the NFT space as a whole was propelled forward. The collectables and large-scale PFP projects that dominated the market began to decline, and other, often overshadowed, use cases began to emerge.
But we're not just talking about Sound xyz's secondary sales of music NFTs, which surpassed 5 million dollars, or the editions of photographic NFTs that went viral. While these are undoubtedly big wins for artists, advances in blockchain technology and the shift from Web2 to Web3 have helped solidify several NFT use cases that could have the potential to game-change the metaverse as we know it. In 2023, these growth sectors will certainly be worth keeping a close eye on.
Ticket sales and attendance receipts
Perhaps one of the most undervalued sectors of the NFT market is ticket sales. Considered by many to be very useful for the future of live events, NFT ticketing is precisely what it sounds like tickets in the form of NFTs that live on a blockchain and act as access passes to any live (or even virtual) event.
With NFTs, ticket senders and receivers can benefit in several ways. Issuers can more comprehensively track attendance figures using the blockchain as a ledger, while also engaging with ticket holders in a new and innovative way through NFTs. Issuers can send notices, host surprise giveaways, create tokenized sites and services, and much more, simply by matching data associated with the holders of a specific NFT entry.
On the other hand, attendees at events where NFT tickets are not issued can also be rewarded afterwards. With POAP, the Proof of Attendance Protocol, users can create and issue commemorative badge-style NFTs, which can provide many of the same utilities as NFT tickets. Often, users only have to scan a QR code or enter a specific phrase to collect a POAP, making the barrier to entry significantly low and accessible to those not versed in blockchain technology.
While NFTs and POAPs may seem like just a fun incentive for event attendees, they have continued to be useful for project founders to keep track of early contributors. It wouldn't be an exaggeration to say that both NFT tickets and POAPs are helping to change the way we think about fandom on Web3.
Memberships
While it is true that NFT-based affiliations grew and developed alongside POAP projects, they have since become their unique sector of the NFT market. Used primarily by brands and programs, these types of NFTs act as access keys to unlock incentives and rewards for those who own them. Membership with NFTs is often done through token-gating, which uses blockchain technology to verify ownership of an NFT and grant its holders access to any member-only benefits offered. This can be implemented on Discord servers, in-person or virtual events, etc.
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One of the first examples of NFT affiliation is the Boring Apes Yacht Club. By simply owning a BAYC NFT, holders have had access to merchandise drops, music festivals, subsequent NFT releases, and much more. Projects like LinksDAO, LoudPunx and Flyfish Club remain two of the most ambitious membership initiatives, while platforms like Friends With Benefits nOne have become archetypes of organizations that seek to launch membership passes.
NFTs have gone even beyond the idea of a simple subscription, incorporating shared ownership and voting. For example, Rug Radio. Created by featured influencer and builder FarokhTo be a decentralized Web3 media platform, the ethos of the project is to be of the community and for the community, as a platform owned by its consumers. For this reason, Rug Radio issued NFTs of Membership Pass, which grant their holders the ability to vote on proposals and participate in important decisions.
Soulbound Tokens
TheSoulbound TokensThey are non-transferable NFTs, making them ideal for managing permanent records. Instead of storing vulnerable records on paper to be passed down from generation to generation, SBTs could provide us with a better way to verify important information on the blockchain.
But taking care of paper records is just a single feature of these SBTs, initially proposed by Ethereum co-founder Vitalik Buterin. Designed to serve as a comprehensive set of tools for Internet users to preserve and protect their identity, if released as planned, SBTs could have a significant impact on our daily lives. Through SBTs, medical records, academic achievements, alumni status, work histories, criminal records and everything else can be minted as an NFT with immutable and non-transferable ownership.
While it is true that SBTs may not be possible at scale until a fully decentralized society is achieved, there is growing evidence that they could become a reality in 2023. But where? Well, in addition to Buterin himself alluding to the possibility that they could (have been) implemented at the end of 2022, companies like Moonpay have already announced initiatives along the same lines as the SBT. Maybe it's just a matter of time before we see the first real-life use case.
Physical x digital
Characterized as a fusion of the physical and the digital, phygital has built another layer on top of the concept of digital property, allowing artists and developers to convert their physical creations into NFTs, and vice versa. Although the term phygital itself has attracted opposition due to its abrasive phonetics and basic portmanteau nature, the popularity of these products is undeniable.
Phygital products come in a wide variety of forms. From toys to collectables and even more traditional forms of art like sculptures and paintings, the line between the physical and the digital continues to dissolve for the creators of Web3. However, one of the most popular use cases to emerge from this new market sector has been wearables. Perhaps the best example of this is companies like 9dcc and RTFKT, which continue to produce shoes, t-shirts, and other fashion items powered by NFTs.
And while physical goods sound a bit futuristic, wearable digital goods have been around for a long time through video games like Fortnite. In fact, Fortnite skins were what first inspired 9dcc founder Gmoney to venture into digital collectables, as he saw the potential of digital ownership and the importance of future generations understanding that potential. If investment giants like him, and fashion powerhouses like Nike are setting their sights on digital, the rest of the Web3 would be smart to do the same.
Artificial intelligence
Whether we like it or not, artificial intelligence is here, and it seems to be here to stay. From tools like ChatGPT, which proliferate in almost all sectors, to AI-generated art, which is becoming a hot and controversial topic among online communities, the AI boom we are experiencing now seems similar, if not larger, than the initial NFT boom of 2021.
However, there is almost no doubt that AI will have a greater reach and impact on society at large than even NFTs can muster at the moment. But it is not due to the latest AI boom, but to the digital nature of the NFT space in general, where developers, artists and programmers converge. So why should we keep an eye on AI in 2023?
Well, because it has advanced very significantly only in the last year. With the advent of DALL-E, ChatGPT, and other tools, the ethics of creating and selling AI art have been questioned. Although many critics fear the new paradigm of AI art, others have accepted it as inevitable. But still, works created by AI currently lack the “human authorship” necessary to grant rights intended to protect the artist. A slippery slope, to be sure.
And what else?
Regardless of the benefits and speculation, the five use cases listed above are undeniably prominent within the NFT space as we head into 2023. Some may fade, others could come to dominate the market entirely, or perhaps some invisible force will appear and change the ecosystem even more. However, there is no doubt that each of these cases of NFT innovation has contributed, if only a little, to moving the conversation around the usefulness of blockchain technology in modern society beyond the niche. to the mainstream.