The NFT art industry has experienced a significant boom over the past few years, quickly followed by what many saw as a bursting of the value bubble and a bear market that has had an effect on many sections of the crypto sector. To those outside of the industry, the value of art NFTs was difficult to understand. The uniqueness of the pieces themselves (their existence in the digital space and how they differ from copies, screenshots etc.) and their value requires a certain level of technical and financial literacy. With the sudden drop in the value of many collections of art NFTs, therefore, came a sense that the technology was merely a fad. The potential of NFTs does not merely lie in their significance as individual pieces of art. In the past few years, utility NFTs have been making a splash, especially as their value is not simply tied to their uniqueness but to the benefits (in both the real and virtual worlds) that they bestow upon the owner. NFTs are here to stay, not just in the art world but in the ways they have (and continue to) infiltrated various sectors across different industries.
Utility NFTs vs. Normal NFTs - is there a difference?
An NFT is a Non-Fungible Token: an image recorded in the blockchain (used to verify its authenticity and previous ownership) that cannot be copied or substituted. Utility NFTs is exactly this; however, the ownership of said image produces additional benefits outside of the value of the image itself. Utility NFTs can be used in brand and marketing initiatives, as a replacement for tickets or loyalty cards, within virtual worlds (the Metaverse), and in video games. The possibilities are endless.They can solve a number of real-world problems (process efficiency, authenticity verification, ownership transparency) and are a big part of our future. Here are some examples of the ways they have made waves in some unexpected industries.
In March 2022, Leslie Alessandra made both real estate and NFT history when she sold her home as an NFT on the blockchain for $654,310. NFTs have the potential to bypass many of the cumbersome and time-consuming elements of buying and selling property. Selling a house would usually require a fair amount of paperwork to verify its ownership; when a property is present on the blockchain in the form of an NFT, its ownership can be verified instantaneously. Third parties are usually necessary at various stages of the buying/selling process: marketing the property, transferring ownership, and overseeing the transactions involved. If the transfer of property and funds is moved to the blockchain, it can be achieved easily and securely without third-party oversight. The global reach of the internet allows objects on the blockchain to reach a far wider audience.Two companies leading the way in the implementation of utility NFTs in the real estate industry are Ripple, a real-time gross settlement system that provides crypto solutions for businesses, and ProprHome, a real estate market powered by blockchain, which recently announced their partnership. They aim to give new life to the property buying, selling, and renting processes; by leveraging the XRP ledger through an NFT, the partnership will provide quicker, more dependable, and energy-efficient transactions, vastly improving the experience for potential buyers, sellers, and renters.
A significant problem with blockchain-based industries (such as cryptocurrencies and NFTs) is their negative impact on the environment. Utility NFTs can be used to combat this; outside of encouraging users to move to carbon-neutral blockchains, companies such as IMPT have created a green marketplace where customers can buy, sell and burn carbon credits in exchange for NFTs.How it works:
- Users can sign up to the IMPT.io platform
- Once they are members, IMPT allows for the purchase of tokens using either cryptocurrency or card payments
- These IMPT tokens can be converted into carbon credits
- The carbon credits are minted into NFTs
- Carbon credits can be listed and traded on the IMPT.io marketplace
Members can burn their carbon credits to compensate for their carbon footprint. Every time a credit is burned, a new NFT is minted. These NFTs can be sold, traded, or held onto for investment purposes.
Mental Health and Addiction
One of the key attractions of NFTs is the way they can be used to create online communities. This has a lot of potential in many different industries; however, this can also be taken in the direction of providing support for people suffering from mental health problems. Awesome Possums is a long-term NFT project that prioritizes a positive message: providing help to those struggling with mental illness and addiction. The project strengthens its community through the release of its limited edition artworks, the purchase of which is the only way to become a member. They have an exclusive discord channel where members can meet, discuss and exchange ideas, and provide support groups for the communities the project is aimed at empowering. Awesome Possums also provide frequent rewards to members, as well as incentives to stay active and involved in the community (rewards, giveaways, tickets to live events, merchandise etc.) On top of this, they will be making frequent donations to charities aligned with their mission (voted on in Discord by the community) and contributing to scholarships aimed at helping disadvantaged and low-income families. The team also aims to host free counseling and therapy sessions, as well as provide motivational services, for their members.
Potential: Social Media
Today our online personas have become as important, if not more so, than our actual lives. You can see a person’s work history and reputation on LinkedIn, their thoughts and opinions on Twitter and blog sites such as medium, their interests and personal lives on Instagram and Facebook, and their hobbies on Meetup. Utility NFTs can offer another window into someone’s history by glancing through their public wallet. On display could be NFTs representing a whole host of things: presence at a concert or festival, completion of a marathon or fitness goal, membership of a club or group. Now that technology exists, it is undoubtedly that it will come to play a more central role in both industry and personal life. As shown, utility NFTs can be mobilized into assets for a business, as a way to streamline arduous processes, and as a force for good in the world. The only limit is imagination.
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