NFTs are the hottest ticket in crypto, breaking into the mainstream thanks to headlines about multi-million dollar art sales from creators like Beeple. Celebrities have jumped on the trend, with Janet Jackson, Eminem and Mick Jagger among the most recent to issue their own NFT collections.
Any trend in crypto comes with the inevitable warnings that it’s all just one big bubble. However, the fact that old art market stalwarts like auction house Christie’s swiftly moved into the NFT space is a powerful sign of NFTs’ disruptive potential to shake up traditional modes of art consumption and engagement. And while it’s fair to say the segment of investors who can afford to drop tens of millions on digital artwork or music is relatively small in the grand scheme of things, brand new project OneOf aims to democratize the movement, offering the opportunity for fans to engage directly with their favorite artists at accessible price points, bringing equity back to these primary stakeholders through mainstream decentralization. But make no mistake: Digital art and music are just the tips of the iceberg. Here are three more emerging use cases for NFTs set to go stellar in the coming months and years.
From the catwalk to the metaverse
Fashion has taken a blow over the last year or so, as splashing out on new threads has been low on the priority list while many of us have been confined indoors. But the shift to digital hasn’t escaped the notice of big fashion brands, the savviest of which have taken their labels into the virtual world. For instance, last year, Gucci launched the “Gucci Sneaker Garage,” a segment of their app where gamers could customize their very own digital designer sneakers.
However, the NFT element introduces the same scarcity and exclusivity, which prompts fashion lovers to reach for their wallets in real life. Moreover, the increasing prevalence of digital fashion offers the potential for brands to connect with entirely new online audiences of gamers and esports fans.
DIGITALAX is one example of a blockchain project pioneering the concept of digital fashion, and the project has even developed an innovative concept known as “Fractional Garment Ownership.” It uses the 1155 token standard to allow designers of different elements of a garment, such as the shape and fit or the fabric pattern and texture, to collaborate and receive attribution and royalty payments for their contribution.
DIGITALAX is also making inroads to the burgeoning esports sector with its own platform called ESPA – the first indie and modded esports platform that is pioneering casual play. IT allows designers, developers and players to level up and go from amateur to pro through its native Web 3.0 ecosystem.
Skins in the game
The convergence of digital fashion and esports brings us to the next big use case for NFTs – gaming. Blockchain-based gaming has been slow to take off, mainly because legacy platforms like Ethereum simply aren’t designed for the kind of micro-transactions and volume of traffic that gaming generates. Therefore, many blockchain games are actually hybrid efforts, with game logic and data hosted on centralized servers.
However, NFTs offer vast potential to transform the concept of in-game assets, which is big business. The video games market is on track to reach $300 billion in 2025, and a significant proportion of that value will be generated from sales of in-game assets.
Blockchain gaming project Planetarium has been working to build a platform where games can operate based on their own blockchains. Because all game elements are entirely decentralized, all in-game assets on the project’s flagship application, Nine Chronicles, are NFTs by default.
Players can choose from limited edition costumes, or skins, with custom animations, which are tradeable in the game’s P2P marketplace. They can also craft their own items using raw materials within the game, minted as one-of-a-kind NFTs.
From DVDs to NFTs
A third use case for NFTs, which has so far been virtually unexplored, is videos. There have been a couple of headline-grabbing instances, such as the recent NFT sale of the SNL sketch, featuring Pete Davidson and guest Jack Harlow, titled “What the hell’s an NFT?” A video of the sketch was later auctioned on NFT marketplace OpenSea, where it fetched 171.99 ETH, about $350,000 U.S. dollars.
The biggest challenge in issuing video-based NFTs is file storage. Blockchains simply aren’t designed to store large files the size of a movie or TV show. However, there are significant opportunities in video NFTs. The age of streaming has all but killed the idea of limited-release box sets, meaning fans have to look to physical merchandise to get their fix. However, video NFTs could re-open that market. They could also provide new routes to audiences for Indie filmmakers by reducing their dependence on commissioning editors.
Now, the vision looks set to become a reality. VideoCoin has recently teamed up with Filecoin, which currently harnesses 2.5 billion gigabytes of file storage via its decentralized network. Ultimately, the partnership offers the possibility for anyone to mint, store and trade their own video NFT. The VideoCoin project opens up intriguing possibilities for filmmakers and fans, but also into how other types of video content are monetized and distributed, such as sports events or videos from YouTube influencers.
VideoCoin has even gone a step further in solving another challenge with NFTs – that of permanent ownership. Currently, if the company issuing an NFT folds, then there’s a risk that the investment becomes worthless. The token itself may continue to exist, but the media it represents may disappear. VideoCoin is pioneering a new “proof of ownership” feature that uses digital rights management technology along with ephemeral proofs on the blockchain to ensure that the longevity of an NFT issued on its platform is guaranteed.
The use cases here are just a few areas where NFTs still have plenty of room for expansion. The last year sparked a digital revolution, and NFTs help to bridge the barrier between the digital and physical worlds, meaning that far from being a bubble, NFTs are here to stay.