5 Practical Uses For NFTs

NFTs have captured the imagination of countless enthusiasts, art collectors, and even celebrities. Although their often eye-popping art can sell for hundreds of thousands or millions of dollars, many are left wondering what the real use of an NFT is. Non-fungible tokens have a lot more to offer than just expensive digital images, they can also provide tangible utility.

How to add utility to an NFT

A non-fungible token represents a digital asset such as an image, song, or podcast. The NFT is a record of ownership of the asset, added onto a blockchain, and is tied to the owner’s wallet. 

To add utility to an NFT a developer must offer access, opportunities, rights of ownership, or some other form of exclusivity through NFT ownership.

Five top utility NFTs

Event tickets

Tickets have been used for centuries to access events, plays, concerts, etc.; and as such have become collectible themselves. Around 2010, QR codes and digital tickets began taking over to reduce paper waste. 

However, many still value the collectible aspect of tickets. NFTs for event tickets are perfect for reducing waste and still providing collectibles. NFTs are inherently scarce – just like seats at an event – and event organizers can mint the number of tickets equal to the number of seats available.

In this year’s SuperBowl tickets were offered for the first time as “digital collectibles”. 

Metaverse concert promoter, Animal Concerts partnered with the South Korean blockchain, Klaytn, to sell event merchandise at K-Pop concerts.

Gaming

NFTs are not popular in the gaming community because they are seen as a money-grab that does not add substantive value to gameplay. 

Yet, NFTs still have their place in gaming. From new gaming models such as Play-And-Earn, NFTs provide unique value. Axie Infinity is the most popular example.

The real value of NFTs in gaming is rooted in the in-game economy. When tokens are incorporated into the storyline and virtual world of the game, gamers will be more likely to receive them. Especially if tokens can be traded within gameplay or, better yet, taken out of the game and traded on the open market. 

Avatars are another option NFTs offer. Tokenized figures that are unique to each gamer can be owned and used within games. 

One caveat to this is that interoperability is not extensive throughout the metaverse, meaning that avatars can’t transfer between all games.

Digital real estate

Projects like the Sandbox and Decentraland are known for their virtual properties where many different activities can take place in the metaverse.

Owning virtual land provides several practical uses. Advertising, hosting events, gameplay, and selling digital items in a virtual store, can all generate income for the landowner. 

Music

Instead of merely purchasing a track from a music downloading platform a user can purchase the same track as an NFT. Why? Because the audio file is provably unique and the user has ownership of the song. 

One popular music NFT platform is Sound.xyz which allows users to purchase songs and support music artists using cryptocurrency. 

Spotify has also begun to experiment with music tokens, launching NFT galleries for artists such as Steve Aoki and The Wombats.

Exclusive communities

Just like tickets to single events, NFTs can also provide membership to exclusive groups. Known as token-gating, a buyer can purchase one of this kind of NFT to gain access to the project’s associated community and receive exclusive benefits.

Adidas partnered with BAYC and a few other collections to create Adidas: Into the Metaverse. 

JRNY provides exclusive access to their developers’ studio where they display their future NFT projects to community members. 

Utility NFT roadmap

As the tokenization of things continues to evolve, NFTs will find new and exciting applications within the marketplace. 

Nevertheless, the market has countless opportunities to add value by adding utility to NFTs. 

As the current bear market continues, high floor prices and expensive gas fees become more difficult to justify. 

That is all the more reason for developers to figure out how to add utility to an NFT. 

Nevertheless, NFTs real-world utility is vast and filled with opportunities, most of which we cannot even imagine right now.