It’s safe to say that NFTs are taking the spotlight in 2022 with their vast use-case options. Adored by investors and content creators, they are introducing a new level of utility to blockchain assets. No, it’s not just digital art, although it’s the most popularized representation of non-fungible tokens. 42 Studio is exploring the NFT realm, only to uncover what’s important for content creators worldwide.
We begin our story by defining a non-fungible token or an NFT as a blockchain record directly tied to a real-world asset – a digital representation of a physical asset. Basically, it’s a digital asset with a clear ownership trail, all thanks to smart contract technology.
These cryptographic blockchain assets (most remarkably Ethereum and Solana) contain unique metadata and identification codes that make each token one-of-a-kind. Fungible tokens, like cryptocurrency, on the other hand, are all identical. We know that one Bitcoin is the same as any other BTC. When NFTs are in question, we know that each individual asset is distinctive from other assets in that collection. Let’s look at some examples of their utility.
The Play-to-Earn Gaming Model
From what we’ve seen so far, digital collectibles are the most trendy utility of non-fungible tokens. The gaming industry has thrived with the expansion of blockchain technology, as their in-game assets are now non-duplicable and hold a different kind of value.
Players get to enjoy a digital, NFT-infused token economy and earn different kinds of assets while they progress through game levels. These tokens may hold intrinsic value, and they can choose to sell or trade them at any time. Plus, these in-game assets can increase in value over time, which makes this utility type a profitable choice.
True Ownership, Digital Art Edition
In the real world, art has suffered numerous fraudulent activities, from copying and sharing to defrauding. The digital world and its artwork and media files suffered from the same fate even more so. It was too easy. But this was and still is an issue, as it tampers with the value of these digital assets and creates an ownership problem.
This is where NFTs come into play. Artists and content creators worldwide finally have a chance to switch their artwork, graphical designs, and photographs into NFTs that can be bought and sold. Most importantly, they have clear proof of ownership, completely excluding the issues mentioned above. Thanks to the blockchain and its permanent records, content creators earn royalties when their content is commercially used.
Digital Proof of Physical Ownership
After discovering the magic of non-fungible tokens, owners of physical assets learned that they could simply use them as proof of ownership by creating an NFT. This way, you can prove ownership history, while also proving the authenticity of an asset. This can be great for physical asset creators, as it works both ways with NFTs.
NFTs and Music
Nowadays, creators get to enjoy amazing technology that shields them from fraud and piracy efficiently. As the music industry switches to digital media, NFTs especially come in handy. Young artists need help turning profits, as their labels, music vendors, and ticket distributors take a large portion of their earnings.
NFTs, allow artists to connect with their audience in a more personal and direct way. Non-fungible tokens can guarantee artist’s rights are not violated, plus the entire profit goes to the artist.
Digital Tickets and Memberships
NFTs have this amazing superpower – they can become anything you think of. In this case, they can be digital tickets that prove online membership. Be it for a paid video game, an event, an online community, or an online subscription. Artists can use this to their advantage, as they can create NFT avatars as the ultimate proof of identity and authenticity.
As the digital world and the metaverse expand and web3 technology takes over, content creators and artists need to adapt and use this technology to their advantage. A new creator economy is emerging, and artists need to know what their options and opportunities are.
42 Studio will continue to educate on the matter, and if you’re interested in similar content, head to our blog, get your daily dose of worth-seeing info, and get inspired!