Introduced in 2014, NFTs went viral in 2021 when their sales boosted to $25 billion. The new tokens enabled artists to sell their works for impressive sums, inspired celebrities to monetize the new trend, opened new opportunities for real estate sales, and made gaming beneficial. But there’s more behind it — NFT influenced our perception of Property. Let’s point out how it has happened, and what fields are already benefiting from it.
A Brief Look Into NFT
NFT is defined as a non-fungible token. To understand this concept better, let’s point out the meaning of “fungible”. This word means that something is exchangeable. For instance, conventional fiat money is fungible: you can exchange $100 for another $100 but it will be the same. Cryptocurrencies, such as Bitcoins are fungible too: you can exchange them for other currencies that have the same value. Meanwhile, exchange of NFTs doesn’t work the same way, because every token is one of a kind and has a different asset bound to it.
No Copyright Issues
NFT attracts artists tired of thefts: all types of digital art can be easily copied so accurately that nobody will be able to tell the difference between the original and copies. Works of designers, illustrators, and even musicians are constantly stolen worldwide without any credits to authors. Meanwhile, each NFT token contains the date of its creation and the author’s name or signature, so it can’t be copied, changed, and altered. Moreover, if any NFT is sold to a collector, it doesn’t mean that this person gets full authority over it. In reality, creators still have their copyright rights regulated by the UK copyright law.
Buyers gain ownership over their personal property but have no other rights to the work. As a result, they may show the artwork to the public or reproduce it only by arrangement with the original creator. For instance, Kings of Leon sell their NFT music only for personal use.
Complete Security
Blockchain is called a “trustless” and “immutable” network, because people literally don’t have to trust each other to make transactions reliable. All blockchain transactions are immutability recorded, time and date stamped, so the information cannot be changed or deleted. Consequently, any asset converted into an NFT token can be shifted from a seller to a buyer without any risks of hackers attacks.
Immortality of Property
Physical arts age, spoil, and get lost. However, if any physical item is bound to NFT, it stays immortal and unchangeable with its value being shifted to virtual reality. For instance, when Banksy’s artwork was burnt, it gained more value as an NFT item. So, with NFT one doesn’t have to take care of physical objects or store them in vaults. Instead, one can use a digital frame to display any artwork he or she owns. Physical artworks can be placed wherever one wants, they may even be destroyed because the digital property is here to stay and to bring profit while the Internet works.
New Types of Ownership
NFT creates new types of ownership: though, in most cases, an NFT has just a single owner, it can be owned by a group of people. For instance, Constitution DAO tried to buy the US Constitution.
For this, there are fractional NFTs that can be divided into pieces. So, each owner of a fractional NFT will get a percentage of it. As a result, collectionning becomes democratized, more affordable, and inspires more collectors and investors to enter the market.
Meanwhile, NFTs can be also bought and sold with the help of multi-signature wallets. In a word, there is a single wallet that holds an NFT and requires several members to review the offered operation with an NFT and to confirm it with signatures.
Impressive Exclusivity
We know that collectors are nuts about exclusivity, and NFT is unique by itself. That is the secret of the Bored Ape Yacht Club’s success. This collection of unique 10,000 profile pictures minted as NFTs enables customers to get a one-and-only version of a disinterested-looking ape with randomly-generated features, accessories, and clothes. Moreover, NFT owners get exclusive access to extra NFT collectibles that they can resell.
However NFT is not only for the collectors: ordinary customers also seek personalization, exclusivity, and want to feel like they belong to a special group. According to Salesforce, such personalization may boost business outcomes by 97%. So, NFTs may be used to turn “belonging” into “property”. For instance, by various shops, restaurants, and other services we will discuss in this article.
Potential Anonymity
Security is one of blockchain’s key values. So, thanks to the special encryption, NFT purchases can be anonymous. On the one hand, it enables collectors to stay safe. On the other hand, it complicates the inheritance of NFT, because it is decentralized. So, there are no opportunities to track the owner via directories, and family members lack chances to find out whether their deceased relative had any valuable digital assets.
Influenced Spheres
NFT enables creators of all kinds to enter the market equally. For instance, an author of a tweet has the same right to represent his creation as an author of a huge realistic painting. And, though one may claim that it offsets the value of “the true” art, it broadens our outlook and shows that anything may have a huge value if there are collectors ready to pay for it. So, with the shift in the understanding of property and its forms, NFT influences various industries. Let’s distinguish the most notable ones.
Hotel Industry
NFT has a huge potential for the hotel industry, primarily, because hotel owners can upgrade the initial property they have. For instance, they are able to automate booking with smart contracts, earn royalties on secondary booking sales, reduce cancellations, and, consequently, lower prices to attract more visitors. Meanwhile, visitors, in their turn, may buy and resell bookings as property.
Daily Services
NFT has already influenced daily services. For example, some restaurants use NFTs for reservations. As a result, no mistakes can be made with mixed phone numbers, names, delays, or cancellations. Additionally, clients understand that they get something exclusive, and the feeling of belonging grows to convert them into loyal customers, fans of a specific brand. So, even eating out may be regarded as a sort of property.
Ticketing Industry
NFT is about to change the ticketing industry. Issued as NFTs, tickets to sports events will enable visitors to forget about losing physical tickets and getting the wrong seat. At the same time, they will have an opportunity to resell their tickets to collectors for a pretty penny, while venues will be blessed with royalties. Consequently, attending events is a property.
Video Gaming
The same approach, used in ticketing, would fit video gaming. For instance, if a game could be issued as an NFT, one could track who sells it. So, the original creators of the game could get their royalty going. Consequently, the big issue of the physical second hand market in the video game industry would be solved.
Branding
Brands are already using the concept of NFT for promotion. For instance, Papa Johns and Blue Diamond are issuing NFT objects to attract more customers and raise impressive sums. The thing is that fans become their “owners” in the sense that they hold something valuable, but still, the true brand’s property and the full control over it belongs to the companies.
Real Estate
NFT is already gaining popularity in virtual real estate sales. For instance, the Mars House was sold for $500.000. Meanwhile, though the real estate industry is considered to be slow in new technologies adoption, NFTs are also fit for representing physical land ownership. For instance, it may be used to confirm fractional ownership in rental properties without any third parties and, consequently, make this field more affordable and enable more people to invest in realty smoothly.
P2E Gaming
With the help of NFT, P2E gaming became really beneficial. The industry quarterly profits are now $500 million. The thing is that P2E is accessible for all and everyone. Briefly, a player doesn’t have to work from scratch or buy a pricey asset. Instead, one can borrow tokens via such renting platforms as Takeus.io, upgrade them via gaming, and earn a share of the tokens. Meanwhile, NFTs themselves still belong to the owners, holders, who benefit from the development of their assets. So, it means that borrowing any property is not about risks or losses, now it is about stable revenues.
Conclusion
NFT still has a long way to go, but it is already reshaping our understanding of property. Meanwhile, it seems to have a positive impact on business models. Will this change be revolutionary, and will it face any challenges? Will it influence more vital life aspects? Only time will tell.
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