If you haven’t already caught on, NFTs are a whole lot more than digital art and one-of-a-kind profile pictures. In fact, NFTs and the technology underlying them may just be one of the most important digital revolutions in human history. Not convinced? Today we’re going to explain how NFTs will change the world beyond the realm of digital art. Let’s dive right in.
This is Part 1 of the 2 Parts blog series. There is a lot to talk about and share. So stay tuned!
The current landscape
Market conditions are bearish and morale is low, but a closer look under the hood of the crypto market reveals steady NFT trading volume and interest, as well as some undeniable figures that indicate the NFT craze has only just begun. For example, the gaming industry alone is worth over $90 billion dollars and NFT technology has already begun to revolutionize the landscape and usher in a new era of online, blockchain-based gaming. Furthermore, despite the turbulent market conditions of recent times, the last few years have seen the NFT grow in a way few other markets have, reaching a whopping $40 billion valuation in 2021 and continuing to grow in 2022, with more and more reputable names and brands jumping on the bandwagon.
More than just digital art
For the vast majority of people, NFTs are synonymous with digital artwork, collectibles and memorabilia. This is understandable as NFTs have already begun to transform the art landscape – but this is just the tip of the iceberg. A basic understanding of the technology behind NFTs quickly reveals just how game-changing this technology is for industries ranging from real estate to gaming to medicine and much much more.
In a nutshell, NFTs are non-fungible tokens that exist as a record on a blockchain and are associated with a particular digital or physical asset. The ownership of an NFT is permanently and securely recorded on blockchain, and can be easily transferred from person to person. You can also add in conditions and utilities to the NFT, making them highly versatile and perfect to use in place of traditional contracts or agreements.
The ability of NFTs to reliably prove digital ownership is a key part of our journey towards an increasingly digital world that does away with middle-men and old, inefficient systems. They are an extension of the blockchain revolution, offering us new possibilities and a way to exchange and own virtually anything of value in a secure and reliable way. So without further ado, here’s how NFTs will change the world BEYOND the world of digital art.
Contracts and Temporary Ownership
NFT technology is poised to change how we make deals, buy insurance, rent houses, purchase tickets and verify our identity. As it stands, a standard contract is essentially a legally binding agreement between two people, usually overseen by a trusted third party or middle man. Smart contracts and NFT technology present a new way to make deals and do business that removes the middleman and replaces it with airtight code containing all the conditions and stipulations of a certain agreement.
Here’s just a few sectors which NFT and smart contracts are likely to revolutionize in the coming years:
NFTs go far beyond the virtual world. As we speak you can actually buy real-estate and pay for the property with a cryptocurrency like Ethereum. Once the payment is complete, the buyer receives a unique NFT token that acts as a proof of ownership.Where once a real estate agent needed to be involved, two people can now transact directly with each other using a blockchain, removing the need for lawyers, agents, banks, commission fees and the usual waiting period.
Put simply, what was once a complicated, long and drawn out process of buying a house will become a simple and secure peer-to-peer transaction. What’s more is that NFTs can have conditions added to them in order to meet the needs of rental or temporary ownership contracts. After a specified time period is up, real world data could be fed through an oracle and into the smart contract, automatically and instantly reverting the ownership and utility of the NFT to the original owner.
Real estate is just one example of an industry that could greatly benefit from NFT technology. In reality, any industry that relies on legally binding contracts can be optimized by NFTs and smart contracts, especially if a contract is complex and multifaceted. Take the contract of a salesperson or a professional athlete, there could be a number of conditions, guarantees and contingent bonuses depending on their performance and various other factors. These conditions could be added directly into an NFTs smart contract and when a certain part of the criteria is filled, money could be transferred directly, automatically and securely into the recipient's cryptocurrency wallet.
End of Part 1 of 2 parts blog series.