Widespread NFT Adoption Requires Web2 Creativity
It’s long been known that to get adoption of any technology or concept by the public, you need to start with the things that people know. The car was introduced as a horseless carriage and its power was referred to as horsepower, because that’s all that the public knew at the time, for example. Web3 and NFTs are no different.
Explaining what the blockchain is, what a DAO does, and so on, is usually described in Web2 terms, in order to paint a picture that the majority of people can understand. Therefore, in order to get adoption from the general public, it’s best that Web3 technologies are embedded into a standard known system.
If NFTs, for example, are a critical component of our decentralized future (and we believe that are,) there shouldn’t be a need to adopt a new way of doing things, but continue doing what we’re doing, with a better, trustless infrastructure beneath.
We just have to incorporate NFTs into more everyday things.
Start With What You Know
Presently, the most prevalent and widely known use for NFTs is for digital art. Collectors have long been willing to pay large sums of money for physical works of art. Now, with the help of NFTs, digital artists can create one-of-a-kind pieces that can be sold for cryptocurrency. This provides a new revenue stream for artists and puts the power of collecting art in the hands of the people who create it.
When it comes to the general public, anytime an NFT is mentioned, their first thought is about the Bored Ape guys. And they’re not wrong. But there’s more to NFTs.
Digital & Physical Art
Minting an NFT isn’t exclusive to digital works only - physical art can also be an NFT. Either by taking a physical piece and digitizing it, or vice versa. Now both versions can exist as an NFT, with a record on the blockchain. You can sell them individually, together, display them in a gallery such as The Superchief Gallery in New York, (a gallery that has NFTs on display,) or do what a group of private investors and NFTs named Burnt Bansky did. They purchased Banksy’s “Morons” for $100,000, minted it into an NFT, and then burned the original on camera. Days later, they sold the NFT for 22,869 ETH (roughly $380,000).
There are many ways to tokenize any art into an NFT, create scarcity around it, and rely on the chain to serve as a record of provenance, ownership, and originality.
As NFTs are a very good digital equivalent for these things, you can think of it as a passport to that item. Whether it’s art, or some of the examples below, or even something associated with your car or your house, you can manage that item with a digital passport/NFT. So beyond the fun, NFTs will bring a huge change in how both real and digital world assets are managed. And it is also another way to manage intellectual property as well.
The same can go for other situations.
Incorporating NFTs Into Your Life
Musicians can now use NFTs to sell their music directly to fans. This not only allows them to bypass traditional record labels, but it also gives them a way to make money from their music that is more efficient and transparent. In addition, by tokenizing their music, musicians can create a community around their work and connect with their fans in a new way.
NFTs also come in handy when it comes to ownership, credits, and royalties. When the NFT of the song is minted, the musicians, songwriters, producers, and so on, are credited on-chain. When the NFT is purchased, a smart contract automatically distributes the royalties. There are several companies, such as Reveel, for example, who are working on helping to distribute earnings between all the collaborators on a project.
As for the purchaser, the addition of an NFT doesn’t holistically change their listening experience.
Ticketing and Events
To cut down on counterfeiting, or price gouging, NFTs would be perfect to use as concert or sporting event tickets. Each ticket sold and issued would belong exclusively to the buyer. For example, earlier this year, the NFL gifted Super Bowl attendees a free NFT that was a digital keepsake of their actual ticket. On one hand, the addition of the NFT ensures the ticket is authentic and original, and the user has a piece of sports memorabilia that could potentially increase in value over time, like ticket stubs from a historic occasion.
This could be done at the ticketing level. Most tickets are digital and saved in a phone wallet. Those tickets are used for their venue access, and the NFT lives on chain and doesn’t impact the user whatsoever. The smart contract behind the scenes does everything.
This becomes especially important when it comes to resale. For example, The NFT Factory in Paris, is a gallery and learning space for NFTs and Web3. Recently, they’ve issued their tickets as a QR code on an app. They’ve found that local musicians, as an example, will personally sell their concert tickets for between 40 and 80 Euros. If they rely on a ticketing service or resale, the people attending the concert sometimes can pay up to 3X that for a ticket. It’s not that the ticket has increased in value, but it’s pure speculation that sucks value out of the system without bringing anything in exchange.
Currently the artist doesn’t see any of the difference between the price of the ticket they issue and the inflated price the fans pay. In order to fix this, The NFT Factory has created an NFT out of the ticket. Regardless of how it’s purchased, the artist still gets the same percentage of royalties.
This same idea can be applied to larger concerts as well. If a second-hand ticket vendor or scalper marks up a popular ticket, if it were an NFT, the artist would still get compensated proportionally to the value of the markup, removing the ability to speculate.
Social media platforms are already being used by content creators to monetize and promote their content, serving as a common ground between a buyer, seller, or marketplace to facilitate the sale. Digital art has already flourished on social media, with many artists’s follower counts demonstrating how dedicated their audience is. Now, they can mint NFTs and inform their community about the offering, announce an auction, or put it up for sale.
Specific social channels such as Instagram, Twitter and Telegram have already been experimenting with NFTs as a way to reward content creators. For example, in October 2022, Twitter announced that it will allow users to tip each other with NFTs and connect to NFT marketplaces. This not only gives content creators a new way to make money, but it also provides an incentive for people to create high-quality content.
Referred to as SocialFi (Social Finance) by Binance, this is the combination of social networking and blockchain finance. The SocialFi space lets users earn income from content creation, participation in DAO governance, NFT minting, communicating with other users and watching entertainment. Unlike the Web2 social networks, SocialFi projects provide higher levels of privacy and security for users' personal data and offer a more valuable user experience.
NFTs can also help with authenticating users on social networks as well.
Identity And Personal History
One of the most promising use cases for NFTs is in the area of identity management. By using NFTs, people can prove that they own certain digital assets, like photos or videos. They can also use NFTs to prove their identity online without having to rely on centralized platforms like Facebook or LinkedIn. It’s no surprise that our reliance on social networks and Google to sign into applications, has made identities increasingly difficult to protect.
This becomes especially important when it comes to vital identity documents such as passports and social security documents. Any and every document that attests to your identity, physical or digital, can be built as an NFT on the blockchain. This would cut down on identity theft, and in regards to passports, could potentially help with airport security, as the TSA and their global counterparts can easily rely on the chain and the NFT to confirm who you are. This would add another layer of security to such documents without impacting the document holder.
This logic also extends itself to health records. If all of your medical history, immunizations, treatments, and prescriptions could live on the blockchain as NFTs, it would offer doctors a decentralized and secure database to help patients, across all practitioners and hospitals, to be more efficient.
As for the patient, they can feel secure that their doctor has all of their information at hand.
Connecting NFTs With Everyday Activities
There are many potential uses for NFTs outside of what we’ve seen thus far in Web3. Imagine incorporating NFTs and their smart contracts into real estate or employment contracts, to ensure transparency and make them more efficient to manage. From ticketing to data storage and verification, there are a wide range of applications for this technology that go beyond just cryptocurrency.
For instance, Canadian retailer Canadian Tire has introduced a virtual tree decorator, that enables a consumer to pick an artificial tree, decorate it, and purchase the entire “set” at the store, and get rewarded with an exclusive NFT as a bonus gift.
As more people begin to experiment with NFTs, we will likely see even more innovative uses for this technology emerge. And, at the same time, there’s also been promising work on building a technology solution to bridge the gap between Web2 applications and Web3, thus making the mainstream use of NFTs a reality soon.