As we look ahead to 2023, it is important to appreciate how the past year has been an evolution for NFTs. The blockchain-based concept found uses well beyond digital content, cementing NFTs as a cornerstone for blockchain applications across industries.
Considering how NFTs were placed at the start of the year against where they stand now, it is not only encouraging, but also inspiring to see incredible innovations in this once niche space of blockchains!
NFTs found successful applications in a variety of sectors. Let us look at some of the key milestones that NFTs achieved in 2022.
The Metaverse:
NFTs made games like Axie Infinity and many others household names this year, with their successful integration into metaverse-based concepts. In-game collectibles and exclusive rewards tied to NFTs made them highly valuable and even profitable to mint. With high engagement and participation, metaverse-based games rely on NFTs and Smart Contracts to assign and distribute limited reward pools.
NFTs could perhaps be an amazing route to monetizing your gaming hobby in the near future! NFTs and the Metaverse began to be great marketing tools as well. We are already seeing big brands like Nike having a presence in the metaverse, using it to allow product demonstrations and offering exclusive rewards to customers.
Users in Nike’s virtual store can not only try on new products, but also have access to reward programs, discounts and so much more even when they are offline. It is a great way to improve brand awareness and also engage with users creatively.
Enabling Art:
The digital art scene continued to flourish this year, assisted by the capabilities that NFTs provided. With the first ever NFT auction of digital art as well as a record sale of $69 million USD on a single NFT, their potential as channels of revenue for artists has certainly been underlined. Having said that, 2022 marked the most expensive NFT sale of all time, with Pak’s The Merge selling for a whopping $91.8 million USD.
It will be interesting to see how NFTs play out against the traditional models of production – and distribution – of digital content in the next few years.
Industry Disruptions:
Ethereum’s shift to a PoS validation model has seen NFTs penetrate a number of industries through various applications to existing processes. Their utility as immutable digital certificates has created a lot of scope for streamlining and optimizing a number of processes. This is especially pronounced in the entertainment industry, where the technology has proved its disruptive potential.
NFTs have also found applications in paperwork-intensive industries such as real estate and the government sector, acting as a sustainable as well as effective alternative to traditional documentation and record-keeping. For instance, many real estate companies are beginning to map property deeds to NFTs, removing the need for escrow services, lawyers and title insurance companies to be involved. It can also help in sharing the cost of ownership between different people, making multiple owners on a property more seamless and transparent.
As their utility continues to grow, NFTs are sure to find a place in the best of processes and practices across industries.
Crowdfunding:
NFTs’ inherent compatibility with Smart Contracts makes them the perfect vehicle for crowdfunding ventures. They are a secure, easy method of transferring funds between parties. Furthermore, the NFT could be set up to donate money to a specific cause as a royalty everytime it is resold.
The other advantage is that since blockchain platforms are decentralized, crowdfunding projects through NFTs sets up a transparent and secure system with improved accountability for all parties involved.A great example for this would be the Stoner Cats project. Owners or Stoner Cat NFTs get perpetual access to all of its future content.
Every milestone that the project achieves results in more content being produced, ensuring that NFT holders are incentivized to keep the project going, while also reaping benefits from it.
If 2022 was any indication, NFTs are sure to continue their rapid progress in industries across the globe.
As more users begin to jump on the NFT wagon, the technology has the potential to build a community of like-minded enthusiasts in addition to those looking to make a profit through trading. That is a potent mix of users for a concept that is built for those very purposes.
It has been a great year for NFTs. Here’s to a better one ahead!
(The author is Mr. Vijay Pravin Maharajan, Founder & CEO, bitsCrunch and the views expressed in this article are his own)
