NFTs - How are they evolving beyond collections?

userMarko Perajica

Today most popular use cases of NFTs are Collectibles i.e. CryptoPunks or Bored Apes. But the use of NFT does not stop there exclusively but continues to other aspects of our lives.

Some of the most important ones are:

  1. high end art
  2. fractional ownership of expensive art, real estate, cars
  3. identity verification
  4. community and social tokens
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🖼 High end art

High-end art belongs to art pieces that represent the highest standard of artistic expression. They can be in only digital form or digital that is also supported with its physical form. This means that someone as a buyer of the NFT has the right that the author sends to his home address a physical form of that art that the buyer can place on the wall or do the same as with a classic art painting. High-end art also includes the most expensive NFTs ever sold. At the very top lies a piece by Mike Winkelmann better known as the Beeple. His work reached an incredible $69M in March 2020 at Christie’s Auction House from an initial bid of $100.

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Why spend so much money?

Surely you wonder why anyone would spend so much money on some NFT if they could just screenshot it and use the screenshot as they wish. The reason why you would buy NFT is that you want to be its owner. It’s exactly the same with classical art, like the Mona Lisa. You can just take picture of it and put it on the wall if that’s what you want it’s great. But many people would like to own that artwork. Let’s take another example you can take picture of someone’s villa - however you have the same problem and that is that you don’t own it. You do not have the right to earn through passive rental income or any other rights that the rightful owner of that house has.

In addition to passive income, owning an NFT can also give you, for example, access to a conference and event to which only selected guests are invited, ie the possibilities are numerous.

🏡 Fractionalized ownership

Fractionalized ownership is realized through fractionalized NFT. Compared to classic NFT, it is exactly the same except that it has the possibility of division into several parts, thus giving a certain number of people ownership of one part of it. That part can be a new NFT or a regular fungible token. Tokens can be resold without affecting the price of the original NFT.

However, like all, fractionalized NFTs also have advantages and disadvantages. Some of the advantages of fractional NFTs are passive income through renting an NFT such as art (renting to museums) or real estate and earnings on resale. As for the problems, let's look at the most important ones. For the first problem imagine being the sole owner of a particular NFT. It implies that you have the right to do whatever you want to do with that NFT. However, this is not the case when you are in a situation where you own NFT together with 10 other people. Any decision on NFT would require a vote where all owners could participate and the share of ownership would determine how much your vote would be worth. The second most important problem that NFT is facing as the whole crypto market is also facing today is the great instability of the market which means big oscillations in prices. The more expensive fraction of NFT you have, the greater the amount of money you could lose.

🪪 Identity verficiation

NFT can also be used for ID cards, medical records and school and university diplomas.

🪙 Community and social tokens

Community tokens act as membership cards and provide access to a specific community, such as Facebook, Telegram or Whatsapp group, or the Discord channel. Their values ​​grow as group membership becomes more desirable. The privileges that these tokens offer to their owners include active and passive income, then the ability to manage or lead within a group, or access to exclusive entertainment or events.

In addition to community tokens, there are also social tokens. They are published and sold by an artist or public figure. Similar to community tokens, they offer certain privileges and access. Common privileges that social token ownership offers include early access to new author's content, getting to know the author himself or even royalties, and percentages of income from the author’s work.

💭 Conclusion

We can see that NFTs usage doesn't stop with collectibles, but continue to contribute to other aspects of our lives as well. They solve many problems that we have with today's internet in the concern of security and privacy. Despite the fact that NFTs are still in their beginnings we can see that today more and more companies are integrating NFTs and decentralized applications into their business, so there is no doubt that NFTs will in near future play an important role in our everyday lives. And to conclude with another amazing fact that NFT will also probably play important role in the area of ​​buying a private property. This means that we will very likely buy our apartment, house, or car through NFT.

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