You, Me, and Utility NFT's
NFT have adapted from just pictures on the blockchain to utility. Learn how NFT's are enabling new use cases and bridging online to offline with NFTs.
It's incredible to think that we are only at the beginning of the NFT revolution. I got my feet wet with NFT's March 2021. We experimented with creating our NFT collection, leading me down the NFT rabbit hole.
Fast forward to the end of 2021, and the entire NFT landscape has grown, adapted, and evolved since I first purchased my first NFT. Incredible to think just a short amount of time; so much can change. We witnessed a tool ecosystem built to report on NFT rarity, monitor wallets for sales activity, podcasts, and so much more.
What sparked my attention was the move of NFT's from pure collectibles to utility. The first collection I followed that made such a move was CyberKongz. CyberKongz launched their Genesis or first NFT collection, which allowed collectors to breed new NFT's and start earning a banana token that exploded in popularity and value.
Creators instantly started copying CyberKongz and other projects, adapting the utility to their projects. I believe this particular feature is one of the pivotal points in NFT history which sped up NFT adoption.
Bridging online to offline with NFT's
I've spent a large portion of my professional career trying to bring something from the offline world online. However, NFT's was the first time I noticed a significant value in connecting online to offline. Next, the adaptation of the NFT utility use-case was a game-changer for me and NFT's and where the bridge start connecting the two worlds.
More than just a picture on the internet now we have utility! What do I mean by utility, you ask?
Have you ever purchased a ticket for a concert, sports, or other major events through a secondary sale like a scalper? How do you know the tickets you are buying are indeed legitimate tickets from such a second party? You don't because you have no way to verify the ticket's origin or its authenticity.
Enter NFT tickets. Fans can now buy tickets to a major event, verify the authenticity and prove ownership as the physical ticket links to a digital NFT on the blockchain. Scan the QR code, and bam, and you can instantly verify the ticket's ownership.
If you want to sell this ticket to someone on the secondary market, the event can still earn a commission on the secondary sale. Ticket prices can even increase past the original purchase price, and the commissions automatically adjust according to the sale price. The secondary market can be an entirely new revenue stream for ticket sales, which is impossible with paper tickets.
Typically, you lose the touchpoint to the fans once the event is over. With NFT's events can continue dropping benefits to all the NFT owners. It can be in invites to future events, access to artists, and much more. This ability adds considerably more value to tickets than what we have today.
NFT Goods Purchases
Imagine any physical product delivered with an NFT. The NFT, just like in the ticket example, can verify ownership and authenticity. The NFT is the ownership contract for the product backed up to the blockchain. The blockchain also enables an entire product sales audit history.
One example is a cask of Whiskey which verifies ownership. The Metacask sold a Cask of Whiskey as an NFT for 2.3 Million Dollars.
Enter memberships the new entrant. NFT holders can gain access to clubs, restaurants, or memberships. By holding membership, NFTs can unlock continuously new value over the lifetime of membership. Unlike traditional memberships, they are typically non-transferrable. With NFT's, the membership can increase in value, allowing members to sell their NFT memberships for a profit.
Second, like the previous use cases, the secondary market can create an entirely new revenue stream from the membership creators.
The example membership above is the Proof Collective. This membership entitles the members to NFT drops, meetups, and more. This is just one example of what is possible with NFT memberships which verify your membership by checking your ownership of the NFT against the blockchain.
What's next for Utility NFT's?
We are only in the infancy of Utility NFT's. Technology and new industries are experimenting with what is possible, and we will start seeing more video game-related Utility, Metaverse, and soon Enterprise utility. Don't be surprised if your next Gym membership is an NFT or you are collecting NFT's at the grocery store. The sky is the limit, and I will definitely be participating every step of the way.