NFTs are much more than just digital art. But what exactly are they?
The word NFT simply stands for non-fungible token. It’s a digital token that’s a type of cryptocurrency, very much like Bitcoin or Ethereum. The difference with an NFT is that it is unique, and can not be exchanged “like-for-like” hence the term non-fungible.
If you ask the average person what an NFT is they'll likely say something like "digital art". NFTs provide an opportunity that's much larger than digital art.
NFTs can be used for storing anything of value, or anything thats worth collecting. This could include anything from a ticket to a sporting event, to owning a collectors edition album, it could even include digital items that are used in the gaming world such as a fortnite skin.
- NFTs will replace physical tickets, with digital tokens that are stored and traded through digital wallets.
- There will be a large rise in the amount of artists who no longer depend on a record label. NFTs will enable artists to fund their own careers through personalised experiences.
- NFTs will be used for trading physical assets that hold value. This will serve a new opportunity for creating generational wealth.
What are the real NFT opportunites?
We would break down the NFT opportunity into four core areas:
Lighting Fast Adoption
In 2021 alone, the NFT market cap grew by 1,785%. This explosive trend is seeing brands, creators and all other IP owners rapidly adopt NFTs.
Those who get ahead of the trend now will have a much better chance of winning before the bigger players get onboard!
More Than Just Digital Art.
The world is still unaware of the true potential for NFTs. The major disruption of NFTs will hit the world hard, enabling any industry to digitise.
You can assign almost anything to a smart contract, so the possibilities are endless.
An NFT creator gets to decide the scarcity of their asset. For example, an organizer of a music festival can use an NFT to represent a ticket. The organizer can decide how many replicas exist, but each replica would have its own unique ID (like a barcode). The organizer could also create a special NFT and offer it as a rare collectible.
Some NFTs will automatically pay out a royalty to their creators every time the NFT is sold. Royalties are one of the most powerful concepts of NFTs. Creators finally have a reliable way to receive money for their work.
There are no rules on how you can receive royalties, so you could put your house on an NFT, and then receive lifetime commission every time your house is sold to new owners.