NFTs are the new trend, with digital artworks selling for millions of dollars. These unique digital assets on a blockchain, that started with Ethereum smart contracts, can be verified and distinguished via metadata and ID codes, and constitute a $40 billion market, attracting creative designers and creators from all different sectors, with a chosen blockchain acting as a sort of auction house.
At first, the surge in users rushing to buy up the rare digital kitties seemed to be just a fun experiment running on Ethereum blockchain, now this phenomenon has swept across the globe, attracting retail investors, fans of collectibles, and trend followers, transforming it into more than just collectible digital assets on the blockchain – they are assets of value with real applications across different industries.
But don’t get mistaken, their “non-fungible” aspect makes them very different from bitcoin. If you traded bitcoins, you would still get the same thing, but when you trade one NFT, you will get a completely different asset, that is because NFTs vary in terms of quality and kind.
This way, pretty much any valuable digital asset can be an NFT: art, in-game items, GIFs, design and clothes, domains, and even tweets.
The applications for Non-Fungible Tokens span across industries and companies are only just starting to discover how to integrate them into their business models.
While artists have a clear economic incentive to produce art digitally and convert it into non-fungible tokens, the concept is still rather new, leaving people unsure whether NFTs are worth it.
In gaming, its applications are especially notable, like GameFi, Play-to-Earn, and the latest innovation – a decentralized gaming ecosystem.
NFTs are also gaining popularity as they are becoming exclusive passes to clubs, communities, or even in-person experiences
With the rapid growth in NFT innovation and adoption, it will continue to evolve in its technology to drive greater change in the world. In this article, we’ll explore the evolving functionality of NFTs and where they stand in the future.
The usual benefits of NFTs are largely attributed to blockchains’ inherent characteristics, such as immutability of records, freedom of issuance, ease of coding, transaction speeds, and the ability for assets to be exchanged among other users.
These characteristics offer an array of different benefits for individual users, specifically creators and collectors.
NFTs protect the copyright of creators such as artists, creative designers, and issuers of unique assets, and also give royalty incentives from the later resale of their work on the secondary market.
On top of that, they use blockchain technology to cut out the middlemen and provide any creator with a global platform to show off their work.
For collectors, NFTs act as a certificate of “ownership” for the original work or as an investment asset that can be resold for a profit. Most importantly, collectors can directly support their favorite creators with fast and traceable transactions.
These non-fungible tokens have morphed into a new audiovisual art medium, seizing control of the art market by force.
NFTs are clearly more than a passing craze, as big auction houses have already recognized them as a new kind of art, evolving them from simple JPEG files on the blockchain to valuable items across several industries
Moreover, the functionality of NFTs in games makes them both an investment asset and a utility instrument that grants players abilities.
As a result of GameFi’s development, new uses for NFTs have emerged, such as Loot, an NFT project that consists of 8,000 unique “bags” of RPG adventuring stuff.
Loot’s logic is straightforward. It begins with a bottom-up method, in which game designers can construct a game, or even numerous games, around a set of NFTs, assigning elements that correspond to the properties of the NFTs.
This is a project that uses the decentralized nature of blockchain to create ecosystems where the community decides where it goes and what happens next
In essence, goods are distributed via a random number generator, which awards gamers with Loot bundles. Owners of Loot bundles may be able to gain access to such goodies in these yet-to-be-released games.
Loot’s project has been very well accepted by the community, with over 6,000 bags being sold out in less than four hours, with the most expensive bag fetching up to $1 million.
In essence, efforts like Loot are reshaping the NFT and gaming paradigms. The potential to transform games into interactive ecosystems that listen to and reward player participation is ushering in a new era of gaming and community experiences.
These efforts turn game developers into supervisors who only maintain a blank canvas while users act as makers and movers of the game’s universe.
It seems like these initiatives have a bright future ahead of them, but nothing is certain yet. But as far as we can say, it’s always exciting to see how the innovation unfolds in the months and years ahead.
At the end of the day, it will be up to the community to decide how such decentralized gaming ecosystems will develop.
In-game NFTs are now a reality and will continue to be a way for players to earn crypto and other assets while playing, which is what makes the Play-to-Earn concept so appealing—the opportunity to turn your favorite game into a passive income stream.
Play-to-Earn games are straightforward and simple to comprehend. By playing the game, players own and enhance the value of their in-game assets, which they can subsequently sell on a secondary market like the Binance NFT Marketplace to benefit.
The majority of these games also provide in-game cryptocurrency awards, ensuring that active players are rewarded financially for their participation.
The increasing popularity of NFTs has resulted in more tangible utility, such as exclusive access to in-person bonuses, luxury objects, and services.
With the entertainment business quickly following the digital art market in making waves, celebrities have begun to use NFTs to communicate with their fans and sell unique content like music recordings, signed photographs, and branded fashion collections.
The more popular an object is, the more expensive it is.
One example is Lewis Capaldi that has announced a special NFT Mystery Box Collection on Binance NFT, which includes physical incentives.
The ‘Big Fat Sexy Lewis Capaldi Red Card’ included a signed guitar by Lewis Capaldi, a studio session with the celebrity, tickets to a hidden live event, and other exclusive physical goods.
Other perks included a secret live event and a backstage chat with Lewis Capaldi, thanks to another set of NFTs in the collection
Collectors may win a personal training session with Oleksandr Usyk and a pair of signed professional boxing gloves at Oleksandr Usyk’s Premium Auction on Binance NFT.
The most recent trend in the world of NFTs is the use of these tokens to give limited groups exclusive access. These NFT avatars, allow VIP users to access a community of like-minded people with shared values and assets.
They are used as a digital membership card that shows off status and gives entry to exclusive clubs or communities, similar to actual membership clubs.
An example of this practice is A Bored Ape NFT, which allows access to the Bored Ape Yacht Club Discord channel as well as a number of privileges and special benefits to its owner.
The NFT world is constantly developing and attracting greater interest.
Rather than existing as one-off NFTs like a digital art piece, our prediction is that NFTs will gradually grow into richer ecosystems of various assets and projects, particularly in the NFT gaming area, with initiatives like Loot, GameFi, and metaverses constantly growing and getting more supporters.
The number of use cases in the NFT industry will continue to rise, as will the number of users and partnerships with traditional businesses.
NFTs are getting more environmentally friendly as well. Binance NFT, for example, instead of using the typical PoSA mechanism to host NFTs, uses PoS.
The introduction of “greener” technologies will also allow NFTs to have a smaller environmental footprint, so resolving some of the criticisms leveled against them.
Bonanza Design loves new technologies and our team constantly writes about them. Follow us for more.
Receive handpicked content on design, UX, Innovation and sustainability every week