Having existed since 2015, NFTs (or non-fungible tokens) truly blew up in early 2021. This latest crypto phenomenon seems to capture the attention of investors, artists and celebrities alike. Only in February of 2021, an NFT for a years-long artwork—Everydays: The First 5000 Days—was sold for $69.3 million.
No one can project with certainty whether NFTs will be an explosion that loses heat quickly or a reliable cryptocurrency in the long run. To have longevity, investors believe that NFTs need to possess a wide range of usage and applications.
The Current State of NFTs
It’s not like people aren’t experimenting with new ways of using NFTs at the moment we speak, but the main application of NFTs is still buying/selling digital art. Because of this, NFTs provide a new playground for artists of the modern age. More importantly, NFTs greatly empower the digital art collection industry, evident by people buying a 36-second video from Steve Aoki for $888,888 or a tweet from Twitter’s CEO for $2.9 million.
Ironically, one of the earliest applications of NFTs was not simply distributing digital art. Cryptokitties is a video game where players can collect and breed digital cats where each cat is an original NFTs itself.
The Potential Markets for NFTs
While Cryptokitties offer a taste of how NFTs can diverge from its original usage, many people believe NFTs can expand far beyond digital art altogether. These potential markets for NFTs span across multiple areas—from real estate to fashion.
With many countries placing heavy restrictions on online gambling, it is no wonder why crypto casinos have gained incredible popularity. The anonymous, decentralized nature of crypto makes it a perfect match for gambling, and it is natural for NFTs to follow suit. In fact, entertainment software company Atari SA has already planned to open an online casino with Atari non-fungible tokens in April of 2021.
However, there is still some skepticism as to how an NFT casino will operate. Prizes in casinos have always been fungible sums of money—be it FIAT or Bitcoin—and this goes against the principle of NFTs. Will we see the day when people gamble for original artworks? With weird concepts such as social casinos, flying casinos, and casinos in churches floating around, nothing is impossible.
Virtual Real Estate
Decentraland may be the next new word in the dictionary,considering it has sold $1 million in virtual land. It may seem silly to some that people spend such money for an abstract, digital piece of ‘land’, but the evidence remains that Decentraland, Axie Infinity, The Sandbox and other virtual worlds are experiencing quicker growth than ever.
If anything, this proves that people believe in the value of virtual real estate. In the age of cryptocurrency, we’ve learned that anything can have value as long as enough people believe in it.
It doesn’t stop at land—the potential for digital real estate is boundless. There already exists in these virtual worlds NFT casinos, museums and other venues. We can expect all kinds of businesses to spring up soon and it may become the perfect imitation of the physical world.
Just like the ‘.com’ domain craze in the early days of the Internet, exclusive ‘.crypto’ domains have the potential to experience a similar boom. Unstoppable Domains has sold a blockchain domain NFT called ‘win.crypto’ for a record $100,000. Unlike traditional domains, users actually have permanent ownership of an NFT domain and you don’t have to pay a yearly fee to renew the domain.
Fashion has always been a popular interest for the mega rich, so it makes sense how virtual fashion can really thrive using NFTs. Virtual clothes can be worn by digital characters or displayed using 3D technology. But perhaps the most promising aspect of this is that users can add virtual clothes to their photos.
Imagine taking a picture of yourself and switching between dozens of outfits in an instant. Some of the clothing also come with special visual effects that are impossible to achieve for physical clothing.
If famous fashion brands follow the NFTs train and release digital products, the boom of virtual fashion will be accelerated. But many fashion enthusiasts are not yet familiar with using cryptocurrency so it may take some time for virtual fashion to transition into the mainstream world.
Many celebrities have already auctioned their own NFTs, but most of these still come in the form of artwork. Post Malone, however, partnered with Fyooz to airdrop new NFTs that enable FYZ NFTs holders to join a virtual beer pong contest with him. Because it’s an easy way for celebrities to make money and interact with fans, we should expect this trend to continue growing.