It’s about time we separate digital art from NFTs, as NFTs can encompass so much more.
Non-fungible tokens (NFTs) are usually lumped together in conversations regarding digital art. Most art museums and exhibitions warmly welcome NFTs to be displayed in their gallery spaces, adding to the preconceived notion that NFTs are meant to be art for art’s sake, and only for art’s sake.
However, NFTs and digital art shouldn’t be equated to one another, and giving each other the same definition will limit what each categorisation can mean.
The debate of whether NFTs should have use cases or not has been plaguing the industry, and can be attributed to public opinion associating NFTs with digital art constantly. As the definition of art can even just be defined as “something someone has created”, NFTs feature much more than just the creation aspect of art, but integrates how marketable it can be.
NFTs are roughly defined as digital assets, and it would be correct to say that NFTs inherently have a financial aspect to them, being a form of “token”.
The NFT market is reliant on collectors looking at floor prices (average prices of an NFT from a specific collection), and potential resale value. Artist and project credibility, community engagement, and the number of editions are also factors that are put into collection consideration. NFTs are inherently financialised.
Flipping NFTs can also highlight the absurdity of the fiat financial system – if someone can make equal enough money, or even more while bartering JPEGs, then there’s more value to an NFT way beyond just being any old JPEG on a screen.
The rise of NFTs has brought on a new class of scams, namely, rug pulls – where makers of an NFT abruptly jump ship and disappear with collected funds from project supporters. As there is a demand for owning these assets, artists are debating whether or not to start being part of the industry.
But NFTs are not just limited to being artworks. Beyond being assets for gaming, NFTs can be used beyond the digital realm.
NFTs can be an answer to current problems in ticketing events, where fraud and counterfeits can run rampant.
As blockchain technology makes it possible for verification of a valid ticket to happen with ease and efficiency, NFTs as tickets can bring in additional revenue by offering more perks – and in the case where there are ticket scalpers, event organizers, stakeholders, and artists can also enjoy ongoing royalties from marked up prices.
In addition, NFTs give birth to a whole new class of merchandise for fans and community members to engage with artists and events.
NFTs can also be used in real estate and can make the process of buying and selling property faster and more efficient. As real estate NFT holders can have access to the history of any property that they own, technology can make the process of knowing whether a property (or broker) has gone through legal disputes, while having a record of who has previously owned the property.
NFTs in real estate can also bring about fractional ownership of property – which can be a source of shared income between multiple individuals who choose to co-own a real estate NFT.
The process of co-owning requires immense time and paperwork, and introducing smart contracts and NFTs to those hoping to add properties and housing to their investment portfolios would make the process easier and more efficient.
Fashion brands have been part of the NFT sphere for a while. Brands have dropped NFTs alongside physical collections and can add to the hype. To cite a particular case, luxury brands Dolce & Gabbana have made $5.65 million by releasing physical clothes and NFT counterparts together.
NFTs can also create further transparency in supply chains. Anyone can see the process of how a piece of clothing – or even how food is made before they choose to make a purchase. Additionally, the blockchain can be used for cultural preservation initiatives, which can effectively help the tourism industry.
It’s about time to push toward the idea that NFTs are their class of assets and objects, with their specific uses. Although NFTs are a perfect vehicle for independent artists to engage with their audience and cut out profit-sucking middlemen in transactions, NFT technology can do so much more to help all walks of society.