Non-fungible tokens, or NFTs, started as unique pieces of digital art with verifiable ownership. While these art-related crypto collectibles are still around, and some sell for millions of dollars, the industry has evolved quickly.
Today, some of the most impressive NFTs are those that come with a form of utility.
What Is Utility in NFTs?
By definition, utility is the state of being useful, profitable, or beneficial. In the NFT space, utility speaks to the useful aspects of an NFT.
You see, there’s quite a bit that can come of verifiable ownership and smart contracts that execute themselves when specific target actions take place. These abilities are creating an entirely new industry centered around solving significant problems across a wide range of sectors.
Examples of NFT Utility
NFTs have a wide range of uses with the most common being:
If you’re an avid gamer, you’ve likely worked pretty hard to get a specific car, weapon, or skin that gives you an advantage in your favorite game. Unfortunately, when you beat the game and move on, the items you earned in the game become useless.
You can’t sell them or even trade them for something valuable in a new game you picked up.
NFTs are changing the gaming space by providing users with ownership of the items they unlock in crypto video games. For example, when you breed cats in CryptoKitties, the new cat is yours to sell, trade, or keep in your collection.
Several collectible companies are turning to NFTs to improve their businesses. For example, there are wine companies that sell high end bottles of wine to collectors. Some companies are attaching NFTs to the wine bottles and when collectors buy them, they receive the NFTs rather than the bottles. The high-end wines are stored in optimal conditions, and when the collector wants his bottle, he redeems his NFT.
Event ticket fraud is a big deal, but NFTs have the potential to solve the problem. Many venues have started issuing NFTs as tickets for entry to sporting events, concerts, and more.
When you buy a ticket to one of these events, you receive an NFT. Then, when you go to the event, your NFT is your ticket through the gate.
Why Utility Is Important
NFT utility has the potential to reshape multiple industries, and anything that’s disruptive is valuable. As the uses of these technological innovations continue to expand, demand in the industry as a whole will continue to expand as well, leading to further value growth.
So, when looking for the next NFT project you plan on backing, make sure to dive into the utility attached to the project. If the project has the potential to disrupt an industry, it also has the potential to become incredibly valuable.
That’s All for Today
That’s all for today my friends. Come back next Thursday to learn about doxxed and undoxxed NFT project teams and what the difference means to you as a collector.