Hey friend 👋,

A few months ago I did a “Three Blockchain Use Cases” piece - my friends have given me a lot of eye-rolls whenever I start explaining NFTs (although my friends usually do that), so I thought I’d tackle the same challenge with NFTs.

Let’s get to it!

NFT Use Cases: Part One

To start with, what’s an NFT?

Non-fungible tokens are a unique type of tradeable crypto asset that are used to prove that a person owns certain items, either real or digital.

With NFTs, when you’ve purchased an item, you now have custody and officially own it - and this process takes place on a blockchain. You basically use the blockchain as a ‘traceable database’ (or chain of ownership) to ‘mint’ (or create a token) that’s associated with the item.

NFT’s being put on a blockchain provides evidence of ownership that can be traced and validated. I can search directly on a Google Sheet or database with your name (or in this case, a wallet address). Blockchains are hosted on computers or devices by folks around the world (even you or I can signup to be a host), so it’s decentralized and not controlled by a single company or institution. NFT’s can also be used to resell items later on.

So, we’ve learned NFT’s are a certificate of ownership. This opens up a ton of opportunities which we’re going to explore - let’s get into some use cases:

1. Music

NFTs can be a game changer for artists and fans. Why is that?

• Artists - can make a living off 1,000 true fans rather than waiting for millions to stream on other platforms (ahem Spotify) - all while retaining 100% of their music rights

• Fans - get access to perks & benefits. Plus, they get to show off their fandom while building a digital collectible.

One of the counterarguments I get from the above is: “we can do all this without NFTs and the Blockchain!” - technically true, we can get fans’ email address from those who signed up to previous shows and email that group a specific offer. However, it limits the offer to certain types of goods it can offer and isn’t the smoothest experience (as any email marketing or CRM specialist will tell you).

Just because we have paper maps, doesn’t mean we don’t need Google Maps!

So, back to it - the music industry currently has:

1. Record labels - sign up artists to their label HUGE cuts of their future earnings & creative freedom

2. Crowdfunding - lets fans donate to their favourite artists for not much in return

NFTs allow you to buy an artists’ NFT (a digital product, song or something else), show them you’re a loyal supporter and they can reward you with perks or literal royalties on the music they create. But the key difference, is it’s up to the artist, compared to a record label.

Artists get money, while fans get status, access and potentially a financial return.

Example NFT music platforms:

• Dibbs

• Royal

• Sound.xyz

• Audius

2. Events

Picture this - you’re at a sports game or concert and your ticket is on your phone - not so different to how it currently is, right? Now, picture that ticket being an NFT.

Meaning, using my terminology from above, it’s a “verified certificate of ownership”.

This would cut down on scalping and make it easier to transfer tickets since they would exist on a blockchain.

NFTs can also be used for loyalty programs.

For example, a customer could earn points stored as an NFT. These points could then be redeemed for discounts or freebies.

The best part? These points can’t be hacked or stolen, as the NFT’s are stored on a blockchain!

A few ways they could be valuable:

• Exclusive experiences - NFTs confer status on the owner - tying them to an exclusive experience (like lunch with a keynote speaker or access to an invite-only area) can offer a sense of recognition and value.

• Exchanging tickets - event organisers could use NFTs to allow ticket holders to transfer their pass to someone else in advance of the event.

Example NFT event platforms:

• SeatLabNFT

• GUTS Tickets

• Wicket

• NFT Tix

3. Fashion

Whenever I think of the Metaverse, I imagine a digital place to meet, interact and hang out - kinda like the arcade when we were kids, but a virtual (more fun) version.

As you do in the real world, you think about what you’re going to wear - in a similar way, the virtual world won’t be that different.

We’re going to buy ‘virtual garments’ (we already are - think of ‘Skins’ in Fortnite) to show status and prestige.

We even have luxury brands trying to make an early claim to the space:

• Gucci sold a digital-only bag on Roblox for $4,000

• Dolce & Gabbana auctioned a 9-piece NFT for $5.65 million

I predict Fashion NFT’s will reduce the risk of fraud (authenticating high-ticket fashion items can be costly & cumbersome) - I imagine NFTs will serve as a certificate of ownership for luxury goods.

Example Fashion NFT companies:

• Syky

• Genies

• Fabricant

Conclusion:

NFTs are going to continue being a divisive topic - there will always be nay-sayers and those that reject what this novel technology can bring, while others will leap out and lead the tidal waves ahead.

I’m firmly hoping to be in the latter category.

🔗 Links Of The Week

❓ What is a Blockchain?

Always a big fan of Technically and thought this post earlier today was timely before today’s publishing deadline - the post has a good TLDR and diagrams to show: How a blockchain is created, why it’s useful and some interesting use cases.

🎾 How Roger Federer Became The Only Billionaire In Tennis History

A pretty insane account of Roger Federer - tennis legend, the master of the one-handed backhand, sound businessman, and all-round good-guy. His 3% stake in On Running is now worth $300m…

This VC is slowly automating his job

How a VC is using GPT-3 (from the makers of OpenAI which produced the off-shoot that is ChatGPT) to remove repetitive tasks from his day-to-day.

Until next time 👋

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Fahim