What Do You Do With Your NFTs By Franklin Fitch
There seems to be a misconception that NFTs are only investment vehicles. This couldn’t be farther from the truth. In fact, what makes NFTs special is the fact that they have so much potential utility and means to be interacted with! Let’s take a look at all the things that NFTs can do outside of being simply bought and sold for profit.
First, it’s important to remember that there are many different kinds of NFTs. Each of those kinds does different things. For example, the purpose of a gaming NFT is different from an art NFT. Each serves different needs. When it comes to a gaming NFT the utility outside of profit should be pretty obvious. Let’s look at a few of the major categories of NFTs and examine how the use cases expand beyond flipping for profit.
Gaming NFTs typically have functional value in the game world from which they originate.
So, for example, Gods Unchained cards that can be bought and sold on the open market are actually items that are used to play the Gods Unchained card game more effectively. In this way, the cards are identical to Magic the Gathering, a very popular physical card game that has existed for decades. Early Magic the Gathering cards trade for high sums today, not only because they are scarce and there is demand, but because they have very high utility in playing the game.
Many early magic cards are considered OP (overpowered) compared to more modern card packs, so they are highly sought after by collectors. This is the source of the demand as it pertains to the game theory of MtG.
So in summary, gaming items as physical cards, or as NFTs, are sought after not just for flipping, but because they are functional items in-game. Other examples include cosmetic items. Think CS:GO (counter-strike) gun skins. Items may not provide material advantages but may be a social signaling flex to your peers in the form of a cosmetic item. Don’t underestimate the power of cosmetics! These items can be as valuable if not more valuable than functional game items, depending on the ecosystem.
Virtual land is an exciting sector of development and investment potential in NFTs. Whether it’s Decentraland, The Sandbox, Cryptovoxels, or Somnium, there is much excitement about the intersection between VR and NFTs.
Many VR worlds, like Decentraland, have land parcels (as NFTs) that you can actually purchase and then trade with others on the open market. You can liken these parcels to ‘virtual real estate’ for the simplest comparison.
So, if we’re using the reference to real estate, isn’t there more you can do with a plot of land than buy and sell it? Of course, there is!
Just like regular real estate, you can build on virtual land parcels! If you have a great corner plot in a busy section of Decentraland, why not build a virtual representation of your business there? Fully branded, with your colors and logo, perhaps even featuring models of your products. Increasingly we will see examples of this.
So, in summary, virtual land is just like real land, it can be flipped directly or developed upon, making it a functional utility based thing, not just a speculative investment.
Art is perhaps the most dynamic use case of NFTs. Many folks point to digital art and think it is somehow less viable than physical art, because physical art can be touched and can hang on your wall, but they believe digital cannot.
This isn’t true! Now let me first say I love physical art. I collect it, have it on my walls, and have spent untold numbers of hours at art museums. But let me say one thing and say it clearly.
Digital art is more durable, diverse, and capable than physical art.
Digital art cannot be destroyed by fire, water, or age in the same way physical art can. It is infinitely easier to transport and transact peer to peer. Its markets are on the straight and narrow path to being more efficient and more liquid. Its provenance is superior. And digital art markets are already far more equitable to artists, taking significantly less money from artists than galleries do, and giving artists money for secondary sales, unlike galleries.
Digital art can also be experienced in more diverse and more profound ways than physical art can. Let’s take a look at some of those ways.
- Infinite objects
- Collectors hub
At the beginning of the list, we have digital art frames like Meural and Canvia, which can hold many thousands of images, giving them greater utility than a regular art frame, and allowing you to curate your own galleries.
Infinite objects allow you to place short video loops into small blocks which you can put on your mantle, your nightstand, or give as a gift.
Voxels, Decentraland, Somnium, and Sandbox as we discussed are all virtual worlds where you can create and curate entire galleries for visitors to experience. The craziest part is you can even link objects represented in galleries to the markets where they originated, and see the purchase price and record of ownership.
Services like TokenCast allow you to stream NFTs to a device, and Collectors Hub interfaces with MetaMask to allow you to build your own galleries and collections with your purchased NFTs on any device. You can display on any combination of TV (specially designed ones for art like Samsung Frame or regular), phone, tablet, etc.
In summary, NFTs are profoundly utility-oriented compared to their legacy counterparts. The idea that NFTs are just a speculation/investment mechanism could not be further from the truth. NFTs have the ability to be used as tools to build, provide deep interactive experiences in the metaverse, be experienced in dozens of ways, and provide utility in-game environments. And these are just a few select sets of vertical use cases we looked at here in this article.
Hopefully, you found this helpful! Follow me on Twitter if you enjoyed this and want to learn more @cryptofitch
Deep human needs? Cabinets of curiosities? Veblen goods?
Or something more…
Let’s take a deep dive into the history and psychology of collectibles and see what makes #NFTs unique.
Part 1: The drive to collect 👇🏼
— Franklin Fitch 👀 (@cryptofitch) December 21, 2020