As we trundle through 2022, it seems like some of the steam has come out of the NFT freight train. 2021 was, of course, the year of the NFT. Not only was “Non-Fungible Token” cited as the Word of the Year by Collins’ Dictionary, the industry also reaped in around $25 billion in sales last year. It has become, seemingly overnight, a huge global industry.
All of a sudden, everyone was talking about NFTs. You could find Disney NFTs, NBA “Top Shot” NFTs, NFL NFTs, McDonald’s NFTs – almost every bit of intellectual property has been given the NFT treatment. Some went in the other direction, capitalising on the new craze. For instance, Red Tiger Gaming created NFT Megaways, a slot game that you can find at real money online casino Canada sites. The point, as such, is that NFTs were everywhere.
But there are plenty of critics of NFTs, many of whom believe that they are worthless. And those critics will have been buoyed by the fact the NFT market has been slowing down in 2022, as with the crypto market in general. But while it has slowed down, it has certainly not grounded to a halt – far from it. In fact, last week, we learned that the famous viral meme of the “dancing pallbearers at a Ghanian funeral” was sold as an NFT. The price paid? A cool C$1.25 million.
Utility of NFTs is important
And yet, as we shall explain below, those who believe in the NFT “movement” see more than just the selling of memes or pixilated photos. They see the utility in NFTs, and that’s important because when the craze does die down – and it surely will – it will be the usefulness that’s leftover.
So, what do we mean by utility? Well, NFTs are not pieces of digital art. They are effectively tokens that store information. Some people describe them as digital receipts of ownership. The information on that receipt is stored on a blockchain, and that, most agree, has lots of possibilities.
To give an example, in February 2022, the first-ever North American home was sold as an NFT. The transaction took place in Florida, and it was facilitated by NFT-property firm Propy. Now to be clear, this was a real home and a real transaction. The only difference was that all that detailed legal and commercial information was stored on the blockchain by the NFT. So, as you might imagine, it cuts down on the costs of lawyers’ and realtors’ fees.
Save the rainforest
The Propy deal is but one of many similar things going on in the world of NFTs. Did you know, for example, that they were selling NFTs for plots in the Amazon rainforest? The idea here is that you buy the tokens to support the conservation of the land, but ownership (you own the token, not the land) also confers certain insights to you, such as access to satellite imagery.
Another area where the use of NFTs is growing is for identification purposes. No, we don’t mean people having an NFT as a profile pic on Twitter. Rather, in the sense of storing information – sensitive information – that, for example, might be needed for a KYC (know your customer) check, such as when applying for a bank loan. The mainstream adoption of such a procedure is not there yet, but it soon could be.
Perhaps the point we are making is that NFTs can get a bad rap in some circles. And that’s understandable. When you see crude pixilated drawings selling for thousands of dollars, sometimes millions, people are right to be sceptical. But there is much more to the industry than that, and the proponents of the NFT movement honestly believe they can change the world. Whether that’s true or not remains to be seen. But for now, NFTs are going nowhere.