NFTs are becoming increasingly popular because they offer a new and effective way to generate sales and engage customers. As new NFT use cases emerge, brands and individuals from across industries are creating their digital artworks to attract new customers, gain recognition, and bypass third parties such as agents, distributors, and galleries.
According to a report by Grand View Research, the global NFT market size is expected to reach $211.72 billion by 2030, growing at a CAGR of 34.2% from 2023 to 2030. This blog will shed light on the history of NFTs, along with their key trends and exciting use cases that are shaping the future of NFTs.
NFTs and their origin
NFT stands for non-fungible token. It is a unique digital asset that is stored on a blockchain. NFTs can be used to represent ownership of a variety of items, such as artwork, music, videos, and even real estate.
The history of NFTs can be traced back to 2014 when Kevin McCoy created the first NFT, called Quantum. Quantum is a digital image of an octagon that changes color and moves like an octopus. It was minted on the Namecoin blockchain and sold for $4. Afterward, they became popular in 2017 with the launch of CryptoKitties, a game that allowed users to breed and collect digital cats. Since then, the NFT market has exploded, with billions of dollars worth of NFTs being traded in 2021.
Now Let’s have a look at possible ongoing and upcoming trends:
Increased mainstream adoption:
NFTs are becoming increasingly mainstream, with celebrities, athletes, and brands all-embracing the technology. Celebrities like music artist Snoop Dogg, NBA star LeBron James, and even the digital artist Beeple have made headlines by entering the NFT arena, either by creating their own NFT artworks or participating in NFT-related events.
Moreover, leading brands are recognizing the potential of NFTs for marketing and engagement, with companies like Nike and Coca-Cola exploring NFT campaigns. As NFTs become increasingly visible through these high-profile endorsements and collaborations, it’s safe to assume that the trend of mainstream adoption will persist and grow stronger.
NFT-Powered Digital Identity
NFTs have the potential to revolutionize digital identity systems, offering secure, verifiable, and tamper-proof representations of personal information. For instance, consider the concept of digital passports or voting IDs built on the blockchain as NFTs. These digital credentials could provide a secure and immutable way to verify an individual’s identity or voting eligibility. Such a system could enhance the security and transparency of elections and identity verification processes.
Decentralized Autonomous Organizations (DAOs) Reinvented
NFTs can play a pivotal role in the creation and functioning of decentralized autonomous organizations, transforming governance through smart contracts. For example, Decentralized Autonomous Organizations (DAOs) are entities governed by smart contracts, and NFTs can be utilized to represent ownership or voting rights within these organizations. Holders of specific NFTs could participate in decision-making processes, contributing to a more inclusive and transparent form of governance.
This innovation has the potential to reshape the way communities, businesses, and even governments operate, with decisions made collectively and autonomously by token holders.
Rise of NFT-Powered Social Networks
NFTs could be used to create new forms of social media and online communities. For example, Picture a social media platform where membership is granted exclusively through ownership of a specific NFT. Users who hold this NFT gain access to a privileged community, where they can interact with like-minded individuals, access premium content, and engage in unique discussions. This innovative approach will leverage NFT ownership to curate meaningful and exclusive online interactions.
The rise of utility NFTs:
Utility NFTs are NFTs that provide holders with access to exclusive products, services, or experiences. These NFTs are becoming increasingly popular, offering holders a more tangible value proposition than traditional NFTs.
Moreover, companies are increasingly using Utility NFTs as part of customer loyalty programs. For instance, an airline could issue Utility NFTs to its frequent flyers, providing them with priority boarding, lounge access, or even discounted airfare. These NFTs not only reward customer loyalty but also create a sense of exclusivity and belonging.
Here are the top use cases of NFTs:
Digital art and collectibles
NFTs are currently being used to represent digital art and collectibles, such as paintings, sculptures, and music tracks. This allows creators to monetize their work in a new way and gives collectors a unique way to own and display their digital assets.
CryptoPunks, Bored Ape Yacht Club, and NBA Top Shot are just a few examples of popular digital arts and collectibles that have generated billions of dollars in sales volume. These NFTs represent unique digital characters, trading cards, and video highlights. As the NFT market continues to grow, we can expect to see even more innovative and groundbreaking use cases for NFTs.
NFTs are being used in games to represent in-game items, such as characters, weapons, and land. This allows players to own their in-game assets and trade them with other players. For instances:
Axie Infinity, Gods Unchained, The Sandbox, and Decentraland are all popular games that use NFTs to create unique and engaging gaming experiences. These games are all part of the growing play-to-earn movement, which allows players to earn real-world money for their in-game accomplishments. NFTs have the potential to revolutionize the gaming industry by giving players more control over their in-game assets and by creating new ways for players to interact with each other and with the games they play.
Musicians are using NFTs to distribute and sell their music directly to fans. This allows them to bypass traditional record labels and keep a larger share of the revenue from their music.
For example, the band Kings of Leon released their album “When You See Yourself” as an NFT, and the artist Grimes sold a collection of digital art and music NFTs for over $6 million. As the NFT space continues to develop, we expect to see even more innovative and groundbreaking applications for NFTs in music.
NFTs are being used to represent ownership of virtual real estate in metaverses such as Decentraland and The Sandbox. This virtual real estate can be used to build and sell virtual properties or to host events and experiences. For example, the company Metaverse Group has purchased over 12,000 parcels of virtual land in Decentraland for over $2.4 million.
As the NFT space continues to develop, we expect to see even more innovative and groundbreaking applications for NFTs in real estate.
Fashion brands are using NFTs to create and sell digital fashion items. This could revolutionize the fashion industry, as it would allow brands to create and sell unique and exclusive fashion items that cannot be duplicated. For instance:
Nike acquired RTFKT, a company that creates digital sneakers and other collectibles. This acquisition shows Nike’s commitment to the NFT space and its belief in the potential of NFTs to revolutionize the fashion industry.
NFTs in Metaverse Gaming
Maxime L., head of content at NonFungible.com, believes that the metaverse is a major game-changer for the NFT market. The metaverse is a virtual world where people can interact with each other and with digital objects. NFTs could be used to represent ownership of digital assets in the metaverse, such as land, buildings, and avatars. Two of the most popular metaverses are The Sandbox and Decentraland. Both platforms allow users to buy and sell NFTs, and they offer a variety of games and experiences.
These are just a few of the many potential trends and use cases for NFTs. As the technology continues to develop, we can expect to see even more innovative and groundbreaking applications for NFTs.