It’s common for people to fall into the trap of thinking that NFTs are just copies of digital art. Like blockchain technology, there are lots of innovative use cases for NFTs. Some of the greatest examples offer creative freedom and control to artists.
There are so many types of NFTs, and whether they are adopted en masse could spell the start of much-needed change for some stubborn industries. We’re looking at how NFTs can be used, and how they can give creative freedom back to artists and musicians!
Before, people tended to assume that blockchain technology was exclusively for cryptocurrency. But, as projects have developed, the world has been shown a variety of use cases for blockchain. We’ve seen houses being sold on the blockchain, and food supply ecosystems being decentralised and digitised. With technical expertise and enough creative thinking, blockchain-based web3 projects have the ability and potential to overhaul the way we do so many things.
It feels like more and more people are recognising blockchain’s exciting scope. However, NFTs aren’t quite enjoying that same level of acceptance.
Some people feel that adopting more accessible language is the answer. For instance, using the term “digital collectibles”, rather than “NFT”. The problem with that is digital collectibles is just one example of the types of NFTs and what they can be used for.
At Fractis, we believe that understanding the ways NFTs can be used, and the benefits they can have for creators, is the key to a more positive reputation for the tokens.
Table of Contents
What are NFTs?
Before we take a deep dive into the versatility of NFTs, we should probably break down what they are.
Sitting on the blockchain, an NFT is a non-fungible token, which authenticates the ownership of the asset attached to it.
The majority of NFTs are developed from the ERC-721, which is the data standard that was developed by Ethereum. Without getting technical, this standard allows creators to create unique NFTs, with the help of smart contracts.
If that was all a bit wordy, let us simplify it. “Non-fungible” means something can’t just be swapped. In this case, that means that NFTs are tokens that are unique. You can’t swap them the way you could swap cryptocurrency, or fiat money, like for like. Even if two NFTs appeared to be the same (the asset attached to them is the same music album or digital artwork, for example), they’d still be unique at their core.
The Value of NFTs
Sometimes, an NFT may be the only one of its kind, or it might be one of many. The rarity of an NFT often has an impact on its value.
Say a popular artist drops a collection of brand-new digital drawings as NFTs, but only made 5 available in the whole world, you can expect the price to be pretty high on the secondary market. It’s just the same as precious, original paintings in the physical art world. People’s esteem of the artist and the work, plus the scarcity of the asset, determine the value.
We are starting to see a reassuring shift in how NFTs are valued. Getting involved in NFT trading has, largely, only been available to those with bundles of crypto to spend. Inflated prices due to the novelty of having an NFT just for the sake of the NFT aspect has meant that the whole club has been fairly exclusive.
Recently, a house was sold as an NFT in the US for $175,000. Now, obviously that isn’t a small sum of money. But, in terms of real estate, that’s right about where you’d expect it to be. This suggests that the sale went through on the merits of the property, rather than the due to it being an NFT.
Why does this matter?
It shows that NFTs can be used to simply make processes, like buying a house, quicker, easier, and more affordable. Not all NFTs have to be unattainably expensive, or limited to pictures that don’t really serve much of a purpose.
Types of NFTs
Before we can get you really excited about the industry-changing potential of NFTs, we want to show you how functional they can be. Having already touched briefly on their uses as digital art and in the real estate world, we’re going to go a little deeper.
The blanket term that often gets used, erroneously, to describe all NFTs, digital collectibles come in a variety of forms. Like baseball or football trading cards, NFT collectors can get their hands on image-based collectibles to store in their wallet.
Bored Ape Yacht Club is a prime example of NFTs as digital collectibles. These artwork NFTs act as membership to a club, as well as a token you’ve collected. It’s not uncommon for digital collectibles to act as multiple utilities, granting access to clubs or giving you priority to drops in future.
There have now been a few cases of property being sold as an NFT on the blockchain. The beauty of this is it eliminates a lot of the usual headaches that come with buying a house.
Traditionally, buying a house involves a lot of waiting around. Solicitors on each end tend to take a while to respond or action next steps. This then results in high legal fees, which is never ideal when you’re already spending a big chunk of money.
When the process is tokenised, smart contracts take care of the legal stuff, and this is all executed automatically. Because the human element is largely eliminated, things are faster and more affordable. If real estate NFTs became more commonplace, fees for both sellers and buyers could be slashed by more than 50%, opening the market up to new buyers.
NFTs are a fantastic solution to stratospheric ticket prices. Too many times have people missed out on seeing their favourite performers because ticket touts have snapped up masses of tickets to resell for an unreasonably inflated price.
By selling tickets as NFTs, event promoters have more control over who buys tickets, how many, and how much they cost. It makes the process super secure as well, since it makes the possibility of fraudulent tickets much less likely. NFT tickets also speak to the collectors out there, since fan-bases often like to keep ticket stubs as memorabilia from gigs or shows.
Medical records, like patient information or medicine specifics, go perfectly on the blockchain. The security of this technology protects confidentiality, as well as protecting records against any malicious behaviour or manipulation.
A great example of NFTs used in the medical world is NFT birth certificates. Assigning an NFT version of a birth certificate to a newborn baby speeds up the process, and take the work away from already very busy healthcare workers. Because this information is then available of a distributed ledger, it’s easily accessible by other hospitals elsewhere in the world. If someone injures themselves when they’re abroad, vital information about them can be obtained much more quickly, ensuring effective treatment.
Patents & Intellectual Property
Whether you’ve invented a new product, or you’ve written a new song, it can be difficult to prove definitively that it is your idea, and you came up with it first. Finding a way of recording something that clearly shows the date, but cannot be tampered with, can be a challenge.
Creating an NFT that represents your intellectual property enables you to show the idea was yours, and the record is immutable and can’t usually be altered. These timestamped tokens are the perfect way to certify ownership of an invention or idea.
Giving Creative Freedom Back to Artists
At Fractis, one of our favourite types of NFTs is music NFTs. More specifically, music NFTs that provide artists with the opportunity to sell fractions of their music streaming royalties to fans and investors.
Historically, people believed that in order to make it as a musician, they needed to be signed to a major record label. Whilst getting recognition and validation from industry professionals sounds like an exciting prospect, it’s not all it’s cracked up to be. Ever heard of an artist being trapped in a crappy record deal for years? Or maybe you’ve heard about someone being signed then immediately dropped. It’s all too common.
How It Works
The types of music NFTs we mentioned solve this problem. The problem of power imbalances, and of creative freedom being snatched from musicians. If this is all sounding a little too idealistic to you, let us explain how it works…
- Artists create a musical work (single, EP, album, etc.)
- Musical work is minted as an NFT/s and put up for sale on Fractis
- Fans & investors purchase NFTs, creating instant revenue for the artist
- Artist gains loyal fans, as well as income that enables them to create more musical works
- The cycle continues
Some bonus steps within this process include fans earning money along with the artist. This is because NFTs on Fractis pay out every month when streaming royalties have been earned. The result is a passive income for both artist and investors, meaning fans share in their favourite musicians’ success.
Speaking of passive income, Fractis NFTs can be resold on the secondary market. If an investor made a good purchase, and the music linked to the NFT has blown up, they could make a neat profit. Thanks to wonderfully clever smart contracts, artists can set a percentage share so that whenever their NFT is resold, they’ll get a cut of the revenue from that sale. This system lets each party involved win.
Giving artists an independent means to earn revenue from their music gives back the creative freedom that stuffy and traditional music industry deals take away. Power and control over an artistic work should be in the hands of the creator.
Fractis strives to create these freeing opportunities for artists, whilst rewarding fans for their devotion and helping collectors invest in something positive.
Become part of an NFT movement that will reshape the music industry, and sign up to Fractis now!