Learn about 11 NFT use cases from the practical (supply chains and digital identity) to the profound (art, climate protection and heritage preservation.)
What you will learn
Carbon offsets and carbon credits are often traded as digital assets and can be minted as NFTs.
NFTs can be used to create on-chain records of unique landscapes or raise funds for conservation efforts.
An NFT clothing company is embedding physical clothing with NFC tags that link to NFTs
When NFTs first reached mainstream appeal, they were primarily used for digital art and simplistic gaming applications, such as CryptoKitties. Over time, various industries have forged NFT use cases. These non-fungible tokens enable public viewership on an immutable distributed ledger, making them an ideal solution for projects requiring transparency and security.
As more companies realize the value of NFTs, new use cases are sure to arise. In this article, we'll discuss how NFTs are used in various sectors, such as music, real estate, and DeFi.
NFTs' unique attributes, combined with smart contracts, make them an attractive tool for many developers. These tokens can enhance creator earnings, promote visibility, and give fans a new way to interact with their favorite content and creators.
NFTs can be used to fund independent films. FF3 is a popular web3 crowdfunding platform responsible for funding Stephen Graves' horror film "The Dead of Winter." Filmmakers wanting to control their film's distribution may opt to release the movie as an NFT. For example, "Zero Contact," starring Anthony Hopkins, was released as an NFT in 2021.
And filmmaker Kevin Smith came up with a fresh approach by selling the distribution rights to his movie "Killroy Was Here" as an NFT.
Musicians can use a non-fungible token to give fans exclusive access to events, behind-the-scenes footage, and more. Kings of Leon became the first band to release an album as an NFT in 2021. The band had six "golden-ticket" auctions, rewarding each buyer with four front-row seats to one concert from every Kings of Leon headline tour for life.
NFTs can be distributed as free rewards for listeners. Alternatively, they can restrict access to certain songs or playlists. For example, Spotify began testing a token-enabled playlist feature in February 2023. This feature gives NFT holders exclusive access to certain playlists.
Fashion designers and luxury brands have been creating metaverse clothing and in-game items for several years. Aside from clothing in the virtual world, NFTs have many uses for fashion brands and the entire industry. For example, in April 2022, five fashion designers teamed up to sell 250 NFTs that would grant buyers access to New York Fashion Week. Buyers who didn't want to attend the event could opt to receive a physical item from one of the designers.
NFTs can represent virtual land in metaverse worlds, letting the land owners decide what is built in their plots. These tokens are also used to represent exclusive in-game items that can be sold to other players in secondary markets. Game developers and publishers can use gaming NFTs to reward their players with digital collectibles.
NFTs have yet to be widely accepted in the mainstream gaming industry, but many companies, such as Ubisoft, Square Enix, and Sega, have shown interest in using the technology.
Although NFTs are sometimes seen as an unnecessary burden on our Earth's climate, those minted on carbon-negative blockchains like Hedera can be used to benefit the environment. Carbon offsets and carbon credits are often traded as digital assets and can be minted as NFTs.
Projects like Moss.earth sell NFTs directly to consumers, with proceeds benefiting the environment. When someone buys a Moss.earth NFT, they support the development of a "green wall" to prevent deforestation in the Amazon.
NFTs can represent fractional shares of real estate investments. This practice lets investors gain exposure to the real estate market without buying property. Although it isn't common, NFTs can also represent an entire house. In 2022, a three-bedroom home was sold for $175,000 as an NFT. These tokens can also represent virtual real estate in the metaverse.
NFTs can be used to create on-chain records of unique landscapes or raise funds for conservation efforts. For example, the World Wildlife Fund's Non-Fungible Animals project raises money to help the organization protect endangered animals. Similarly, Givenchy released an NFT collection in 2021 and donated all proceeds to The Ocean Cleanup, a nonprofit organization developing technology to remove ocean plastic.
Clothing and costumes in virtual worlds are often minted as NFTs, allowing players to trade them with others. An NFT clothing company, Origin Thread, has taken this idea a step further by embedding physical clothing with NFC tags that link to NFTs. These NFTs prove the clothing's authenticity and act as a record of its sourcing information.
NFTs can be used in decentralized finance as collateral for loans or lent to others in exchange for interest. NFT lending is especially useful for those seeking utility NFTs or gaming tokens for popular NFT games like Axie Infinity. Additionally, many NFTs have staking features, letting their holders earn passive income in the form of cryptocurrency.
Websites and companies can use NFTs to authenticate a user's identity, a more secure verification method than signing in with a password. These tokens can also verify ownership of a digital asset or physical asset. For example, NFTs with attached geographic coordinates can be used to track the provenance of products, making it easier to know who owned an item before you and where it was sourced.
Influencers can use NFTs to monetize their online identity by minting "social tokens." These tokens reward buyers with virtual hangouts, Q&A sessions, and other perks.
Companies can mint NFTs representing physical products as they move through the supply chain. Each time the products move to a new link in the chain, the NFT can be transferred to a new wallet, representing the item's location. Companies can even use IoT devices and smart contracts to automate the transfer of supply chain NFTs.
NFTs have become versatile digital tools. Hedera aims to make it easier for brands to integrate NFTs into their workflow by providing low, predictable fees and a robust collection of NFT tools. Hedera offers immutable royalty configurations and fallback fees, meaning you can earn royalties even if a user transfers your NFT to another without receiving payment.
The Hedera network also supports Soulbound tokens, which are non-transferable NFTs representing an aspect of your identity. These tokens can represent educational achievements, certifications, awards, and other things you'd want people to know about you.
NFTs
NFTs: What, Where, and Why?
Dive in and learn more about NFTs: what they are, where they're being used, and why they improve on already thriving industries.
What Is an NFT Smart Contract?
An NFT smart contract is blockchain computer programming that manages and enhances digital assets, or non-fungible tokens.
NFTs on Hedera Projects
A growing community of NFT projects, applications, and ecosystem tools.