NFTs are not just used for collections, artistic or gaming purposes. Project owners are also finding new inventive ways to use NFTs to make our lives easier. These NFT use cases are called ‘utility’. This segment of NFT projects ranges from event ticketing to diplomas, digital badges, or even parcel tracking. This segment is one of those we hear the least about but nevertheless covers a very wide field of application. In the coming years, we can expect more utility NFTs projects to emerge and change the way we go about our lives.
Here are a few utility project types to keep an eye on.
Decentralized domain names are NFTs that have simplified wallet addresses when sending cryptocurrencies. On Ethereum, wallet addresses are a sequence of 42 randomly generated characters.
This complexity leads to errors if the recipient’s address is handwritten or hacks that replace the recipient’s address when copying and pasting. To prevent these errors, it is possible to register a domain name (for example, nonfungible.eth) which will redirect to the address 0x841f3a12D45651C21EcfA26546C9E77F5Ff4Fe80.
On Ethereum, two services offer to register a decentralized domain name: Ethereum Name Service and Unstoppable Domains. They make it possible to resolve not only Ethereum addresses but also addresses on other blockchains or a website.
We already live in a time where our physical identity exists in tandem with our digital personas, from banking to social media, dating, gaming, and education. Many people’s lives exist in a dual digital/physical hybrid which is only set to expand in the future.
Bringing the physical, real-world onto the Blockchain through tokenization is revolutionary in many aspects.
Blockchain technology brings trust and accountability into an Internet of Technology (IoT) system. Non-Fungible Tokens in the ERC-721 standard can manage IoT devices and offer secure authorization and authentication for IoT devices.
One of the concerns faced by event organizers relates to ticket fraud. There are ways to counterfeit certain tickets and it is difficult to have full visibility of the exchanges that take place on the secondary market.
Thanks to NFTs, it is possible to identify and track each ticket in a tamper-proof way. In addition, it is possible to destroy or create non-transferable tickets once used. Near Procotol or Get Protocol have developed several solutions around event ticketing, online or in real life.
One of the recurring problems encountered in the delivery industries concerns the losses surrounding parcel tracking. Thanks to NFTs, Ownest has been offering a solution to this problem since 2017.
Each package is connected to an NFT but rather than attaching the physical package to the NFT, it is the transfer of responsibility from one delivery person to another that is highlighted. This way, each person who transmits the package also transmits the NFT to prove that he has transferred the package to the next person in the logistics chain.
Another example of NFT used as part of supply chain tracking is the luxury watch brand Breitling. In 2020, Breitling took a close interest in NFTs to guarantee the traceability of its watches. By downloading a ‘digital passport’, it was possible to see all the exchange history of the watch as well as the warranty and its origin.
Here, NFTs were solely used for their traceability of information.
In 2020 we saw more and more real-world players taking an interest in the potential of Non-Fungible Tokens. The path has been paved by video games and art, but today more and more countries and companies are starting to adopt this technology for uses as diverse as they are varied:
In the field of document certification such as diplomas or contracts, NFTs or even the use of blockchain have also found their place.
For the certification of documents as well as contracts, the startup Woleet has found a solution that does not require NFT to be effective. Indeed, thanks to the possibility of a signature on the blockchain, Woolet will timestamp the document directly on Bitcoin without the need to send a transaction. The digital file is hosted on a server.
This way, the public information is that of the signature but the content of the document remains confidential.
This is also the solution proposed by Verisart but with a specialization in artworks. A timestamp containing the various public information is recorded by a signature on the Ethereum blockchain and the certificate of authenticity is then accessible from his account on the site.
Regarding diplomas, Vietnam has partnered in 2020 with TomoChain to deliver diplomas to university students. Since then, the idea of using NFTs in Higher Education has continued to spread in the United States
The issue of digital identity is increasingly central. Whether it is an authentication validation from your phone, a magic link sent by email, or since 2020, a health pass, digital identity can take several forms.
All these solutions are stored on a central server managed by a third party. The idea of a decentralized digital identity would allow everyone to remain in possession of the data that belongs to them and decide exactly what data will be shared with others.
For the developers of these projects, a balance must be struck between what will be publicly available and the data that will have to remain confidential. NFTs will have a role to play in the future of decentralized identity.
In 2022, Ethereum creator Vitalik Buterin co-authored a paper on a new type of token, Soulbound Tokens (SBT). Unlike NFTs, SBTs will not be made to be transferred or exchanged once they have been created. In this way, they can be used to identify the user publicly while keeping personal data private.
There are several ways to prove your attendance at a physical event. Photos, videos, concert tickets, friends… so many elements that allow you to keep a memory and proudly say “I was there”. In the digital space, this is now possible thanks to NFTs.
The Proof of Attendance Protocol (POAP) is a token to claim during an event that proves its presence at a given time. Customizable, this token serves as a souvenir as well as irrefutable proof of presence at an event. It also can act as a community builder as it can be seen which wallets attended and these wallets can be airdropped future marketing NFTs or gifts.
Whether it’s to reach a larger customer base, modernize or simply try new experiences, the idea of associating an NFT with the sale of physical assets charms more and more people. For example, the NFT may take the form of a certificate of authenticity for a painting, a way to receive figurines, or the possibility of claiming a bottle of rare wine.
However, associating an NFT with a physical asset has two major flaws: the authenticity of the physical asset and the automation of the transfer of the NFT when selling the physical asset.
Since there is no way to remotely verify that the physical object that was sold was not a counterfeit, the original seller will has to be fully trusted.
For a painting, for example, it will be necessary to have absolute certainty that the physical work is really authentic before minting the NFT. Then, even if the first sale goes smoothly, the first seller will no longer have any visibility or control over the transfer of the painting in case of a sale on the secondary market.
For the example of a rare wine bottle linked to an NFT, if the NFT contains a one-time code to claim the bottle, a buyer of the NFT on the secondary market will not be able to know in advance whether the code has already been used or not.
Linking an NFT to a physical object can therefore create a feeling of false security induced by the tamper-proof nature of a blockchain.
Owning certain NFTs such as Metakeys or the Snoopverse member pass serve as a pass to access bonuses or exclusive events. Bonuses can have several forms: access to private rooms in a Discord, touch airdrops, access WhiteLists to interact with NFTs before others…
This is also used in metaverses. During the Metaverse Festival in Decentraland, an entire building was dedicated to Metakey and only those who had it in their wallet could enter to talk with other users but also claim exclusive wearables.
Regarding the Snoopverse Early Access Pass, it allowed owners to attend a festive evening in The Sandbox but also an invitation to the opening of the Cozomo art gallery and a reward multiplier for the stackers of the token of The Sandbox, the $SAND.
For lovers of chance, it is also possible to find NFTs that reserve surprises. This is for example the case with the NFT Boxes where the famous collector Pranksy allowed buyers to receive artistic creations from well-known artists in the NFT sector.
Once the NFT Box was purchased, it was not possible to resell it until the artwork had been sent. The artistic NFTs were sent at the end of the month and the NFT box then became exchangeable and transferable.
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