A former Google engineer tells you which 15 fields NFTs can be used in

Written by: shivsakhuja @Magik Labs, 《The REAL use cases of NFTs: A Visual Exploration》

Compiled by: Bidpan

Have you heard of the technology maturity curve, also known as the Gartner hype cycle?

In 1995, Gartner Consulting categorized the maturity evolution speed of various new technologies and the time required to reach maturity into five stages based on its analysis and inferences: the early stage of technology emergence, the peak of inflated expectations, the trough of disillusionment, the slope of enlightenment, and the plateau of productivity.

Similarly, NFTs also fit into this curve, and perhaps they are more important than imagined. Shivsak, co-founder of Magik Labs and former Google engineer, conducted a visual exploration of the real use cases of NFTs being built and elaborated on the fields they will be used in on his personal social media. Here is a summary of his findings:

1) Technology Trigger: The emergence of potentially disruptive technologies;

2) Peak of Inflated Expectations: Early hype creates conditions for speculation around unproven technologies;

Correspondingly, during the NFT hype bubble in 2021, Beeple sold an NFT artwork titled "Everydays: the First 5000 Days" for $69 million. On the other hand, NBA Top Shot also sold hundreds of millions of dollars worth of digital video collectible moments that year, gradually pushing the speculation around NFTs to its peak.

3) Trough of Disillusionment: Early projects fail to deliver on promises, and the public begins to lose interest;

Currently, the trading volume and number of transactions of NFTs on OpenSea have dropped by 90-95% from their peak. Therefore, Shivsak believes that cryptocurrencies and NFTs may be near this trough of disillusionment.

4) Slope of Enlightenment: The technology slowly begins to showcase successful cases and gains real adoption;

5) Plateau of Productivity: Successful broader market applications with very clear market fit. Here, we will see mainstream adoption and the technology potentially becoming ubiquitous.

However, as an investor, the current trough of the bubble burst is not entirely a bad time. At this stage, the technology is still in its early phase, and it is more about finding use cases that have actually proven to be successful and impactful, even if on a small scale. So, besides the two main use cases during the hype phase, in which other fields will NFTs be applied?

The hype phase of NFTs is mainly reflected in the following two aspects:

Digital Art

Some wealthy individuals and collectors have purchased many JPEGs that seem "worthless" to the average person, continuously inflating the speculative bubble in this field.

PFP Profiles

Many people use NFTs as their profile pictures on social media platforms like Twitter to distinguish their accounts from others or fake accounts.

These are just the beginning. NFTs, as a way to represent proof of ownership, make proving ownership of digital assets easier than proving ownership of physical assets, which is why artworks and PFPs became the initial use cases.

However, NFTs have much untapped potential and more uses in the following areas:

Domain Names and Usernames

One major benefit of NFT domain names is that they can be transferred and traded, while domain names provided by many Web2 service providers are not easily transferable or sellable.

Tickets

Concert tickets and some other event passes are very suitable to be represented by NFTs, as their quantity is limited and proof of access to the event is required. NFTs can eliminate forgery issues and easily verify authenticity and ownership.

Additionally, NFT tickets are also very convenient for trading on secondary markets, which brings several advantages:

• A standardized market with protections for buyers and sellers;

Currently, tickets are traded on inefficient markets like Facebook and Craigslist, where buyers receive no guarantees.

• Free market pricing;

• Royalties for creators;

• Historical ownership data of tickets;

This means performers can airdrop future passes, discounts, and gifts to fans.

• They can also serve as badges to showcase user fandom.

Currently, the online ticketing market is estimated to exceed $30 billion and is rapidly growing. A number of NFT-based ticketing projects have emerged, such as: @GetProtocol, @SeatlabNFT, @YellowHeartNFT, @GUTStickets, @WicketEvents, etc.

Game Assets

Imagine someone spending two years accumulating a rare in-game item. This item clearly holds immense value for gamers, meaning it can be traded for dollars or exchanged for other game assets. NFTs will be able to accelerate this process, and in the future, assets in games will increasingly benefit from NFTs.

Additionally, the gaming industry is expected to generate $200 billion in revenue this year, with a significant portion coming from in-game purchase transactions, and the royalties from secondary market trading of these game assets provide the impetus for game companies to create NFT-based ecosystems.

Real Estate

However, currently, digital assets capture only a small portion of their potential, while real-world assets can derive much of the same value from on-chain NFT representations. For example, real estate in the physical world is also unique, has owners, and requires proof of ownership. Therefore, combining real estate with NFTs can bring more benefits:

• Assets can be subdivided to increase access and liquidity;

• They can be collateralized to improve capital efficiency (e.g., easily obtaining loans secured by real estate);

• Global investors can invest in specific properties, communities, and towns;

• Proof of ownership is particularly important in countries with weak legal systems, etc.

Moreover, the global real estate market is valued in the trillions of dollars, and NFTs are one of the most effective ways to prove ownership, resolve disputes, and increase access for global investors and homeowners.

But so far, we have only discussed the benefits of NFTs for transferable assets. What about non-transferable NFTs?

This is the concept now referred to as soulbound tokens or SBTs, which Vitalik Buterin previously wrote about in a post.

Degrees and Certificates

As I mentioned, NFTs are essentially digital certificates that anyone can verify. This is very suitable for use cases like degrees and diplomas, which you wouldn't want to be tradable. Therefore, they can be represented by non-transferable NFTs (SBTs).

Having a standardized, publicly verifiable diploma, degree, skill, and achievement proof on-chain means anyone can verify their legitimacy, and the same goes for all other types of certificates.

In the future, LinkedIn might provide verified checkmarks for users' degrees. At that time, individuals can obtain NFTs through freelance work to showcase completed work proofs, skills used, time spent, and examples, which can then be used on platforms like Upwork and Fiverr.

Since NFTs are an open-source standard, this means that NFTs earned from work completed on Upwork can also be displayed on a user's Fiverr profile, and a16z partner @cdixon has explained this concept well regarding data portability.

Anti-Counterfeiting Protection

Counterfeiting is one of the largest criminal activities in the world, with an estimated annual value of $2 trillion and continuously growing. Therefore, anti-counterfeiting technology holds significant value, and NFTs are working towards this.

Speaking of forgery, identity theft is also a huge real-world problem that NFTs can help solve. In the U.S., over 15 million citizens face identity theft each year, with losses exceeding $50 billion annually.

This is not surprising, as identity theft in the U.S. only requires a 9-digit number, which is often transmitted in emails, documents, phone calls, etc. How does Identity NFT address this issue?

• NFTs are unique and cannot be forged;

• NFTs provide a global standard;

• NFTs can be easily verified;

• Non-transferable NFTs (SBTs) are locked to specific wallets;

• NFTs can be revoked in case a wallet is lost or stolen.

This could also be one of the largest global use cases for NFTs. Because a user's identity often consists of more than one official ID, it may include multiple identities, and projects like @0xPolygon and @civickey are conducting research on on-chain identities.

Membership

Digital and physical memberships can also use NFTs to verify access requirements.

Voting

Additionally, NFT identities can address issues like voting verification. Do you remember the disputes during the 2020 U.S. elections? This needs no explanation as to why it is a problem worth solving. Moreover, the simplicity of online voting can also increase voter turnout.

Intellectual Property Protection

NFTs can be used to protect intellectual property, and they have two key attributes.

• Verifiability: IP ownership is clearly defined and publicly verifiable;

• Standardization: Opportunities for platforms that allow creators to earn royalties from their IP.

In terms of content, content submission users can also submit short videos, comments, and tutorials to exchange for NFTs. This is a marketing flywheel that can program rights into contracts, allowing contributors' content to generate profits when used in advertisements.

Additionally, @cdixon has stated that NFTs are completely independent of copyright, with a popular (and what he considers the best option) being CC0, which allows creators to profit while removing copyright, contrary to imposing scarcity, it increases sharing and richness.

Thus, music is a very obvious use case.

Currently, most artists earn very little from platforms like Spotify and Apple Music. Data provided by @PastryEth shows that the average earnings per creator are approximately:

• Spotify (per artist $636)

• YouTube (per channel $405)

• FB (per user $0.10)

• NFT (per creator $174,000)

Crowdfunding

Creators can also use NFTs for crowdfunding. For example, investors can receive NFTs representing rights to future earnings, which will be particularly useful for individuals in certain fields (like aspiring artists, athletes, actors, etc.).

Similarly, NFTs can also be used for crowdfunding highly impactful social projects, with NFTs serving as honorary badges for altruistic contributions. This has also led to the broader concept of financial NFTs (fNFTs), generating many unique financial contracts:

• A personal bundle of assets (a unique portfolio);

• Debt agreements with partially repaid lenders;

• Time-locked tokens (e.g., veCRV)

Legal Contracts

In general, any legal contract or document can benefit from NFTs, as existing paper/PDF proof systems carry risks of Photoshop manipulation.

Moreover, the benefits of blockchain security and its ability to trigger transactions through oracles will accelerate the adoption of Web3 legal services + contract development. Some DocuSign killer projects are expected to be built in 2022, delivering NFTs to contract executors.

Emails and Messages

Verbal agreements reached through emails and messages.

Medical Records

• Vaccination certificates;

• Covid test results;

• Prescriptions, etc.

Through the above sections, I have tried to cover most of the use cases I can think of, but it may still only scratch the surface. People are continuously searching for other creative use cases for NFTs, and in the future, NFTs will lead to the large-scale tokenization of off-chain value, which will impact the entire cryptocurrency market.