What Are NFTs?
By this point, you hopefully know what an NFT is, and if you don’t, they’re basically unique digital pieces of property with provable ownership built on blockchain technologies. They’ve become popular in the art world and have drawn in a great deal of attention from musicians and video game companies, so why are people talking about the ‘fad’ of NFTs dying off?
Hype Causes Concerns
Well, that’s because the general view of NFTs is almost always limited to the above examples, and they are also in the same ‘category’ as cryptocurrencies, so they’ll naturally be treated with scepticism. Indeed, the NFT market recently went through a significant hype phase which saw billions of dollars’ worth of transaction volume accumulate within months, and predictably, that hype has died off, for the moment at least.
NFTs are, in my opinion, the best thing to happen to digital assets since stablecoins. They have real utility beyond creating value through randomly generated pixel art (here’s looking at you CryptoPunks), NFTs can be programmed to have a myriad of functions that go beyond being the next way to make a quick buck.
Ongoing Revenue for Artists
A cool part of NFTs is that a creator can programme their NFT to pay them a percentage of the sale every time an NFT passes owners. Meaning that platforms such as Spotify and Instagram can no longer endlessly profit from creatives whilst barely creating any value for the creator.
That’s already transformed the marred landscape of royalties and rights. NFTs can also hold, deny, restrict and grant the rights of individuals on specific assets, meaning exclusivity for the owner, which has many applications in finance and enterprise settings.
Kings of Leon NFT
The NFT created by the Kings of Leon is a prime example of just that. What they did is release an NFT version of their new album, and more than just being a digital copy of the album, the NFT grants the owner many privileges, such as guaranteed front row seats at every future concert, for life.
It also provides other perks like VIP cab services to and from gigs, alternative album artwork, additional art features as well as the opportunity to re-sell the NFT and perhaps make a profit.
Are they a fad? No chance. But know this, we’re essentially in the Sega Genesis era of NFTs, and we’ve got a generation or two to go before these things go from niche to fully realized products.