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1. Art and Collectibles
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This is the obvious one, but it extends well beyond digital assets. NFTs are simply the more efficient way of proving provenance and assigning ownership. The blockchain method of custody and transaction also makes it seamless to transact across geographic borders and without the fear of fraudulent sellers (or buyers). There are already companies taking advantage of NFTs of physical sports cards in unique and exciting models.
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Of all “real-world” NFT applications, gaming is perhaps the most “mature.” Essentially, this shifts the economic model for the game manufacturer from a one-time sale (purchase the game and play) to a model where the game is free to play but the assets within the game can be purchased (as NFTs) and then sold within an in-game marketplace where the issuer earns a transaction fee. Like the most powerful aspects of digital assets, this aligns the economic incentives between the company and customer. The NFT gaming market was valued at $173.70 billion in 2021 and is expected to reach $314.40 billion by 2027.
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Issuing event tickets as NFTs is a digital key to physical unlock. Tickets as unique code can eliminate fraudulent tickets and open new revenue streams for artists and enterprises. For example, every time a ticket is resold, the original issuer could retain a portion of the profit. The Coachella music festival notably sold NFTs that could be redeemed for unique real-world experiences and granted token holders a lifetime pass to the annual event. Further, Dallas Mavericks owner Mark Cuban has suggested that his NBA team would consider turning their tickets into NFTs.
5. Real Estate
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Blockchain technology can permit the conveyance of real estate ownership via a smart contract. The key value proposition of NFTs is that they make unproductive assets more productive as the value of the token or asset accrues to the token holder. For example, though a homeowner has equity in their property, the current framework doesn’t allow earning on that equity. As an NFT, however, a property becomes liquid; one could sell a portion of it, use it as collateral for a home equity loan, or benefit from every sale of the home in perpetuity. While the real estate market cap is over $280 trillion, only 1% of the market is currently traded on an exchange.
6. Intellectual Property
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According to IPwe, an estimated $1 trillion in IP “is never transacted upon because of the difficulties surrounding managing and evaluating assets.” NFTs present a revolutionary unlock for inventors and enterprises. They act as a copyright and protector of IP that can transform it into collateral or an asset on the balance sheet. IPwe suggests that tokenization provides greater transparency and can make transactions more straightforward and cost-efficient. Representing IP as an NFT allows it to be licensed, sold, and commercialized. Disney recently filed a patent to use blockchain to manage and track ownership of physical objects (toys, pins, collectible figurines, trading cards) and their digital counterparts in the form of NFTs.
7. Health Data
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NFTs could suffuse the historically opaque and cumbersome healthcare industry with transparency, efficiency, and democratized profitability. Currently, sensitive patient health data—like hospital records and genetic information—are difficult for providers to access, but valuable commodities for big data enterprises. Patient records are bought and sold, generating profits for a select few without the consent or participation of patients. Minting personal health information as NFTs could shift ownership, giving patients agency over who receives their data and the ability to monetize it. Further, harnessing data in this manner could streamline the exchange of patient care details between providers, enabling better collaborative patient-centric care. Deploying NFTs for health data could also allow pharmaceutical companies to purchase targeted information for research and ensure authenticity in manufacturing. Though the application is nascent, and a number of considerations must be addressed (like data security, privacy, accuracy, and intellectual property rights), NFTs could disrupt and democratize access to and management of patient health information.