NFTs are contributing to the tokenization of the economy, taking advantage of the ease of blockchains to eliminate borders and simplify access to their services.
Thanks to Non-Fungible Tokens (NFT), different economic sectors would have new tools and markets to generate more equality. The use of NFTs goes beyond their speculative nature. Here we will examine some sectors where NFTs are already changing how things get done.
NFTs, real estate, logistics, music
Selling or buying real estate using cryptocurrencies is becoming more and more common, but NFTs go a step further. In addition to facilitating the purchase, the property can be registered in an auditable way, thanks to the blockchain's unique registration properties.
Propy is one of the real estate companies already conducting real estate transactions using NFT. Less than two months ago, it sold a house worth $650,000 in Florida formatted as an NFT.
Bacon Protocol is an NFT project that allows obtaining financing through mortgages represented in NFT. How does the system work? You have to convert the property into an NFT and take out a secured loan for the property's value. Instead of using a bank, you get the loan through a decentralized protocol. Bacon Protocol lends the money that other users have deposited in the protocol to earn money. Everyone gets some advantage, the lenders and the company. Due to the efficiency of the blockchain, Bacon Protocol users get a return between 2 or 3% for lending their money, compared to the 0.1% usually offered by banks. They use the advantages of Decentralized Finance (DeFi) and the tokenization of assets.
Fractional ownership in real estate
Another use of NFTs within real estate is fractional ownership. It is possible to use NFTs to represent the ownership of physical items or real estate so that the whole gets divided among several people. An example of this might be the ownership of a newly constructed apartment building by a group of investors. In this case, each apartment is a fraction of the whole apartment, and the investors would access their share through an NFT, which they can trade in different markets in a decentralized manner.
This situation can also occur in entire homes or residential complexes. Investors could hold these tokens and receive an income or profit-sharing from capital appreciation at the sale. People buy and sell fractional ownership in rental properties in a liquid market without intermediaries, which would open real estate investments to many more people, creating better options for those in need to unlock equity without borrowing or moving.
Commercial Sector Logistics
Another of the most appropriate uses of NFTs is supply chains and trade logistics. The reason is straightforward: NFTs can represent almost any goods, allowing for tracking them quickly, thanks to the accountability of blockchain.
Projects such as TradeLens, by Maersk, IBM Food Trust, or IBM Blockchain for Logistics are already a reality within logistics in the civilian sphere. Maersk and IBM have experimented the most with such technology using TradeLens. Through TradeLens, networked ports can identify each ship, container, and the contents using unique NFTs, helping port workers and authorities track the provenance and destination. You know what cargo is moving on each vessel and other valuable data for global trade.
But the usefulness doesn't end there. The U.S. military has also been testing blockchain technology to solve various logistics problems, a task in which the Defense Logistics Agency (DLA) has shown great interest. It has an extensive application, especially when considering the magnitude of an army's logistics work, like the U.S. military. It is necessary to manage food, weapons, ammunition, equipment of all kinds, medicines, documentation, and everything the U.S. Army needs in the target country. Hence, the DLA classifies this task as one of the most complexes in the military, and its difficulty increases dramatically in times of emergency.
NFTs and music
Music is another industry where NFTs already have a significant impact. In this sector, NFTs, in addition to songs and songwriters, could be used for music videos, tickets, special access, merchandising, and royalties. NFTs can represent a particular track released by the artist or the company, which would make the NFT a prized collectible.
Streaming companies can also use NFTs for special events, thus adding value to their services. For example, they can offer transparency for artists' royalties for streaming their music. It can even go further, allowing the artists to manage it all, bypassing the major labels, and opening the door to decentralized music generation and profit negotiation.
A good example is YellowHeart. It is an NFT marketplace specialized in the music industry. Here we can find records, music, and NFT collections of well-known groups such as Maroon 5 or Kings of Leon. Or Audius, a decentralized music streaming platform built on Solana's blockchain. On Audius, artists, fans, and developers interact with each other through the AUDIO token. The platform allows users to pay artists directly with AUDIO tokens, thus eliminating the numerous intermediaries involved in artist revenue. One of the most recent is Fluctua Records.
NFTs are also being used to fund projects. One example is Flyfish Club, a New York restaurant that will open in 2023 and only be accessible by purchasing an NFT. Each of the NFTs in the establishment will access the restaurant and a private club only for token owners.