NFTing The World
We hear a lot of things are in our future.
Bitcoin is the future.
DeFi is the future.
NFTs are the future.
Actually, all of this could be correct. There is no reason why each of these should not materialize. They are off to a great start, something that will expand as time goes by.
Focusing upon the last one, what is the potential of NFTs?
That depends upon who you talk to. Mark Cuban is showing a huge interest in the industry, becoming one of the leading advocates. In fact, he made one of his Tweets into a NFT and sold it for $900. Many, including myself, thought it was a bit pricey but hey, that is the free market.
Speaking of pricey, Justin Sun obviously has extra money to spend. Jack Dorsey decided to make his first Tweet into a NFT and put it out to bid. According to Coindesk, Justin Sun has a bid of $2 million on the table.
Finally, last year William Shatner, of Captain Kirk fame, sold 125,000 NFTs pertaining to trading cards he that were created to capture different parts of his career.
Obviously, we are seeing the celebrities capturing this market. The question is, however, outside of collectibles, what can the average person do?
Here is where we see great debate. The potential, naturally, is unlimited. As it gets easier to create NFTs, people from all over the world will be able to capture anything. The question always comes back to value but this is up to the market participants. While most would not pay $900 for one of Mark Cuban's tweets, someone did.
The key thing to understand is any asset can be tokenized. This instantly puts it into the liquid financial arena, meaning people have options.
For example, imagine if we get to the point where one can create a NFT against his or her house. Then, that NFT is taking onto a DeFi application and the owner yield farms it out.
How would that change the circumstances for people?
Also, since NFTs are applicable to a single item, a sequence release of them let's everyone know what is available. Think if the opportunities for a luxury manufacturer such as Gucci. Not only could the NFTs serve as validation against counterfeiting, it will also allow all purchasers to know the rarity of a particular item.
Presently, people look at NFTs and DeFi as separate categories. However, the key is to merge the two concepts together. Let us ponder the business environment for a moment.
Again, understanding that any asset can be turned into a NFT, how about a company's receivables? Often this is sold off in an effort to turn cash. Nevertheless, in DeFi another option will be to NFT the receivables and turn to the liquid market for instant cash. There is no need to discount although the market will want some type of profit making opportunity. Of course, that will be determined by the market, so a company could end up benefitting even more by turning in this direction.
Another key point with NFTs is they are ongoing. This enters the picture for movies.
One of the biggest challenges for actors, writers, and other personnel is getting paid royalties. When people make an appearance, they are often paid each time that scene is used elsewhere. NFTs could ensure that each person received the appropriate part of the royalty owed.
This also equally applies to music since there is often the same contract structure.
Here is where we will see the real explosion. While the collectible market is huge, the real money is found in the business applications. As mentioned with receivables, companies face major challenges with financing which could be solved with NFTs and tokenization.
Of course, the really large application is when we start to enter the virtual world. Being able to take real world items into there will be crucial.
For example, what if we were able to use a limited edition release of a certain pair of Nike sneakers in the Metaverse? As we create the different worlds that we are going to engage in, we will see the opportunities for developers to build in ideas such as this right into the ecosystem.
Being able to utilize our assets as we move from world-to-world is crucial. Presently, this is something that most are not thinking about but it will be on the minds of most people by the end of this decade. As we move deeper into a world where the virtual and the real merge, NFTs can be a strong part of the transition between the two.
After all, you cannot take your physical sneakers into your virtual domain.
Ownership is a crucial element that is often missing in our world. Our present financial system does not value certain things. With the transition to digital, most anything can be tokenized. This opens up the potential for people to own all they create.
This is vital in helping to alleviate things such as income and wealth inequality. All over the world, people have assets they own or created for which they do not receive compensation for. Either they are stolen from them or people use without paying.
NFTs can reverse this trend. As we see the innovation taking place, people all over the world will start to come up with ways to create NFTs that apply to their lives. Depending upon the individual, what they are involved in, or the community they belong to, this could be a great way for them to monetize the value they have in something.
Ultimately, it takes branding to a completely different level.
Thus, it is safe to say that NFTs are in our future.
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