NFTs have been around for a while now and we believe on one side the hype is still real, but so is the confusion and the reluctance on the other. This article explains what NFTs are and what you can and will be able to do with them in the future.
What is an NFT?
An NFT or otherwise known as a non-fungible token is a type of digital asset that has its own unique features, information, and attributes, meaning that it cannot be just simply interchanged with other assets. Let’s say I have a hundred physical USD bills in my hands. I can go to a gas station and ask the cashier to give me five twenty dollar bills in exchange for my hundred dollars. This is fungibility, the US dollar is an interchangeable asset. There is no unique value, just a general consensus that a hundred-dollar bill is worth a hundred dollars and can be divided up into other dollar bills in several combinations. NFTs on the other hand are non-fungible and can represent unique values in the form of utilities like membership, proof of ownership, etc. If you are interested in this concept I would like to recommend my article specifically dedicated to tokens, where I take a deeper dive into the world of tokenomics with two of my colleagues from Linum Labs.
How can I learn more about NFTs?
Now you understand the concept. You have probably already come across some NFTs here and there on social media. Maybe you have already downloaded OpenSea and scrolled around a little. What is the next step? Personally, I would highly recommend every single one of you to try to create your own NFT before buying your first one at any marketplace. Why? Simply to understand how the process works, and to see what it takes for a digital picture to become a digital token. The best way to learn it is to do it. There are as many ways to go about creating one or an entire collection as making physical artwork. To share a personal story, the way I did it was through drawing an image of a neon-noir-style elephant, scanning it, and then uploading it to OpenSea. I chose to mint on the Polygon blockchain as I didn’t want to pay gas fees. Now you can decide to mint on Ethereum and pay for it, but then you can also set a price for your NFT and let it go on the market on its merry way. All you need is a crypto wallet and a marketplace you can connect it with. For starters, a good MetaMask x OpenSea combination has never let anybody down.
I can just take a screenshot and I have the NFT, why would I ever pay for it?
Let’s say you go to the Louvre in Paris and you take a picture of the Mona Lisa. You have a digital record of it, but you will not own the Mona Lisa. One can think of certain NFTs as art, only in a digital form. In the real world, we know that Leonardo da Vinci painted the Mona Lisa because we have professional authentication processes developed to prove the genuineness of artworks based on physical traits and historical records. In the case of NFTs, their non-fungible trait is exactly what protects their ownership in the digital world, and their unique features secure their values on digital marketplaces. But most importantly, because they store unique information, there is proof of authenticity as well. This sets them apart from regular digital art. Imagine yourself in the situation of an artist who uploads their art to the internet. Now your work can be protected online, because there is proof of ownership and genuineness.
The utility of NFTs in the art world is a great starting point for understanding the technology, BUT there is more to the story than just that. If you take a screenshot of an NFT, you’ll get a JPEG copy and you can look at it all day long, but that's it. Whereas if you actually own that same NFT, it can allow you to access discounts, co-ownership, membership, or any utility determined by the creator. Let’s see real-life examples of what I am talking about here.
Amazing use cases
“Ok. I get it, now I can create, own, buy and sell digital art more conveniently than ever before. It’s the natural evolution of digital culture and I can also get super rich if I know what I’m doing. Cool, but is there anything more to it?” The answer is a huge YES! I have brought you three NFT use cases that could be standardized and used by millions of people around the world in the future.
1. Tickets - all kinds you can imagine
Let’s just stay with the example of plane tickets. Blockchain Airways decides to stop using e-tickets and physical boarding passes. Instead, they ask customers to create an airline user profile. When a user creates a profile, Blockchain Airways mints a membership NFT for the user that contains all personal information of the user and their ticket purchases. Evidently, all of this is stored on-chain, so information is secure. Now the real owner of the ticket is not the airline, but the traveler. From a customer’s perspective, having an airline membership NFT can make the user experience smoother than ever! How? Buying new tickets, selling existing ones, changing flights, seats, meal preferences, etc. could be faster and easier thanks to smart contracts on the blockchain. When certain conditions are met, these algorithms execute changes automatically that would require customer support employees’ help otherwise. From the airlines’ side, this alone could reduce operating time and costs which could eventually allow them to bring down ticket prices as well! Win-win! Applying for your Blockchain Airways membership NFT could be the last time you have to fill out a form before buying your next plane ticket, and it could also be the last digital asset you’ll ever need as proof of a plane ticket purchase. The same concept could apply to any transportation type, sporting events, festivals, or any event that requires a ticket.
2. Medical IDs - the end of paper
Think about all the times you have ever been given a medical document in your life. Records of regular check-ups at your general practitioner, prescriptions, InBody evaluations from the gym, and health reports from your smart watch. Do you still have all of them? Are they safely stored? Imagine if you could own all of this information in one medical ID NFT.
Why would that be beneficial? Well, you would never lose an important diagnosis, and you would never have to carry around a large folder with all your papers ever again. You would also be able to keep all of your sensitive information private. Only those doctors could see your records, who you give permission to. You could also use this ID across the world, and jump from one healthcare system to another. This way when you end up in an unfortunate medical situation on your holiday in a foreign country, communication barriers and therefore misunderstandings could easily be eliminated and you could receive the correct treatment in time! This is information security and real-life practicality! How awesome is that?
3. Lifelong IDs and security in the Metaverse
We are in 2026, and a baby is born in Budapest, Hungary. Instead of having to apply for a birth certificate at the local government’s office, a unique NFT ID is assigned to the newborn at the hospital and the baby’s records are already on the blockchain. From then on, all official documents this human is ever going to receive throughout their life could easily be stored in that ID.
Let’s say we don’t want to depend on our electrical smart devices and therefore we connect our fingerprints to the NFT ID and use fingerprint reader machines that could access certain parts of the data stored behind the individual’s ID. This could easily sound like a dystopian movie where the entire population of the world is monitored like that, but see the thing is, that this is never going to be the case. All data is stored on blockchains, decentralized networks. And once again, nobody can access your information, unless you give permission. In the future maybe governments could say that for law enforcement you are obliged to provide your fingerprint which connects to your NFT ID, and through that, they may be able to access your driver’s license or residency permit. But only that. In this future, identity theft, fake licenses, and lost official documents would not be a thing.
Buckle your seatbelts for a second and let’s go one step further. What if I told you that you could connect your entire online presence to one single tokenized ID that is biometrically assigned to you. All of your social media profiles, emails, passwords, transactions, bookings, file uploads, everything you can possibly think of, all safely stored on a decentralized network, owned by nobody else, but YOU. This is a concept that leads into the world of web 4.0, an imaginary, but also possible stage of human evolution where the metaverse and the real world are so tightly connected to each other, that a technology as such is essential to have for humans to secure their identities. What do you think?
Problems and solutions
Let’s just descend from the heights of web 4.0 and take a look at the obstacles we have to face with the use cases of non-fungible tokens. The main problem to tackle is mass adoption. How is that going to unfold? How are we going to convince people that these new ideas are better than the already existing systems they are either trying to fit in next to or completely substitute for? Right now the average user doesn’t want to go through a multi-step process just to be able to get ahold of NFTs.
Frankly, the average user doesn’t know anything about the web 3.0 world. Even in the case of people involved in the space, the problem is that the incentive to get out is just far greater than the incentive to stay in. You buy one, wait for the price to go up and then you sell out. The way to get people interested and keep them holding on to this technology is to create NFTs that are intended to be actually used. This requires them to provide utilities and incentives. Culture and community in the web 3.0 space is of uttermost importance.
If a car manufacturer issues NFTs to all owners of their brand new electric model as proof of ownership, they are all going to be like meh, who cares? If this token enables the first thousand owners to charge their cars for free for a year, and get a lifetime warranty on the battery, maybe spice it up with an annual tailgate party where they get free merch, then we are talking! It is an experience now, the game is on to acquire the token! But the question is still there, why can’t they just issue a regular online membership? Why is a tokenized web 3.0 version better? It all comes down to the protection of your data. Remember, all of the information mentioned above is stored on-chain. People want privacy and convenience, and non-fungible tokens are here to provide just that. Alongside the strong community building capability of these tokens, they can protect the car owners' information. In order for the adaption to be successful, a token has to provide both reasonable utility and social experience.
Conclusion
When we are talking about NFTs or any other product of the web 3.0 world, we have to keep in mind that blockchain development is called an emerging technology for a reason. There is room for error, improvement, and ideas never imagined before. There are new projects constantly being built every day. It’s exciting, it’s scary and rightfully, controversies and very distinct opinions can also pop up here and there. On thing for sure, NFTs are here to stay with us in the future.
Linum Labs is at the forefront of building this technology. As established leaders in the space, we feel responsible for passing on knowledge we have acquired over the years. We have created Solidity Fridays to channel our thoughts and experience, but most importantly to start a conversation with You. Feel free to contact us on our various platforms with your ideas and maybe the next article or podcast will be inspired by your recommendations!
