Blockchain and NFTs

Blockchain and NFTs: How to Apply Them in Business?

It is increasingly common to hear the term NFT, but what does it mean? Non-Fungible Token or NFT, as it is better known by its initials in English, stands for a non-fungible digital certificate of ownership stored and managed using Blockchain technology. NFTs are characterized by being unique, indivisible, transferable, and capable of proving their authenticity and, consequently, their scarcity.

The logic behind NFTs is similar to that of a credit card; it doesn't represent tangible money, but it represents it, allowing access to goods and services. Similarly, an NFT operates as a unique and distinguishable container of digital assets, whatever they might be: art, loyalty points, a real world asset, a contract, you name. NFTs are different from crypto currencies in that the latter are fungible, which means one token or representation can be exchanged for another of the same value. NFTs are containers of value that’s different from other NFTs.

How are NFTs Linked to Blockchain?

While digital assets like artworks are well-known, NFTs can be applied to songs, short films, memberships, vehicles, and more, thanks to blockchain technology. 

Previously, when an artist sold their work, they couldn't profit from it again unless it was resold to a third party. NFTs con either eliminate or automatize the gallery's involvement, and the agreement between the artist and the buyer is made through a smart contract. In this contract, the artist or the gallery can, for example, specify a percentage they will receive when that work is resold to someone else.

This applies to whatever transaction one can imagine, which worries gatekeepers and regulators. Not only titles and or securities can benefit from such efficient, generic and secure container for assets but commissions and other rules can programmed into the token something unthinkable of just a couple years ago when dealing with whatever legal system

Advantages of Combining NFTs and Blockchain for Businesses

The reliability of owning a digital asset or service through an NFT is based on the transparency and security provided by blockchain technology. This is one of the major advantages for individuals or companies embracing NFTs.

Another advantage is the ability to purchase these digital assets using cryptocurrencies from anywhere in the world. This also eliminates the need for intermediaries or facilitates their involvement by lessening friction; transactions can occur directly between two parties.

It's essential to consider all the benefits provided by blockchain technology, such as being able to track the entire "history" of a purchase, including the initial price, the number of times it has been sold, and at what prices, among other details.

Applications of NFTs and Blockchain in Businesses

According to McKinsey, a global strategic management consulting firm, approximately $120 billion was invested in Metaverse and NFT-related companies in the first six months of 2022.

Companies can devise new strategies for selling their goods or services through NFTs, creating additional revenue streams. For instance, a gym could sell memberships with exclusive benefits. Instead of receiving a printed contract, buyers would receive an NFT—a digital image of a weight, anchored to a smart contract that describes the services the buyer gains access to. 

Other service tiers could be represented by different images, such as a bicycle or a ball.

Likewise, a sports team could sell annual memberships through NFTs, ensuring that fans who support their team through this purchase are guaranteed a place in the stadium with exclusive benefits, rewarding their loyalty.

Success Use cases 

Alfa Romeo

In the future, the car brand intends to deliver all official documents for their new vehicles in NFT format. This is possible through blockchain technology, which allows all relevant data about the car, such as the sales process, visits to mechanics, official checkups, institutional feedback, tax payments, and more, to be stored and accessible.

Cinema

Renowned film director Quentin Tarantino joined the NFT world with his iconic movie, Pulp Fiction. It is rumoured to include images of his handwritten script, digital scenes, and recordings of Tarantino's commentary on the film. According to businessinsider.es, Tarantino may have earned 1 billion euros from this venture, although he faces legal challenges from the film production company Miramax, which accuses him of breaching his contract.

Entertainment

YellowHeart operates in the music industry and began using NFTs to reduce ticket scalping. Concert tickets function as digital contracts, with YellowHeart setting a fixed price and a maximum resale price. According to Katz, CEO of YellowHeart, "By creating NFTs and putting them on the blockchain, we have eliminated counterfeiting, fraud, and, most importantly, intermediaries." This was reported on businessinsider.es.

Blockchain technology is no longer a concept of the future; it is here, and it is used to secure transactions. It can be applied across various fields, and the benefits it brings are substantial. Having trust in a smart contract, its execution, and its validity is vital for your company's development. That's why you should turn to Suscribo; we have what you need to make your contracts truly intelligent.