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My understanding of NFT's is very basic - limited to a couple of short youtube explainers and a basic understanding of decentralised trust systems (e.g. blockchains).

I understand that someone with an NFT may sell it, thus producing a positive cash transfer.

I also understand that someone who owns an NFT may admire it, in the same way someone may admire art, software, a pet, a story, etc.

Question

Other than being sold or admired, can NFTs do anything else, practical or otherwise?

The little I know so far

I've heard that NFTs can be used as a sort of license over characters from stories or art works, but I do not know of any legal system would actually enforce such a licence, hence I'm not sure that aspect offers value?

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  • Yes, there are games that use NFTs for the characters, cards, properties, etc.
    – Ismael
    Dec 8, 2021 at 19:43

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Metaverse objects

I know a few projects including a couple we work on that build "Rich NFTs" or "Metaverse NFTs" where basically a 3D model is included allowing to use it in 3D spaces such as Decentraland, Spatial etc. Game items are being traded as blockchain tokens / NFTs for quite a while already (see DMarket and other similar platforms - they've been around for years).

Real Estate

There are projects that link NFTs to real-world property akin to security tokens. Here are couple of publications that talk about that but no specific details:

Of course if you include Digital / Metaverse land under Real Estate then you get more examples such as notorious Decentraland, Cryptovoxels, PolkaCity, Superworld, Upland, Area etc.

Collateral

NFTs can also be used as a collateral in DeFi transactions.

Certificates, Licenses and Tickets

Easier to combat counterfeit certifications and licenses if they are issued as NFTs so the issuer, the origin, total amount issued etc can be easily verified with a couple clicks on blockchain explorer. NFTs also start to be used as a medium for tickets to sports shows.

Origin tracking / digital copy

Take a photo of a particular organic tomato vine and include it as NFT along with the product itself. You may also transact this NFT between the wallets of supply chain members (farm -> warehouse -> distributor -> supermarket). Great way to track the provenance of an item in the supply chain.

Collectibles (digital and physical)

See the RWANFT (Real World Assets NFT) and Matterium protocol. They have come up with the concept combining Asset Passports, Automated Custodians and Smart Property Register. They claim to be a universal file format for "uploading physical goods to the Internet".

So far it seems they have succeeded on that with their Captain Kirk figures collection :)


Now, you're right selling and admiring are the main "applications" today but it's a smart contract supported by a distributed ledger and a lot can be done with it. We'll definitely see more applications going forward.

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