Non-Fungible Tokens (NFTs) have been a popular and controversial topic of conversation since late 2017, especially with the general public who only see the headline-grabbing stories of NFT artworks being sold for tens of millions of dollars. In reality though, the potential of NFTs extend far beyond the art and gaming worlds they’ve risen to fame through and could hold solutions for multiple global industries.
Without going into the history of NFTs, a non-fungible token is essentially a representation of a unique object or entity, whether physical or digital. Due to the uniqueness of the tokens, NFTs are able to be ascribed to specific things, and thus enable them to be owned, traded or tracked. This is where the real application of the technology comes in as many industries are built on the foundations of proving ownership, enabling trade and tracing the movement of entities.
The most common current uses for NFTs have been seen in gaming and in art, with tokens used to represent unique, collectible and tradable cosmetics and items in online games and to show ownership and enable the trade of (usually) digital art. In this, NFTs provide a superior platform to enable what has previously been reliant on physical documentation. By employing a blockchain-based system, the issuers and owners of such NFTs can:
The potential of NFTs in the supply chain industry - specifically food - was the focus of a recent article from Forbes, with findings that included the use of NFTs and smart contracts would enable better timeframes for perishables and that auditing would be improved. Being able to track and manage food shipments with a greater degree of constancy and accuracy would also allow the better management of shipments to where they’re needed, helping reduce waste and avoid shortages. Whilst perishable food is an excellent example of where NFTs and blockchain can solve real-world issues, the benefits of both extend to every form of the supply chain; from being able to track cargo and its status (such as temperature or transit time or vibrations for any goods that require such monitoring) to proving the provenance of goods, there are huge ramifications to the industry. Possibilities such as proof of provenance also extend to areas such as charitable donations and organizations, who would be able to show that money they collected went to the people they claimed to help.
Linked to the supply chain, from quite early on in the conversation shipping was an area of interest for blockchain-based solutions. Some of the most significant names investigating the options included IBM and Maersk and, although the platform they developed was ultimately discontinued, the companies acknowledged that it was a viable solution but that collaboration with the wider industry was currently an issue. NFTs have a potential role to play in shipping, with their ability to provide differentiation between cargo and even cargo contents. Additionally, research has explored the extent to which NFTs can help prevent fraud in the shipping industry and articles have examined how they can not only protect against fraud but also theft. Once blockchain adoption has expanded to a suitable extent it’s likely that we see solutions such as IMB and Maersk’s TradeLens returning with NFT functionality part of the core function of the platform.
Beyond supply chains, IBM has also ventured into the area of patents in a partnership with IPwe in which patents would be stored as NFTs on a blockchain system - showcasing a great use for the uniqueness of non-fungibles in enabling an improved means of anyone to monetize their intellectual property by trading patents in a way and on a scale that hasn’t been possible before.
Another area in which NFTs can have a similar transformative effect is in the real estate industry. Anyone who’s bought property will know how much of a hassle it can be. By making use of the unique nature of NFTs, as well as the reach and speed of blockchain-based technology, the real estate industry has the opportunity to significantly reduce a number of the pain points that customers experience along with many of the costs that estate agents experience. Reducing waste and inefficiencies in any industry can help all those involved to save time and money. This Medium post highlights many of the key aspects for NFT use in real estate applications and benefits such as fractional ownership and improving liquidity for the market.
An article on BuiltIn demonstrates numerous companies that are using NFTs to revolutionize the way we access and consume music. In an industry which is notoriously difficult for artists to make a living, the use of NFTs can open up revenue streams through which those who actually write and create music can enjoy better profits, removing middlemen and and expenses which would otherwise take a huge cut of their earnings (figures put musicians as only taking 10-12% of the revenue that the music industry generates). NFTs in music can generate engagement, improve licensing and rights, increase revenue for artists, bring transparency and fair treatment.
Healthcare is a great example of where new technology can help overhaul an industry. In fact, this is an area in which the Blockpass Identity Lab has previously published research. The potential of NFTs in this area could not only help people take back control of and even monetize their own data, but with patients in control of their data their ability to share it with healthcare professionals and specialists would be a vast improvement on the current inefficiencies of patient record sharing, on top of all the other benefits a blockchain-based solution can bring.
Regardless of the industry in question, there is likely a role for NFTs to play; however, without the ability to tie NFT ownership to an identity will limit the scope of their use. Similarly, without a way to verify the identity of the owner, use of NFTs are unlikely to be accepted in regulated industries or by governments (particularly where sensitive data is being used such as in healthcare) which again limits their ability to revolutionize the industries they can. Blockpass is here to help anyone achieve compliance through the provision of verification services that put the focus on ease of use, security, privacy and efficiency. Whilst Blockpass can provide verification services for any industry, we have created KYC and AML solutions that are perfect for use with NFTs. Only when people can legally prove their legitimate ownership of NFTs and their compliance with regulatory standards will the true value of NFTs be realized across all industries.
The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Take a look at Blockpass' groundbreaking crypto compliance solutions:
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By Matthew Warner