A guide to Non-Fungible Tokens (NFTs), 2023 - Flipbook - Page 10
However, as the technology and market develops, NFTs are increasingly being
used to represent a wider range of assets. Indeed, the utility of this technology
has already been recognised by regulatory bodies, leading to their categorisation
as “utility tokens”.
Some more unusual use cases, where NFTs are already being used or have
potential for use, include:
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Finance. The rise in popularity of NFTs has coincided with the rise of
decentralised finance (DeFi), where finance instruments and transactions are
carried out via the blockchain. The autonomous process of the blockchain in
combination with NFTs has clear potential for use in financial transactions.
A key example would be in secured lending, where NFTs (by way of the
underlying assets that they represent) could be used as security for a loan.
There are already online peer-to-peer lending sites offering this service.
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Identity verification. The indisputable nature of NFTs and their potential
to act as certification could assist in numerous identity verification
contexts. Some proposed examples include use of NFTs in relation
to passports or identity cards and healthcare records, but this could
be expanded to any situation in which some kind of certification or
proof of identity is required. This would allow personal information to
be kept in a secure way, without the need for government or authority
input. An additional factor that could make NFTs useful in this kind
of setting is that individuals could track their personal information on
the “ledger” of the blockchain, allowing them to review access to this.
•
Access and events. Another key use case relying on the verifiable nature
of NFTs is within the events industry, in relation to ticketing and passes
for both real world events and, more recently, to events and private spaces
within virtual worlds, known as the “metaverse”. Using NFTs in this way
gives added security and trust to both consumers and vendors. NFTs also
offer capacity for ongoing royalties to be paid to event or private space
hosts.
