So, why do NFTs matter? 🤔

Hey fam!

In my last post, I covered what NFTs (non-fungible tokens) are, my personal experience with them, and how to buy them. After releasing the post, I had some follow-up conversations over this past week which made me realize that I didn’t clearly acknowledge how NFTs will impact society in the future. Honestly, this took some research on my end too because most of the current mainstream NFT craze is around digital art pieces and their community. While projects like this will certainly remain a part of the NFT landscape, I’ve learned that NFTs are way more than just digital art. Leveraging these tokens will provide an entire new way to prove ownership, membership, and identity in key parts of our lives. In this post, I want to break down four of the various use cases for NFTs and what the world in, say, 2050 might look like. Although it may be pretty hard to imagine how all of these use cases may come to fruition, having a general understanding will help each of us be prepared for these transitions. Let’s dive in!

4 emerging use cases for NFTs

Access to DAOs (Decentralized Autonomous Organizations)

This past Saturday, I caught up with my friend, Kasey. We were talking about NFT projects we’re invested in and they mentioned WoW Pixies. Purchasing an NFT from this collection grants you access to an organization that invests in other women-led NFT projects.

To explain what this means, let me break down the tweet. In the WoW Pixies collection, there are 5,600 NFTs. Each person who purchases an NFT from this collection, gets access to the DAO. Now you may be thinking, “what in the world is a DAO?!” Well, DAO stands for Decentralized Autonomous Organization—“an entity with no central leadership. Decisions get made from the bottom-up, governed by a community organized around a specific set of rules enforced on a blockchain. DAOs are internet-based organizations, collectively owned and managed by their members.” This basically means that the NFT you purchase from this collection gives you the ability to play an active, equal role in deciding which NFT projects the organization will invest in. The power of the DAO, in this case, is that you can use profits from the collection’s sales to invest in “blue chip” (high value & normally expensive) NFT projects, such as World of Women. This allows you to be invested in NFT projects that you otherwise may not be able to afford. As the value of the investments goes up, so does the value of the WoW Pixies NFTs. Profits from these investments also have the potential to be re-invested to NFT holders/DAO members. As I mentioned in my first newsletter, this is a win-win situation for everybody who holds an NFT from this collection!

Read WoW Pixies’ white paper to get more information here. 

Ownership in the Music Industry

If there’s one industry that has the potential to experience a huge shift because of the NFT landscape, it’s the music industry. I’m sure we all know how exploitative the music industry can be for artists. They literally get a fraction of a penny per stream causing most rising artists to rely on outside sources, such as concerts, to fund their dreams. The streaming services and record labels have become a necessary evil, but NFTs will likely be the big break needed for artists to finally reap the financial benefits of their work. Check out this very accurate (and funny) tweet from Sound—a platform developing tools for artists to create in Web3.

Curious how this may work for artists? Honestly, everything always comes back to the power of decentralization in Web3! According to the Motley Fool, “Selling music and related artwork via the blockchain is a way for an artist to forge a direct relationship with a fan base without the need for a record label or music-streaming service. If done right, it can equate to a bigger profit for the creator since there's one less hand in the cookie jar.” Imagine if you discovered Beyonce back when Destiny’s Child was first starting out and you believed so much in her ability to become a worldwide superstar that you purchased the rights to one of her songs in the form of an NFT. Because you invested in her music by purchasing an NFT, you’re also more likely to be an active and vocal supporter of her which leads to organic marketing for her. As Beyonce rises to stardom, so does the value of your NFT (for clarification—even though you own the rights to her music, other people will still be able to listen and support). The other thing to note is that artists can set royalties to their NFTs. So even though they’ve sold the rights to you as the NFT holder, any time you sell the NFT to someone else, the original artist will get 10% of that sale. They don’t have to make any outside payments to labels and get to keep all of these profits for themselves. Again, everybody wins!

Real Estate

Now this one was a little trippy to me when I first read about it, but as I looked more into it I realized how much NFTs make sense in real estate. NFTs could be used to show proof of ownership (verified on the blockchain), transfer land deeds, and show changes in property value over time using time-stamped NFTs. You’ll be able to know all of the details of a property such as when it was built, the history of owners, what renovations were done to it, and everything else done to the house up until the point of you purchasing it. Real estate NFTs will also help simplify and speed up transactions and allow for automatic payments through smart contracts.

The caption of the Instagram post above says:

“A home in Florida could be the first house sold as an NFT. The four-bedroom Tampa Bay house will be put on the market by a local realtor as an NFT on Tuesday.

It will have its property rights minted as a digital token and sold for a minimum bid of $650,000.

"It's an exciting venture into what possibly could be the future of real estate," said Amy Heckler, the President of Heckler Realty Group.

She said she transformed the home's certificate of authenticity into an NFT, which she achieved by turning the ownership into a limited liability corporation. Doing so would, according to Alessandra, simplify the property sale process so that someone could theoretically sell a house with just a Venmo transaction.”

Soooo cool!

Events and Ticketing

I absolutely love this example I found on Coindesk.com using a Drake concert to show how tickets for events can serve as NFTs:

“Another hypothetical: Drake has an upcoming concert, and you want to go. Tickets are $100. Now imagine the ticket you buy is actually an NFT, and your NFT does the following six things:

1. It’s emblazoned with some artwork from a designer you like.

2. It serves as concert memorabilia. So it might even be worth something someday, like old ticket stubs to Beatles concerts.

3. Inside the venue, you can use the NFT as a means of getting snacks or beers.

4. Thanks once again to the magic of smart contracts, the revenue from your NFT automatically pays Drake 40%, the DJ 10%, the lighting crew 2%, the janitors 1%, and on and on. No middle-person is needed to orchestrate the payments, which means you pay almost nothing in fees.

5. If you bought the VIP ticket, the NFT unlocks your access to visit Drake backstage, or maybe it gives you exclusive access to future digital goodies.

6. Amazingly, the NFT gives you the right to be not just an event-goer, but even a shareholder in Drake’s concert. This NFT functions as concert equity, and you’ll get a small slice of the profits. If things break right? Maybe you’ll even make money by attending the show.”

As great as all of this sounds, I think it’ll take a while before we hit mainstream adoption. Plus, Drake liked Kanye’s dramatic (lol) post about NFTs so we definitely have a long way to go before some of our faves get on board, but that’s okay. Come back to this post in 20 years and I’m sure things will be very different… :)

These are just four examples of use cases. There are SO many others, from gaming to voting to fashion wearables in the Metaverse. One day we’ll look back at the beginning of the NFT era when we only bought NFT digital avatars to flex on Twitter lol. But until then, there are so many possibilities to explore! What possibilities do you see for NFTs? Let me know in the comments!

This week’s recommended action: Follow these NFT thought leaders on Twitter!

Below are some of my favorite accounts to follow about all things Web3 & NFTs! Check them out. Also, if you have any recommendations for me on people to follow, let me know 🙏🏽

@callmelatasha - a dope Black woman in the space who started @herstoryDAO to uplift marginalized crypto creators. She also has released several NFT music projects of her own work!

@web3brett - tweets about NFTs, specifically music NFTs, a lot. Really active on Twitter and constantly surfaces new opportunities!

@ImanEurope - another Black women who’s the Head of Artist Relations at Sound (the Web3 company for artists that I mentioned above) & a musical artist herself!

@awright01 - he tweets about DAOs and has really insightful threads about the future of them and where they’re headed.

@simonembanna - she recently launched her own NFT collection, Friendly Hotties, which serves as a community access token for Black women looking to learn more about Web3!

@gaby_goldberg - one of the first people I followed! She tweets about everything in Web3, from NFTs to DAOs. Would highly recommend her page!