Will NFTs Be as Versatile As Crypto?

NFT and cryptocurrency, two new digital assets, are disrupting many industries.

With the first showing signs of revolutionizing ownership and the other threatening to replace traditional currencies, we can’t help but wonder if NFTs will ever be as versatile as crypto.

We examine both sides and highlight some of the core applications that both cryptography and NFT have had so far. We compared the two technologies based on a variety of core criteria to predict which would have the most future applications. Our discovery was quite different from what we had imagined.

Discover more.

How Versatile Has Cryptocurrency Been?

Since their mainstreaming, cryptocurrency has been closely associated with finance. There have been many hints that fiat currencies may be replaced by cryptocurrencies.

Their evolution has led to notable ones such as bitcoin usable in many online nichesFrom gambling to cross-border payments and even everyday ecommerce payments. Here are a few examples of crypto-based payments.

Finance: Transactions – Purchases, Payments and Purchases

Crypto’s primary use case is finance. After all, it is a form of currency.

Bitcoin, the first crypto, was created in 2009 to provide a legitimate peer-to-peer electronic cash system that wouldn’t rely on banks due to prevent the reoccurrence of the Great Financial Crisis2008

The peer-to-peer system is faster and cheaper than other financial systems. It has been widely adopted for remittances, non-commercial money transfers and other financial transactions.

The development of Decentralized finance (DeFi).Platforms have also leveraged smart contract technology for lending purposes. DeFi exchanges accounted for 60% all crypto transactions in retail activities, including e-commerce.

Crypto has so far proven to be an asset that is versatile for modern finance. It can be used to buy many different types of goods and service.

You can also find out more about the Governance of

Cryptography has been used in the past to control and monitor the direction of organizations. We may see its use in government in the future.

Tokens are now available for many organizations to sell to their members. This allows them to create a virtual organization. The Decentralized Autonomous OrganizationA classic example is the venture fund launched through the initial coin offering in 2016.

Crypto facilitated a flat organizational structure in this venture, as token holders became stakeholders and voted on projects via the Ethereum blockchain’s smart contracts.

These applications suggest that crypto may be used in future election. Members or citizens would receive unique voting tokens and a publicly accessible voting system would tally the votes.

Utilities

Some cryptocurrencies have real-world applications. They are not considered to be financial instruments for trading. Individuals purchase them instead in exchange for other crypto-currencies like Bitcoin and Ethereum, to access certain services or products on a platform.

For instance, Ethereum’s gas token is used to pay gas fees on the Ethereum blockchain network. Ethereum also has the Ether cryptocurrency which allows those who stake their tokens to earn more ether.

Gaming

Cryptocurrency plays a major role in the gaming industry’s evolution. It brings the realities of real-world economy into gaming.

This application is an extension of crypto’s application as utilities because these games allow players to earn in-game crypto tokens for completing gaming tasks or outperforming other gamers. The in-game tokens can be traded for crypto or fiat currency by the players.

This application is made easier by the development of P2E gaming models (play to earn), as many people are now paid for being full-time players.

Crypto coins can also be used for online casino games in the same way that fiat currencies are. This new development allows gambling to be played in places that were previously restricted because crypto regulations are different than fiat.

Investments

As an extension to its primary use, crypto can also serve as an investment.

In recent times, traditional investment instruments like bonds and stocks have been replicated in the cryptocurrency industries as security tokens — sister forms of utility tokens, if you wish. Security tokens represent ownership stakes in a business. We saw a lot of these during the Initial coin offering boom in 2017.

Their application as investment forms is based on the possibility of increasing their value over time. As a common example, Bitcoin – even though it wasn’t intended to be a security token— has increased in value compared to when it was first launched. Investors have therefore acquired and preserved Bitcoin as an investment.

Many crypto enthusiasts also believe that it can be used to hedge against inflation. This further supports its investment applications.

How versatile can NFTs be?

NFTs can be used for more than digital art and memes. 

The following use cases demonstrate the huge potential of their non-fungibility.

Artwork

NFTs have had a significant impact on art. Yet, there are multiple possibilities. 

They connect budding and established artist to new and untapped markets. As a result, art doesn’t have to be exclusive to the crème de la crème in high-end museums because artists who know How to sell NFT artCan sell it across the border to the highest bidding.

Reputable institutions like the British Museum have embraced the idea of tokenizing their most precious works with the aid of blockchain technology. This step can have huge benefits for ensuring the authenticity and ownership of digital artworks.

Gaming

As with utility tokens, developers can create NFTs in-game that can be traded, bought, or sold for completing certain gaming tasks or outperforming other players.  They also provide better earning opportunities for players, as NFTs can appreciate based on increased demand and perceived value.

Blockchain technology’s smart contracts facilitate this value transfer and appreciation.

NFTs allow for true ownership of in game tokens. Gaming is touted as one of the fastest growing industries.What are the best ways to gain NFTs in 2020?. As a result, the lines between investment and gaming may blur in the future because NFT’s earning potential in gaming is attracting both traditional gamers and investors in the industry.

Collectibles & Memorabilia

Recently, NFTs has shown serious potential in the future of collecting unique digital objects. Digital art pieces are a common form of collectibles. However, they aren’t the only ones. Collectibles are anything that has sentimental value for an individual.

You may stumble upon a desirable collectible only once in your lifetime. With NFTs you can claim ownership of these unique items, ensuring future profits. Former US President Donald Trump’s income statement shows huge profits from his collection.

Real Estate

NFTs are also used to represent ownership of property. Property deeds are now tokenized into NFTs to make them easier to purchase on NFT markets.

If you cannot afford to buy the property outright, you can purchase fractions and share ownership with other shareholders. The costs of property sales will be reduced by eliminating intermediaries such as lawyers and realty agents. Smart contracts will be used for these purchases and ownership transfer.

NFT real property eliminates traditional property tax while retaining capital gains potential because real estate always appreciates.  It also solves the accessibility issue by allowing for cross-border trading.

A Side by Side Comparison of Crypto Versatility and NFT Versatility

The following areas are where crypto and NFTs can be widely applied.

Trading and Finance

Both NFTs as well as cryptocurrencies can both be traded. 

However, while trading NFTs involves exchanging the NFT for a set value of fiat or cryptocurrency, trading crypto deals with the coin’s underlying value. This difference comes from the uniqueness of each. NFTs have a non-fungible nature. This means that a unique entity can’t be exchanged for a different form. Cryptocurrencies, on the other hand are fungible. They can be exchanged for another entity with equal value.

This fact implies that crypto could have a wider financial application than NFTs. NFT sales and purchase are powered by cryptocurrencies.

Investments

Both crypto and NFTs offer huge investment potential.

Many investors in gaming finance NFT games because of the capital gains speculative that the P2E models offers. The same is true for cryptocurrencies as many platforms have introduced in-game securities tokens.

Crypto may be a better investment than NFTs because their value is dependent on market forces, technological advancements, and regulatory changes.

Crypto has become a standard financial tool in recent years. 

Purpose and functionality

Although closely related, NFTs and Cryptos have different purposes and functions. 

NFTs are widely used in many areas, including gaming, digital art and streaming services. However, the ability of NFTs to serve as authentication certificates, proving uniqueness, is what makes them so popular in these niches.

Cryptocurrencies serve as a digital currency that is used to facilitate trade and circumvent the problems of traditional currencies. Their ability to power transactions decentralized automatically puts them on the map, regardless of industry.

Conclusion

Crypto can be considered NFT’s older sibling, considering it was launched earlier. It is therefore not surprising that crypto has a wider variety of applications than NFTs. However, a deeper examination of their features reveals that time isn’t the only factor determining their versatility potential.

Crypto has branched out into governance and utilities but its primary application remains in finance. This is evident by the role it plays within these niches. NFTs began as a way to ensure digital ownership and authenticity in art and still pictures. The ability to ensure authenticity has led the technology into gaming, real estate, and music.

Both have a wide range of applications and pitting them together only shows how well they do what they are designed to do.

It might be wrong to ask if NFTs are as popular as cryptocurrencies. A better question is: “How versatile can NFTs be?” The answer to this question is: “Only time can tell.”