Non-Fungible Tokens (NFTs): Use Cases, Status, Scarcity

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This is the free version of Trends PRO #0050 โ€” Non-Fungible Tokens

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๐Ÿ” Problem

Traditional art is hard to secure, sell, authenticate, store, tokenize and collateralize.

In-game items have weak property rights.

Communities have weak alignment.

๐Ÿ’ก Solution

Non-Fungible Tokens represent one-of-a-kind items. 

  • Bitcoins are fungible. Tradable 1 for 1.
  • This CryptoKitty is non-fungible. Itโ€™s 1 of 1.

Physical, non-fungible assets include the Bubble Palace, this 1993 MVP Trophy and Michael Jordanโ€™s โ€œFlu Gameโ€ shoes. There are no equivalents.

Non-Fungible Tokens (NFTs) include:

NFTs are digitally scarce. They are easier to store, sell, authenticate, collateralize, tokenize, value and have stronger property rights than physical assets.

๐Ÿ Players

Use Cases

  • Art โ€” Prove ownership and authenticity
  • Voting โ€” โ€œBurnโ€ tokens to affect change
  • Games โ€” Buy, sell and trade in-game items

NFTs

Marketplaces

Artists

Games

NFT Projects

๐Ÿ”ฎ Predictions

  • Creators and communities will retroactively airdrop tokens. RAC used Zora to give early Twitch, Bandcamp and Patreon fans $RAC.
  • NFTs will become cash-flowing alternative assets. Guy J sold royalty rights to โ€œCotton Eyesโ€ for $26,000
  • Projects will piggyback on the success of others with interoperable NFTs. KittyRace and KittyHats build on CryptoKitties. These are two, of many, projects in the KittyVerse

โ˜๏ธ Opportunities

๐Ÿ”‘ Key Lessons

  • NFTs are easier to store, authenticate, collateralize, value, transfer, tokenize and secure than physical assets.
  • Belief drives the price of art and most currencies. Taxes, corporations and nations are also collective hallucinations.
  • Timing and access, not price, are the primary sorting functions of drops. Brands build hype and leave money on the table with artificial scarcity. This is a flippersโ€™ profit. 

๐Ÿ˜  Haters

โ€œNFTs have no utility.โ€
Owning art signals status. NFTs are a new, superior form factor that solves a very old problem. Some NFTs are used to vote and trade for physical goods.

โ€œI can just copy-paste an NFT.โ€
Yes. You can also download mona_lisa.jpg. But do you own it? NFTs sell for hundreds of thousands of dollars. This ship has sailed.

โ€œProof of listening, watching and attendance can be bought.โ€
Yes. And weโ€™ll know whether it was bought or earned.

๐Ÿ”— Links

  1. Who’s bought/sold NFTs? โ€ข The tweet behind this report. 
  2. A Beginnerโ€™s Guide to NFTs โ€ข NFT use cases from art to social tokens.
  3. Trends #0026 โ€” Drop Culture โ€ข Status and scarcity serve the same role in physical and digital drops. 


Thanks to John Crain (SuperRare), Chris Carella (Tezos), Linda Xie (Scalar Capital), Paul Martin (Integrity Music), Stuart Sim (FinLister), Abby Barsky (Cord), Aadil Razvi (Demand Curve), Bram Kanstein (No-Code MVP), Ime Essein (HBCUvc), Ethan Jones (Tools for MGMT), Ryan Deiss (Scalable.co), Marty Bell (Poolside.fm) and A.J. Lawrence (Beyond8Figures). We had a great time jamming on this report. 


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What youโ€™ll get:

  • 8 Use Cases (166% More)
  • 17 NFTs (240% More)
  • 18 Marketplaces (160% More)
  • 21 Artists (320% More)
  • 12 Games (300% More)
  • 20 NFT projects (566% More)
  • 5 Metaverses (๐Ÿ“ˆ Trends Pro Exclusive)
  • 7 Predictions (133% More)
  • 9 Opportunities (200% More)
  • 6 Key Lessons (100% More)
  • 10 Links (233% More)

With Trends Pro youโ€™ll learn:

  • (๐Ÿ“ˆ Pro) How are NFTs and DeFi related?
  • (๐Ÿ“ˆ Pro) Why are people buying art from algorithms?
  • (๐Ÿ“ˆ Pro) What are examples of member-owned communities?
  • (๐Ÿ“ˆ Pro) Why are legacy brands undervalued?
  • (๐Ÿ“ˆ Pro) What are redeemable tokens?
  • (๐Ÿ“ˆ Pro) Where are data-as-a-service opportunities?
  • (๐Ÿ“ˆ Pro) Who’s using NFTs to growth hack?
  • (๐Ÿ“ˆ Pro) What services are being built around NFTs?
  • (๐Ÿ“ˆ Pro) How can NFTs create more alignment?
  • (๐Ÿ“ˆ Pro) What’s the best use for NFTs in communities?
  • and a lot more…