Will NFTs move beyond art, music and collectables in 2023

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Will NFTs move beyond art, music and digital collectables and make a mark in core business verticals and segments in 2023 and ahead?

NFTs have become a buzzword in the field of art and music, fashion, sports and events in recent years. Today, popular artists, actors and filmmakers, fashionistas, sports persons and influencers are leveraging NFTs (non-fungible tokens) to offer digital collectables of their artworks to their fans and followers. NFT leverages core blockchain technology to create digital collectables and plays a key role in the distribution and transfer of ownership rights.

Enterprises, CIOs and NFTs

Despite, NFT having blockchain technology at its core, this new-age technology hasn’t made inroads into the enterprise world. Enterprises and their CIOs are rarely heard talking about NFT compared to other new technologies. Perhaps that gives some sense of not so promising state of NFTs in the context of enterprise technology.

And that raises some questions about NFT and what it brings to the table for enterprises and CIOs to make part of their new technology or IT roadmap in 2023 and beyond.

Will NFTs move beyond art, music and digital collectables and make a big mark on core business verticals and segments like BFSI and manufacturing and others? Will the enterprise see more applications and usage of NFTs in the coming years?

While these are some of the pertaining questions on NFT, which the tech industry needs to find answers to. At least in the current scenario delving through use cases of NFTs in the art and music field, it does suggest why NFTs are more suitable to non-core segments so far.

Non-Core Industries

“I think that non-core industries are a natural starting point for NFTs because they are run by creatives who have traditionally sought innovative revenue streams for their work,” says James Shannon, CEO and Co-Founder of XONE – a mobile augmented reality (AR) social network company based in London, UK.

“For example an independent musician or 3D artist typically earns very little on their work if they do not have massive followings. NFTs have found a foothold within these industries because they help creatives earn,” adds Shannon.

Core Industries

Applications of NFT into core industries will take more time as the ethos of the technology being decentralised tends to clash with the ethos of a big company, according to Shannon.

“For use cases here we’d need to look at what the core blockchain technology can bring to the table, example smart contracts. In the world of manufacturing smart contracts can bring efficiency by way of automating processes and flows of digital information without human intervention. This is similar in the world of BFSI,” explains Shannon.

It’s interesting though, despite blockchain technology at the core of NFT, it hasn’t made many headways into applications for core industries.

Consumer Technology

With most of the use cases coming from art, music and entertainment and online gaming space, many tech industry experts believe NFT is more consumer or end-user-centric, particularly with huge popularity among the young generation as per estimates. And that has helped it create a niche in the consumer technology space rather than enterprise technology.

According to international polling and market research firm Institut Français d’Opinion Publique (IFOP) study, 23% of millennials in the US are NFT collectors and 49% of 18 to 24-year youths in France are open to the possibility of buying NFTs.

Singaporeans, Chinese and Venezuelans are respectively the populations the most involved in NFT trading, the revealed study.

Chainalysis 2021 NFT Market Report estimated the NFT market size worth $44 million. OpenSea is the largest NFT Marketplace in the world, as per the report.

Adoption of NFTs and Core Industries

“The adoption rate of NFTs in the art and music segment is higher but NFTs are going to be an integral part of Web 3.0. NFTs’ adoption will improve evenutally as we progress into some of other technologies for Web 3.0 and Metaverse,” says Rajashree Maheshwary, President of McLaren Strategic Solutions.

The lack of NFT applications in core industries in Shannon’s view depends on “adoption.”

“If enough people start using NFTs and seeing their benefits then core industries will be forced to adopt them in meaningful ways. At the moment, it’s just about trust. New technologies take time before people trust them,” says Shannon.

Citing the Internet’s example, Shannon argues that many had thought the internet would never be used for financial services and transactions. “Because people would never bank without speaking to a live representative. And, today 99% of financial transactions and data is done online,” he states.

Benefits, Trust and Infancy Stage

Certainly, applications and adoption of NFTs in core business verticals and segments depend on the benefits it offers along with people’s trust in this new form of technology. But another key aspect that will help to drive NFTs’ usage in future is research and awareness. “Yes absolutely,” agrees Shannon.

“We’re in the earliest of early days for this tech. What will happen first is that each individual industry will have a small sub set of innovative leaders who will choose to adopt blockchain technology for a use case within their business. Not all will be successful but this is how change happens,” Shannon explains how NFTs as a new technology could move ahead in the coming years ahead.

Being in the infancy stage, NFT still has some years ahead before it could make a substantial impact on enterprises. “It is a long way to go for NFTs,” says Maheshwary.

NFT, Web 3.0 and Metaverse Technologies

“If ask how long will it take for NFTs to be develop into the enterprise level use case technology than it also needs the development of other such as Web 3.0 and Metaverse technologies and they are atleast 7 to 8 years out right now,” Mahaeshwary explains why NFT still has a long distance to cover.

“The way these technologies are being build, in the next 7 to 8 years, they will come to a level of sophistication, where it will be able to create an ecosystem having use cases that we can’t even imagine today and enterprises will take a note it,” she opines.

However, Maheshwary concludes that not just NFT but Web 3.0, Metaverse and Blockchain and other new technologies need a far better understanding and awareness to develop into meaningful use cases with benefits for enterprises to adopt.

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