Are there meaningful use cases for NFTs?

  1. Up to now the NFT hype seems to be about arguably ugly pictures.
  2. Many of them obviously produced in a process that outputs lots and lots of them with little differences (rendering the scarcity reasoning somewhat void). Why should Brutally Ugly JPG #666 be worth hundreds of ADA just like #001 through #665?
  3. And it’s not even clear if you really purchase the copyright or rather just a hash of the picture (in addition to the questionable value of the copyright of an ugly picture). Or are there platforms in the Cardano universe with clear terms on that? Didn’t find anything like that on CNFT.
  4. And are there processes that guarantee that only the real creator can mint an NFT, processes to remove an NFT from the chain in case of copyright violations?
  5. And, even if they are legitimately from the original creator and there are terms granting the NFT owner rights that are more useful than some hash value on the chain: Only the first purchase leads to a profit for the creator. All further trading values the creativity of the creator by generating profits for some anonymous person having purchased the NFT cheaper from the creator. That’s … somehow odd.
    (Point 2 begins to make sense, here. An artist can show over the course of n NFTs that they rise spectacularly in value and then sell m more NFTs for higher prices. That’s maybe even somehow similar to the traditional art market, but still … strange and probably not something each and every artist will want to do.)

So, are there use cases for which these obstacles are irrelevant or solved?
Use cases not necessarily in “art”?

Good questions. There are many use cases for NFTs above and beyond art, but regarding the art NFT space beauty is in the eye of the beholder. I agree that many NFTs are pretty awful but some are not. Prices are probably in a bubble but some will stand the test of time. People pay a lot of money for all kinds of crazy things. There is a royalty structure that is being implemented. I’m not sure of the details. The artist can decide what it is at the time of minting. Some Cardano NFTs have on chain data. Unsigned algorithms, Cardano Trees, and Stellarhood NFTs are all examples of that.

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Hi HeptaSean,

I’ll be honest, I’m not a personal fan of the NFT-for-NFT-sake approach happening atm but can see a whole lot of potential… it seems to me that this is the start of a huge hype-building period where the exposure to NFT’s will expand massively before subsiding to more stable uses (I could be entirely wrong here though - looking at some of my colleagues splashing the sats as I type, I may be…) That being said, it is good to see the current levels of interest around a new tech available to so many people.
There’s a load of examples for use-cases (some sounder than others in my opinion) for example;

Collateral in De-Fi lending could be one. The ability to link value to a digital asset for the purpose of lending/borrowing has huge potential.

They will be huge in gaming, one of the globes largest value entertainment industries. Players could now have the ability to earn/buy and therefore own items in game and have actual custody of the item, transferring them between platforms etc. An idea of scope here; in 2020 EA had $5.5b revenue, $2.7 of this was from in-game content/live services… that’s just EA!

Supply-chains and logistic companies now have another tool re proof of ownership, this could allow for more efficient processes, reduced ability to counterfeit etc.

They could be a digital proof of real-life asset ownership. Land registry, Birth Certificates etc.

And now the peacocking… Imagine ‘Billy-Big-Bollo…’, he loves his Lambo. He’s knows that when he’s typing away on Twitter that he cannot show off his car as well as when he’s blapping it down the street, and, that even though he’s got pics of it up there are still people who think its just a lease, this doesn’t massage his ego in the way he bought the Lambo to do… What better way to show this off than linking your personalised Lambo badge NFT (one available per car, bought as an optional extra when Lambo was ordered) to your Twitter handle and making sure that everyone knows you are a true ‘BBB’.
Now, substitute ‘BBB’ for any other over-materialistic person and substitute ‘Lambo’ for any other desirable item/brand and you have an idea of where this could go…

This hasn’t really even touched on the Meta/Web3.0 yet…imagine ol’ BBB up there being able to drive the digital version of his Lambo around the MetaVerse because he has the digital-cert (NFT) that confirms ownership to him…

The truth is, there are a whole load of scenarios and industries where NFTs could be used for a real-life purpose but haven’t actually been created yet, they’re a great example of the tools that have been developed for the emerging technologies.
There are an almost endless amount of use-cases outside of the traditional ‘arts’ sector, it just depends on how its adopted.

Ultimately, I’m personally not buying into the hype as it stands but am very excited to see where it goes.

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Thank you both for all the nice examples!

For the NFTs lving completely on-chain (unsigned_algorithms, CardanoTrees, Stellar Hood), I can much better imagine that they have art-like value to (some) people.

The royalty proposal is interesting, although up to now not enforced by smart contracts, but rather voluntarily done by market places as far as I can see. Would be interesting if such a thing can be enforced by a contract? Or does that contradict too much that you have complete control over things in your wallet and therefore should be able to sell your NFTs privately without paying royalties?

For the non-art use cases, one can of course nitpick a lot:

If I’m a purely real-world BBB, I could buy a Lambo with an NFT and then sell the NFT again independently of the Lambo. Then, the connection is broken and a BBB with a Lambo NFT can again not prove that he has the real thing in the real world.

If the NFT is at the same time a proof of ownership, this problem might vanish. But for this, the proof has to be recognised by jurisdictions. And there has to be some type of control, so that not anybody can mint land or Lambo ownership or birth certificates.

This (and similarly also the gaming use case) always begs the question: If there has to be some authority to mint such things with off-chain connections to ensure that there really is the corresponding off-chain thing/fact/right, wouldn’t it be easier if this exact authority would implement a non-blockchain, traditional PKI system, market place, whatever?

I’d very much like to see both – examples in Cardano, Solana, any of the non-world-burning cryptos how exactly to pull off such a thing and examples from the (rather large) blockchain-critical tech crowd how to do it with traditional tools.