In the crypto community and beyond, there is still a widespread belief that non-fungible tokens (NFTs)*, like the cryptocurrency market as a whole, represent a temporary speculative bubble that will sooner or later disappear. Skeptics view NFTs as a useless phenomenon with no real value.
* NFT (non-fungible token) is a unique digital token on a blockchain that confirms ownership rights or the authenticity of a specific digital or physical object. Unlike fungible tokens (such as cryptocurrencies), each NFT has individual characteristics, cannot be replaced with an identical token, and is used to represent rights to digital art, content, in-game items, documents, and other assets.
Initially, NFTs did indeed gain popularity as a digital art format—in the form of virtual images and collectible items. However, when the NFT technology is considered outside the investment and speculative context, it becomes clear that it has much broader potential and is capable of transforming a wide range of industries.
Copyright and intellectual property
NFTs are well-suited for managing intellectual property rights, as they significantly simplify the process of confirming ownership. Control over the private key of a crypto wallet serves as proof of ownership, while the blockchain allows transparent tracking of an asset’s origin and verification of its authenticity.
In addition, blockchain technology enables the creation of transparent, automated systems for distributing royalties to rights holders. Smart contracts can predefine payment terms and automatically direct revenues to authors, performers, or other rights owners each time content is used or resold. This reduces the role of intermediaries, minimizes disputes over rights, and ensures fair and timely compensation for all participants, while also opening up new opportunities for honest and transparent content monetization.
NFTs are also used as an investment tool, allowing fans to participate in the income of their idols. This approach is applied in music, the film industry, fine arts, and other creative fields.
For example, platforms such as Royal and Opulous enable musicians to sell shares in their compositions via NFTs. According to Midia Research, in 2023, about 12% of independent artists were already using NFTs for monetization, and the market volume of music NFTs grew by 210% over the year, reaching $520 million.
NFT-backed lending
NFTs are full-fledged digital assets and can therefore be used as collateral when obtaining loans. Moreover, they enable the tokenization of almost any collateral asset—from real estate to accounts receivable.
Notably, the primary demand for NFT-backed lending comes from institutional investors. According to the analytics company Messari, they account for about 78% of all loans issued against NFT collateral.
One example of practical application is the Centrifuge platform, which allows tokenized* invoices to be used as collateral. In addition, services such as NFTfi, Arcade, and BendDAO provide NFT owners with the opportunity to borrow stablecoins without having to sell valuable assets.
* Tokenized assets are tangible or financial assets (real estate, commodities, debt obligations, stocks, bonds) represented digitally on a blockchain using tokens. Tokenization enables the assignment of ownership rights, simplifies asset transfers and accounting, and allows their use in decentralized financial services.
Digital identification
NFTs can serve as digital identity credentials and be used in document management on par with electronic passports.
Don Tapscott proposed the concept of using NFTs for identification in the book “Blockchain Revolution.” He suggested that NFTs could replace traditional PDF documents: for example, a university diploma could be represented as a token that cannot be forged and can be easily verified via the blockchain.
Such solutions are already being tested in projects like Polygon ID and Microsoft ION, where NFTs are used to store diplomas, licenses, and medical data. In Estonia, since 2022, about 15% of government services have been provided using NFT identifiers.
Gartner analysts predict that by the end of 2025, 44% of companies will begin using NFTs for digital signatures and document authenticity verification.
NFT tickets and loyalty programs
NFT tickets eliminate intermediaries, reduce commissions, and protect users from counterfeits. According to the Event Manager, in 2023, 19% of festivals in Europe were already testing ticket sales in NFT format.
Over time, such tickets may acquire collectible value. Unlike paper tickets, NFT tickets are stored on the blockchain indefinitely, and their transfer and resale are as simple as purchasing a product in an online store.
Another promising direction is loyalty programs. Traditional bonus points are usually limited to the ecosystem of a single company. Using NFTs instead of points makes them universal digital assets that can be exchanged, transferred, or used across different services, thereby expanding brand audiences.
Shared ownership of assets
Collecting rare items can generate significant income, but the high cost of works of art and antiques makes such investments inaccessible to most people.
NFTs solve this problem through the mechanism of fractional ownership. An exclusive asset can be split into multiple NFTs, each granting the right to a specific share of the artwork. This approach applies not only to works of art but also to other types of high-value assets, including luxury real estate.
For example, the RealT platform tokenizes residential real estate in the United States, allowing investors to acquire shares in properties, receive rental income, and freely sell their assets on the secondary market regardless of geographic location.