As the market for cryptoassets continues to slide into another “crypto winter,” investors and policymakers might be tempted to pay more attention to the falling prices than to other things. It would be tempting, but it would hurt the investors that regulators are trying so hard to protect. Volatility is a part of all asset classes. Since cryptoassets are still a new type of asset and technology, recent downturns should not be the main topic of conversation among investors.
Still, it’s important to acknowledge that, out of all the cryptoassets on the market, non-fungible tokens (NFTs) may be the ones that have caused the most talk and debate. The allure of NFTs has made it hard for investors to ignore them, especially since they are popular and have been pushed by entertainers and other influential people who aren’t usually known for giving good financial advice. As of this writing, nearly $40 billion has been put into NFTs in 2022. However, the prices of cryptoassets as a whole are falling, so a large portion of these investments are likely underwater, if not nearly worthless.
Such shocking news stories and damage, on the other hand, take away from the very real and useful things that NFTs can and will do in the future.
The idea of self-sovereign identity and self-custody of information, which came to the forefront of blockchain conversations during the last crypto winter of 2018-2019, has only gotten more important over the last few years. By any measure, the value of the data created by institutions is a big part of the overall value of the company. This shift has been driving the S&P 500 for decades now. Only recently have policy and market discussions focused on how important personal information is and who should have control over that information.
Technology companies use personal information to make billions of dollars in profits, but they don’t take very good care of that information. At the same time, governments all over the world are looking at digital currencies and identities as a way to make policy, so the trend is clear. Controlling data is a big part of controlling identity. Blockchain is a great tool to help with this shift. A transaction log that can’t be changed or deleted, can be seen by any member at any time, and can be used by anyone with an internet connection is a very powerful tool.
NFTs are at the heart of the idea because they are a way to connect the physical and digital worlds and find out who owns something and where it came from. Identity isn’t just about one thing, so it makes sense that at least some of its future will be based on blockchain.
Buying and selling real estate has never been portrayed as a particularly easy or fun process. Buying or selling commercial or residential real estate takes a lot of time and involves a lot of checks and reviews. Each touch point adds to the cost of the transaction. Already, applications and programs based on the blockchain are being used to try to speed up at least some of these transactions, and the results are looking good. Going back to the idea of NFTs, it seems that real estate transactions and records are another area where the unique nature of these instruments can be used to good effect.
Because NFTs are unique and different from other assets and also have the same transparent, traceable, and easy-to-use qualities as other blockchain-based transactions, they offer a solution to problems with real estate title and insurance that is almost tailor-made. Creating a record of ownership and origin that can’t be changed is a real-world use of NFTs that can save money and help millions of market participants.
Health care records
Healthcare is always a tough topic to talk about, but in the U.S. it is especially important for private organizations to be able to share high-quality data that can also be done in a safe way. Over the next few years, people will argue about vaccine records, vaccine passports, and what these things mean. However, this misses the bigger point. Demographics can’t be ignored, and as the world’s population continues to age and need more medical care for longer periods of time, it will become more important to have secure, shareable records that can be linked to a specific person.
There are already blockchain applications in healthcare, so this is not a completely new idea. However, adding NFTs to existing blockchain tools is a good step forward. Since every person is different and every NFT is different, it makes sense to connect these two pieces of data and link them back to the evolving conversation about self-sovereign identity. Once again, this is a unique situation in which blockchain and applications built on blockchain can help both organizations and individuals in a real way.
Cryptoassets have entered a new crypto winter, which means that some newer investors will lose a lot of money. This can’t be ignored. But, and this is what usually happens after drawdowns and price drops, this is also a chance for real-world and tangible use cases to come to the fore. Some people might see NFTs as the perfect example of speculation, which is true in some cases. However, NFTs are also an innovative way to use blockchain in industries that already exist. Realizing that NFTs are more than just crypto art is the first step toward real investment, development, and use.