Impact of non-fungible tokens on traditional businesses

NFT token sample

The impact of Non-Fungible Tokens (NFTs) on traditional businesses is quantifiable in several distinct operational, transactional, and economic variables within multiple industry sectors. NFTs, characterized by their indivisibility and uniqueness, are registered on a blockchain.

Impact across industries

Art and collectibles

VeKings art

NFTs facilitate the buying, selling, and ownership of digital art on blockchain platforms, enabling artists to monetize their digital creations without physical reproduction. NFTs have enabled a notable shift in the economic dynamics of digital art transactions, allowing artists to receive compensation that potentially reflects the market value of their work more accurately. ^[1]

NFTs are also utilized to denote ownership of physical art, enabling digitization of ownership and transaction logs. ^{[2] [3]}

Music industry

Utilizing smart contracts, NFTs can automate the distribution of royalties upon secondary sales, ensuring artists obtain a predetermined percentage. ^[4] The embedded smart contracts within NFTs enable transparent and pre-agreed upon royalty distributions, reducing potential disputes and ensuring that original creators are compensated for subsequent sales. ^[5] This transparency and assurance of financial compensation upon resale is a novel development in compensatory mechanisms within the music industry. ^[6]

Gaming

Game developers leverage NFT sales as a financing mechanism, providing early backers with unique, often utility-based, digital assets. ^[7]

References

1. Hasan, Haya R.; Madine, Mohammad; Yaqoob, Ibrar; Salah, Khaled; Jayaraman, Raja; Boscovic, Dragan (2023-09-01). "Using NFTs for ownership management of digital twins and for proof of delivery of their physical assets" . Future Generation Computer Systems. 146: 1–17. doi:10.1016/j.future.2023.03.047. ISSN   0167-739X.
2. "Physical NFT". magazine.urth.co. Retrieved 2023-10-05.
3. "Mphasis | Exploring the Intersection of Physical Art and NFTs". www.mphasis.com. Retrieved 2023-10-05.
4. Rauman, Bradley (2021-04-01). "The Budding Disruption of Blockchain Technology Upon the Current Structure of the Music Industry". Senior Theses: 1–40.
5. Folgieri, Raffaella; Arnold, Paul; Buda, Alessandro Giuseppe (2022-07-01). "NFTs In Music Industry: Potentiality and Challenge". BCS Learning & Development: 63–64. doi: 10.14236/ewic/EVA2022.14 . hdl: 2434/1016808 .{{cite journal}}: Cite journal requires |journal= (help)
6. Verma, Manish (2022). "Integration of Blockchain in Music Industry". International Journal of Trend in Scientific Research and Development. 6 (3) – via ijtsrd.com.
7. David J. Kappos, Partner and Co-Chair of the IP Practice at Cravath; D. Scott Bennett, Partner at Cravath; Michael E. Mariani, Partner at Cravath; Sasha Rosenthal-Larrea, Partner at Cravath; Daniel M. Barabander, Associate at Cravath; Callum A. F. Sproule, Associate at Cravath (2023-01-10). "NFTs, Incentives and Control: Technical Mechanisms and Intellectual Property Rights". Stanford Journal of Blockchain Law & Policy.