What is the first thing that comes to mind when you think of NFTs (Non-Fungible Tokens)?
A unique art collectible as an investment?
NFTs are cryptographically unique, but it doesn't stop at aesthetics.
They are more than just images on a blockchain network.
They offer us new opportunities to unlock privileges, rewards, or rights.
These unique tokens could open up a world of unseen access we wouldn't find anywhere else.
The value of an NFT utility token can transcend the mere boundaries of investment into the transformation of how we work, interact, and play.
They may still be in their infancy stage but what excites us is all the possibilities from this exciting technology - its real potential is yet to be discovered.
In this post, we’ll dive in to explore Utility NFTs.
How do Utility NFTs Work?
NFTs are revolutionizing digital ownership by harnessing the power of blockchain and smart contracts.
From tangible to intangible items, NFTs guarantee their holders exclusive rights over a verifiable asset and store each transaction in an unchangeable public ledger – while safeguarding them with cryptographically-secure encryption protocols.
Most utility NFTs operate using Ethereum's renowned network structure to access smart contracts. The structure of utility NFTs is similar to normal NFTs. They also use cryptographic encryption to ensure the best safety and immutability of transactions.
NFT minting is a process involving the execution of code in a smart contract according to several standards, such as ERC-721. This creates new blocks, verifies data, and stores this information on an immutable blockchain ledger.
With the smart contract feature, creators can set pre-determined conditions on a transaction – allowing them to impose their right to royalties each time someone purchases it.
From a tech perspective, utility NFTs work the same way as other NFTs. They are cryptographically represented and unique digital assets stored on a blockchain.
How to Convert a Standard NFT become a Utility NFT?
With the surge of popularity and potential around utility non-fungible tokens, many are left wondering how they can add purposeful value to their collections. The answer lies in reforms rather than technological changes.
There are many ways to add utility to a specific NFT or NFT collection.
Let’s look at this example…
Kings of Leon's innovative $2 million NFT album release demonstrated how utility tokens can be incorporated into NFTs.
The collection featured two unique benefits to token holders: an exclusive piece of digital artwork and a chance to redeem the download for a limited edition vinyl copy.
Further enhancing their offering was an NFT variant that provided top seating at Kings of Leon shows, truly giving fans access like never before!
So, it’s less about the technology itself and more about the application of that technology.
Let it be your gateway to serve your customers better and increase revenue.
Applications of Utility NFTs
Utility NFTs are ushering in a new era of NFT innovation. Several industries have begun to recognize the potential benefits of harnessing NFTs with utility features - from finance, gaming, virtual real estate to fashion. And more to come.
Some examples of Utility NFT Projects
VeeFriends – A series of NFTs from Gary Vaynerchuk allows the token holders to participate in the VeeCon conference. This first-ever NFT-ticketed conference gives token holders an exciting opportunity to connect with other passionate NFT fans and learn invaluable tips from a master mentor himself; Gary.
World of Women – An NFT project that seeks to support and educate women and increase female participation in NFTs and Web3. World of Women NFT holders get access to benefits, including ownership of the artwork underlying the NFT and invitations to real-life events.
Starbucks Odyssey – Starbucks has taken its loyalty rewards program to the next level with Odyssey - a blockchain-based initiative featuring coffee-themed NFTs that unveils all sorts of amazing experiences for coffee lovers! From quizzes and puzzles in Journey activities, virtual classes teaching you how to make espresso martinis at home, and exclusive levels granting access to real-world opportunities like events hosted at Reserve Roasteries or an unforgettable trip to Starbucks' very own Hacienda Alsacia farm in Costa Rica.
The future of Utility NFTs
We're just getting started with Utility NFTs, but the possibilities are truly exciting! Innovative new use cases are emerging every day.
Imagine a world where everything from health insurance to loyalty cards and season tickets become digital tokens - with NFT holders able to access healthcare, discounts, or entrance to events.
Businesses could incentivize sales by offering customers exclusive discounts or freebies in exchange for their custom token - goodbye to paper coupons!
Plus, as the Metaverse grows ever more popular, we might even see special Utility NFTs granting holders access to games and virtual environments.
There's no limit when it comes to these versatile tokens.
Use them to prove ownership, build communities, get rewards, discounts, or preferential access to events, etc.
The possibilities and opportunities are astounding!
The technology already exists; how we use it is limited only by our imagination.
Before you get FOMO into launching your NFT, don't make a mistake like other businesses that aren't informed about the amazing utility that NFTs offer.
Our experts at Consortium 21 have helped many businesses make their foray into Utility NFTs. Reach out to Ms. Kate via WhatsApp to start your NFT venture today!