Collectibles are fine, but do NFTs have any real use?

Blockchain technology has become much more than just being a ledger for safe cryptocurrency transactions, and become a trusted platform to immutably store information of various kinds. It is becoming a reliable alternative for tech support in companies dealing with supply chain and manufacturing and involves multiple companies and consumers transparently. Companies like IBM, Walmart, Kroger’s, Amazon, Nestlé's, Unilever’s have already introduced this technology. It helps in tracking a product’s journey through the supply chain.

With companies starting to view data as assets and warming up to the idea of applying blockchain technology in an attempt to ensure transparency and data security cross their organization, the possibilities of using the digital watermarking capabilities of Non-Fungible Tokens powered by smart contracts on a blockchain, are also being explored. Through NFTs, assets can be separately marked and their ownership can be established. This can be used extensively to track assets, goods, and services across multiple organizations, especially in the logistics sector. It creates a secure data sharing and transaction ecosystem for brands. Enterprise NFT can be put to use equally efficiently in sectors like media, fashion and luxury as well as banking and finance. Manufacturing companies can use it to track inventory data, banks can keep a tab on the lending history of the borrowers, and the potentials are immense.

In NFTs, data including transactions and records can be tokenized and stored on an immutable ledger and used as shareable, trackable and tradeable. These are unique cryptographic assets. These can be shared in a secure, trusted environment with a clear identification of ownership. The decentralized database that ensures easy access and auditability. Since the transactions on an NFT are timestamped and digitally signed, it creates a verifiable and secure audit trail.

How does Enterprise NFTs (ENFTs) actually help?

· In NFTs, data is stored in the immutable blockchain ledger and establish the authenticity of a digital asset in a secure way.

· Unlike cryptocurrencies, NFTs can’t be divided into sub assets and split among multiple owners. There can be a fractional ownership but the digital asset stays the same.

· NFTs are indestructible. The digital tokens are stored on a blockchain and will continue to be on it till the blockchain exists. So, the data stored on NFTs are stored forever, irrespective of its physical documentation.

· NFTs are scalable; the company can create innumerable but unique Non Fungible Tokens.

· Creation and transfer of NFTs aren’t expensive and hence the process is cost effective. Also, there is no need of a middleman.

· Ownership information can be securely stored on NFTs and any transaction or information transfer on it can be tracked and controlled. Each NFT can be traced back to its origin. This is especially helpful while working with complex supply chains.

· Companies can use this technology to secure important documents and prevent copyright and identity thefts.

Is anyone using it?

The Republic of San Marino, a small European nation with a population of just over 33,000, issued computerized COVID-19 immunization passports last year. Dubbed as the San Marino Digital Covid Certificate, these were stored on VeChain blockchain ledger and issued in the form of NFTs, which include two QR codes to validate the owner’s immunization record. In fact, this opens up the prospect of a global unified system where the government from any country can verify the vaccination status of a person through such NFTs. NFTs can also be used to maintain land records and real-estate transactions. NFTs can optimize the time and labor-consuming elaborate process spanning different geographical locations. Titles/ownership deeds of buildings and other physical assets can be turned into NFTs.

IBM has collaborated with IPwe, an IP ecosystem platform, to tokenize and commercialize patents in a safe and accessible trading environment. NFTs can be used to secure intellectual property rights as well which can be shared among different buyers and can used for licensing as well.

Real estate can be a very time and labor-consuming affair and has often been seen as a stagnant investment for large corporations, especially those with assets in different countries.

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