Innovations enabled by NFTs 

The recorded ownership status provided by NFTs has led to some exciting innovations.

Given the way NFTs provide an easily accessible ownership history, the value of an asset can be directly affected by its provenance.

For example, if a famous art collector purchases a piece of art via an NFT, the mere fact than an influential collector has owned it, means that this piece of art may be worth more. The NFT will record that this ownership has occurred and ensures that it is tied to the artwork.

An NFT representing the ownership of a  guitar that a famous musician once owned could ensure that this value is recorded and attached to the guitar. 

A rare fretless bass guitar sold at Bonham's for 
£237,562, with that price largely driven by the 
fact it had been previously owned by George 
Harrison

Another interesting aspect of NFTs is that they enable resale value to be tied to original creators for the rest of the assets life. Imagine you create a piece of art and then sell it. With NFTs, you can add a mechanism that ensures that for every additional resale you receive a certain percentage automatically. 

NFTs can also make fractionalised ownership more accessible. It’s important to note that it’s not the NFTs themselves that are fractionalised as they are indivisible. Instead, owners can create NFTs relevant to pieces of a fractionalised asset making buying the asset more accessible.  

These are just a few of the innovations that NFTs are enabling, and as with most things crypto, the space is new and continuously evolving.

A lot of the challenges lie in scaling the technology and establishing standard protocols and interoperability. As these challenges are increasingly better addressed, we will see more innovation and use cases for the digital trading of assets that are only made possible by crypto.