NFTs are distinct from the tokens used as cryptocurrencies due to, as the name suggests, their non-fungible nature. This means that individual units are not interchangeable as are, for example, US Dollars or Bitcoin. Each NFT is distinct and able to host unique information particular to the individual token.
Although many NFTs can be minted from the same contract, each token has its own Token ID and contains discrete data. This makes them suitable for use as a secure tool for demonstrating membership, authorising access, proof of purchase, etc.
Some NFTs are based around a community element, with ownership of the NFT granting membership to an online social club. Examples include Bored Ape Yacht Club and other popular NFT art collections. In addition to private online content, membership also allows access to exclusive events where owners can meet, collaborate or just enjoy the party.
Similar mechanisms of NFT access, however, can apply to a wide range of organisations, such as workplaces, health centres or subscription services.
In cases where sensitive personal information is involved, a token can be minted to grant access without revealing details, removing the need for trust between the parties involved. Hosting credentials on a blockchain rather than a centralised database also ensures that, in the event that an organisation’s servers experience unexpected downtime, the validity of the token won't be affected.
In the same way, NFTs can be used for electronic ticketing of online or real-world events without collecting personal information. This is also an opportunity to cut out ticketing companies that take advantage of their monopoly over the sector to demand exorbitant booking fees. Tokens can be programmed to distribute revenue automatically and allow or prohibit secondary sales in any way that the organisers see fit.
Flipping the above on its head, attendance can also be represented by an NFT (e.g. Proof Of Attendance Protocol), allowing event organisers to issue a token to attendees. This allows for individuals to maintain a permanent public record of their experiences as a way to, for example, document training sessions or keep digital mementos of a special event.
Tokenized proof of purchase for luxury goods can also be implemented via NFTs. Status symbols such as designer watches or handbags are often falsified and sold as genuine. An NFT would act as an immutable, transparent provenance record for clothes, jewellery and accessories, making the sale of these imitations very difficult and giving confidence to buyers on secondary markets.
Given the countercultural stance of many key proponents of blockchain technology and cryptocurrency, organisations based on NFT membership remain somewhat underground. However, as adoption grows, it is likely that the mainstream will turn to NFTs as an authentication tool in the future.
