Does NFT have a future?

I can definitely see NFTs being useful in verifying and tracking the ownership of digital assets in decentralized gaming.

They will also be extremely useful for digital fine art. And by fine art, I mean legit works of digital art from noteworthy and talented artists that have put significant time and effort into their work.

It seems to me that NFTs will also revolutionize the music industry, as smart contracts and NFTs will allow artists to collect automatic royalties on their music collections when the ownership of that music is transferred.

There are a lot of NFTs being sold that really aren't unique or special in any way. My teenage son just bought a $40 NFT of a 3D cartoon character but the kicker is that they created like 5,000 slightly altered versions of the thing, so each one is technically unique but it's very subtle. They all got snapped up the first day it was released, and of course now everyone that bought one is trying to flip it for 10x return or more. Maybe that will actually happen but I seriously doubt it, so I'm not seeing that particular use case as being something that will really last for a long time. These kids hear stories about NFTs getting flipped and they think they can do the same not realizing that they really don't have anything that someone else would want to pay a serious premium for.

 

The NFT is owned in conjunction with the artwork and just verifies that you own the original work of art or some special version of it.

So an NFT of a particular work of art basically says "People can reprint this a million times, but I have the ORIGINAL one."

So an example in the analog world is that you can print out a hi-res photo of the Mona Lisa online and then frame it and hang it on the wall in your family room. But everybody knows that you don't have the real Mona Lisa because the real one is sitting in the Louvre in Paris behind bullet-proof glass. So an NFT just confirms through cryptography that the art you own is actually the original work of art.

 

The rights that are granted to you are built into the terms of the smart contract that was created when the NFT was created or "minted" as they say. So for example, I bought an android tablet about 5 years ago and it had some sketch app on it, so one night on the couch while my wife was watching TV, I decided to check out the sketch app on the tablet to see what it was like. I scratched out this little "painting" while I was goofing around with the virtual brushes and trying to figure out how the program worked:



I could decide to mint an NFT for this and sell it if I wanted to. Let's say I created an NFT and the price is $100 and one of the terms of the underlying smart contract attached to the NFT is that you have the exclusive rights to this and you can even sell it to someone else if you want to, but I require a 15% commission on the sale, and that 15% is automatically taken out and sent to my Ether wallet address the very second that you flip it to someone else confirmed by the sale transaction on the blockchain. Assume that a couple of years go by and you decide to sell your NFT for $1,000 and you find someone who is willing to pay for it. All of the same rights and terms of the underlying smart contract transfer over to the new buyer. So the new buyer pays the $1,000 and $150 automatically goes to my wallet, and the remaining $850 goes to your wallet. You originally paid $100 so you netted $750 out of the deal. And the beauty of the system is that I got a royalty for my work as the original artist, you're happy because you netted $750 on the deal, and the buyer who paid the $1,000 got something he really wanted at a price he was willing to pay.

Now in a real-world transaction, there would also be some transaction fees paid to the Ethereum network, but for the sake of simplicity what I described is the basic overview of it all.