Last year, non-fungible tokens (NFTs) emerged as a cultural storefront of the crypto sphere, and now institutional investors are following the so-called millennials and generation X into the space.
In an interview with ULTCOIN365, Ryan Wilkinson, co-founder of athlete NFT ecosystem Blockasset, said, “The influx of institutional investors in the blockchain and crypto industry is unavoidable.”
NFTs opened up new possibilities for art curation and distribution, swaying fascinated endorsements from pop celebrities. Nike, Sony, and Disney are among the organizations paving the way as mainstream players capitalize on the rock star appeal of next-generation technology.
While cryptocurrencies were built on the cypherpunk politics of undermining surveillance and financial exclusion, NFTs’ decentralized approach to digital creative content ownership and technological innovation is a more specifically youth-driven blockchain pitch.
According to Wilkinson, the non-fungible token market is developing in much the same way that decentralized finance (DeFi) did in 2020, with millennials and generation X driving growth. According to reports, nearly half of all millennials own a digital asset.
“The meteoric rise of defi…continues today as more people realize that it is better to invest in this space than in a bank deposit that can barely keep up with inflation,” Wilkinson said.
“However, in the beginning, defi did not have the widespread recognition that it does now, and the same can be said for NFTs,” he added, citing mainstream endorsements of NFTs by Snoop Dogg and Gary Vaynerchuk.
He also cites Visa’s recent $150,000 purchase of a Cryptopunk NFT as “a meaningful sign of acceptance” that will entice other institutional investors who may have previously dismissed similar assets as “speculative.”
A non-fungible token is an immutable and one-of-a-kind unit of data that is stored on the blockchain. NFTs can be used to represent photos, videos, audio files, and other types of digital files.
Patents on NFT
In a new report, research firm Global Data notes the entrance of institutional investors into the NFT space to better commercialize their patents. Kiran Raj, Global Data’s principal disruptive tech analyst, explains in a statement:
While the patent filing trend in the NFT space has been ongoing for some time, things are becoming more interesting in terms of using NFTs to represent patents, which can bring transparency and liquidity to the global IP market, which is frequently hampered by a large gap between patent filings and commercialization.
“Real-world use cases are critical for NFTs to grow beyond the hype. The use of NFTs to represent patents is one such example that can boost the future of NFTs because it can be a game-changer in the IP industry by bringing transparency and providing liquidity that would otherwise sit on a company’s balance sheet,” Raj added.
Traditionally, opacity in matters of ownership and lack of standardized management and evaluation of assets have limited IP transactions, with $1 trillion in intellectual property never transacted, according to IP specialist IPwe. The blockchain-powered transparency of non-fungible tokens appeals to institutional players interested in entering the space.
“Because of the blockchain-powered properties of immutability and provenance, NFTs can aid in better patent commercialization when the patent is owned as an NFT. Once the patent rights are transferred, they can provide the patent holder with complete ownership,” according to Global Data.
Disney filed a patent in July to use blockchain to manage and track the ownership of physical objects like toys, pins, collectible figurines, and trading cards, as well as their digital counterparts in the form of NFT.
The licensing of each patent can be tailored by custom coding the records into smart contracts and contract terms when patents are designed as an NFT. It is advantageous for businesses, particularly small and medium-sized enterprises, because it allows intellectual property to be treated as collateral of an organization’s value when seeking funding.
Emil Angervall, co-founder and chief operating officer of Corite, a platform that allows fans to invest in artists, envisions a new cultural use case for NFTs as a decentralized way to publish and earn from music rights. He stated to ULTCOIN365:
Music and artists can provide the key components of a valuable NFT: they are collectibles, similar to original vinyl pressings, and they can provide out-of-this-world experiences, such as getting backstage.
According to Angervall, NFTs have the potential to be a game changer for the $16 billion music industry, as the technology enables decentralized ways to finance music projects for both institutional investors like Visa and the general public.
“As more institutional investors recognize the opportunity in this space, fundamental changes in the music and creative industries will accelerate. NFTs have the potential to become as important to Generation Z as videos were during the MTV heyday of the 1990s, which will undoubtedly attract institutional investors,” he says.
According to nonfungible.com, global NFT sales peaked at more than $2.8 billion on September 6 and had since slowed to $1.8 billion by September 29.