Overview of Non-Fungible Tokens: Key Features, Opportunities, Challenges, and Business Use Cases

Abstract

Non-fungible tokens (NFTs) gradually move into public awareness before exploding into mainstream adoption at the beginning of 2021. Although the cryptocurrency market experienced a downturn in 2022, the total volume of NFT sales continued to grow compared to the previous year. Nevertheless, NFT technology remains in its nascent stages, and many companies and individuals still do not understand how NFTs work and how to apply them to create value or solve real-world business problems.

This paper will start by providing a comprehensive overview of NFTs, encompassing aspects such as their definition, underlying technology, essential properties, current market landscape, and primary concerns. Then, to delve deeper into NFTs, the author investigates business case studies across five industries: NFT digital art, NFT ticketing, NFT gaming, NFT digital wearables, and NFT digital real estate. Subsequently, plus and minus analysis is conducted to comprehend better the opportunities and challenges posed by NFTs in the business world. The final section of the paper offers predictions on the future of NFTs, aiming to equip businesses and individuals with the necessary insights to fully harness the potential of NFTs while mitigating potential downsides.