The impact of Non-Fungible Tokens (NFTs) on traditional businesses is quantifiable in several distinct operational, transactional, and economic variables within multiple industry sectors. NFTs, characterized by their indivisibility and uniqueness, are registered on a blockchain.
NFTs facilitate the buying, selling, and ownership of digital art on blockchain platforms, enabling artists to monetize their digital creations without physical reproduction. NFTs have enabled a notable shift in the economic dynamics of digital art transactions, allowing artists to receive compensation that potentially reflects the market value of their work more accurately.[1]
NFTs are also utilized to denote ownership of physical art, enabling digitization of ownership and transaction logs.[2][3]
Music industry
Utilizing smart contracts, NFTs can automate the distribution of royalties upon secondary sales, ensuring artists obtain a predetermined percentage.[4] The embedded smart contracts within NFTs enable transparent and pre-agreed upon royalty distributions, reducing potential disputes and ensuring that original creators are compensated for subsequent sales.[5] This transparency and assurance of financial compensation upon resale is a novel development in compensatory mechanisms within the music industry.>[6]
Gaming
Game developers leverage NFT sales as a financing mechanism, providing early backers with unique, often utility-based, digital assets.[7]
