How Will Dynamic NFTs Really Change The Way We Use The Blockchain?

August 10, 2021

NFTs allow more functional uses for blockchain and smart contracts once they become dynamic!

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NFT = art for the digital world

That's how a lot of people think of NFTs right now.

In fact, one NFT art piece was sold for $69M earlier this year.

But it's much more than that.

We won't be explaining what NFTs (Non-Fungible Tokens) are.

We want to jump right into the good stuff!

But you can learn about NFTs here.

The next level of NFTs are dynamic

What exactly does dynamic mean?

Dynamic NFTs change based on external data.

Let me give you an example:

  • You have a rookie basketball player card NFT
  • All of a sudden, he does really well and becomes MVP
  • Now, the card evolves and the NFT art now says "MVP" with shining gold letters!

The NFT art evolved and now looks different.

But did you notice the really important part?

Data on the blockchain (NFT) used information from the real world (MVP status).

Normally, the data between the 2 worlds stay separated.

But now, they're interacting.

Let me give you the quick breakdown on how this works:

  • Oracles are the software that allow the blockchain to use data from the real world.
  • But having a single oracle puts the system at risk because the whole point of blockchain is for everything to be decentralized. What's the point if there's a single connection point that can break?
  • Chainlink solves this. It's a decentralized network of oracles.
  • With the new availability of Chainlink, the blockchain can use information from the real world without jeopardizing the decentralized system.

This unlocks a whole new world for NFTs

The main benefit is "smart contracts".

"Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met."

Here's an example with education:

  • Let's say you start a course.
  • You receive an NFT.
  • Every time you progress, your NFT evolves and indicates your new level in the course.
  • By the end, you have a completed NFT - a certificate.

Here's another on passports:

  • Instead of a passport, you receive an NFT.
  • The NFT imports your personal credentials from the real world.
  • Every time you travel, the NFT is updated with the countries.
  • No need for stamps. No more losing your passport.

There are so many opportunities with this technology.

More examples at the end of this article 👇

The company at the forefront of Dynamic NFTs

Ether Cards got popular recently with their Dynamic NFTs.

They partnered with basketball player LaMelo Ball to create a Dynamic NFT for him.

7 Dynamic NFT Opportunities:

  • Gaming: Get an in-game item that evolves as you reach milestones in the game.
  • Passports/Identity: Verify personal credentials and manage your own information.
  • Certification / Education: As you progress through your course, your NFT will change to reflect your level.
  • Drive Business (Discounts/Points/Monetization): Use Dynamic NFTs with credits that are "redeemable". The NFT changes depending on how much is used. Dynamic NFTs with redeemable perks can also be sold.
  • Tickets/Access: Dynamic NFTs that become "used up" once you access something with it. Maybe concerts?
  • Valuation (property, stocks, equity): Get a Dynamic NFT for your investments. It can evolve as the valuations change. Startups can also raise money with NFTs (if successful, NFTs can even hold value like equity).
  • Supply Chain: Dynamic NFTs can be used to track physical assets in a supply chain. This helps quality control and counterfeit reduction.

Companies to watch

Sources

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