The Coming Era of Dynamic or “Living” NFTs
Gone are the days of static non-fungible tokens, often referred to as simple NFTs.
Next-generation use cases for NFTs are granting these blockchain-secured digital assets far more utility … and very soon, they’ll be more prevalent in our lives than ever before.
We’ve spent a lot of time addressing NFTs in recent months, documenting their impact on the world of collectibles and art, for example, that allow emerging artists to cash in quicker on their talents. NFTs have also been used to tokenize other types of real property to preserve their characteristics in an immutable format.
Now, though, in addition to “static” NFTs, we have “dynamic” NFTs or dNFTs, a new generation of NFTs that can be modified by the owner and/or updated and enhanced by means of built-in smart contracts that describe when and how the dNFT’s attributes and metadata can be automatically modified and updated to reflect new, external data and conditions.
It should be noted that given the channels for automatic or owner-initiated updates to dNFTs, they’re not expected to be as secure as static NFTs – at least initially. But let’s face it, crypto safety in the NFT space is never 100%, given human error and the presence of determined and extremely skilled hackers.
In most cases, and to preserve the integrity of the dNFT, the automated changes are based on verifiable events that are then incorporated into the metadata of the dNFT via an “oracle,” a smart, blockchain-stored contract that links the on-chain code with verifiable off-chain data.
The Upside Appeal of Dynamic NFTs
Why would anyone want to change an NFT?
Incorporating new information and data into an NFT can keep it relevant or even increase its value and utility.
Certain assets will never and probably shouldn’t ever be changed, just like adding a more expansive smile to the actual Mona Lisa would be ill-advised. And it can be argued, for example, that a person’s tokenized military record, once they’ve retired or have left the service, shouldn’t be subject to editing or updating.
But for many other categories of digital assets, and there are more of them coming into view every day, it makes sense to objectively improve certain underlying unique characteristics over time to reflect some new situation, as we’ll see in some of the future use cases suggested below.
Use Cases for dNFTs in Your World
As NFTs are tokenized in more and more settings, the value of updating them is clear. We’ve emerged from NFTs strictly being used in the context of collectibles and preservation to their application in a dynamic, changing world.
Art World
Certain aspects of an art piece can be improved without altering the primary image. Think about an NFT with the portrait of some famous person like Abraham Lincoln or Wolfgang Mozart that incorporates a background that’s constantly changing to reflect the varying seasons. Also, an artist who’s sold their NFT can modify their original work with the advanced permission of the owner via a smart contract.
Real Estate
We’ll soon have dynamic NFTs for a residential structure that incrementally records all the repairs and physical changes made to the building in real time, along with periodic increases in assessment values, all driven by smart contracts and/or the owner’s input.
When it’s time to sell the house, all of that information will be documented in one place, so the negotiations will be based on better, more complete information. The sale process can be shrunk down and will happen much quicker, possibly even bypassing title searches and assessments. New ownership of the property’s dNFT will go hand in hand with new ownership of the property itself.
Digital Identity
Passports, visas, and driver’s licenses will be digitized with a dNFT, and the personal information will be routinely updated. Our digital identity will evolve with us. As a condition for digitizing their documents as a dNFT, an issuing authority will include an immutable smart contract connected to the token that will record any sanctions or restrictions imposed by a governing authority.
Gaming
Within an augmented-reality game, as a participant reaches new levels, gains new skills, or augments their persona, these changes will be instantly recorded within the player’s dNFT based on a smart contract embedded in the game.
Sports cards
Athletes rack up accomplishments throughout their careers and even after they retire. While there may be value in preserving a static, non-changing “rookie year” NFT card, dNFT versions will continually update the player’s stats, awards, best plays, and other accomplishments earned in subsequent years.
Authors
One way authors can keep their readers on the edge of their seats and increase the writer’s exposure will be to release a book one chapter at a time through their evolving, body-of-work dNFT. They’ll offer and release their sequels through that dNFT as well.
Collaborative projects
From blueprints to management plans, dNFTs will offer a secure space for collaboration, incorporating authorized input from stakeholders as well as automated input added via secure contracts related to costs and budgets, for example.
Clearly, dNFTs won’t simply be an incremental improvement on traditional NFTs. They’ll be a game changer.
Very few things in life remain the same. Those that do can be captured and held securely in a static NFT.
But in the future, nearly all manifestations of change in our lives and in the world around us will be recorded in dNFTs, creating not only an evergreen repository of information but a history of those changes as well.
