Why Use Utility NFTs for Utility Companies?

The new, blockchain-based technology of Non-Fungible Tokens (NFTs) has practical applications outside of art projects.

NFTs burst on the world a few years ago: they are unique, individual artworks, usually held on the blockchain using the distributed ledger technology (DLT) and “smart contracts” that Bitcoin and Ethereum pioneered. People buy and sell them, usually in the hope of making a profit.

However, the technology has practical, real world use cases. 

 

What are Utility NFTs?

Utility NFTs are non-fungible tokens which are created to offer specific usages or functionalities, rather than being purely collectible. This value comes from its use outside the NFT, hence the presence of artwork on the NFT or the lack thereof won’t affect its value, unlike traditional NFTs that are purely for art purposes.

These NFTs can be used for a variety of functions, such as granting access to content or events, representing identity, ownership or membership, unlocking in-game benefits or features, providing voting rights, enabling ticketing for events and more.

 

How could utilities benefit from this technology?

Two use cases are already in existence.

 

IMPT - Utility NFT Project to Help Fight Climate Crisis

IMPT is a utility NFT project as it is utilizing blockchain technology and NFT ownership to help fight the climate crisis. It was launched in November 2022. The project aims to turn carbon credits into tradable and ownable NFTs to help its users offset their carbon footprints and fund eco-projects around the world. The advantages of this over conventional carbon credits is that there won't be any fraud or double counting, where two companies claim use of the same credit. The project has already raised millions of dollars.

 

Trading Energy Credits in DER-based Systems

There is a widespread need for easy, low cost accounting of bidirectional energy flows, for example where a home has solar panels, an EV, and battery storage. Instead of a one-way input from the grid, there will be a complex, ebb and flow of energy, which will need to be properly accounted for, and Utility NFTs, with the triggered applications called “smart contracts” would be one way to accomplish this. Effectively they would be like a secure credit card to which payments flow in and out.

Utility NFTs are a new concept, and more business use-cases will be initiated in the next few years.