If casinos like vulkan-vegas.pl start thinking of accepting cryptocurrencies, some hotels are already using NFTs as a payment method. Travellers now have the opportunity to buy NFTs, and in return, they can use these NFTs to secure their hotel rooms. The NFT also functions as insurance, as the person who owns the NFT can resell it in the market. If they do, they are merely transferring the reservation to another guest.
Pinktada Started It All
Pintktada is a start-up that offers a hotel booking system using NFTs. It is an app or platform where hoteliers and customers can come together and transact. However, instead of cash or cryptocurrency, the medium of exchange is a non-fungible token.
On this platform, a customer makes a reservation, and the hotel collects the revenue. This payment is guaranteed. If the customer changes his mind, the NFT used for the reservation is sold to another person. On some occasions, the person who originally paid the NFT can retain it but use it on another property on the Pinktada platform. For example, the customer can use it to pay for a reservation at another hotel. The insurance here is that Pinktada will buy the NFT back. The hotel can count on the revenue, guaranteed, while the traveller has no worries because he can enjoy flexibility.
Pinktada currently has a huge portfolio of hotels participating in this new method of transaction. They have hotels located in the Caribbean, Hawaii, San Franciso, and many more.
What is an NFT?
An NFT is a non-fungible token. It is a digital asset backed by cryptocurrency. It is nothing more than a digital file, but then it has a unique signature.
Here are some examples of NFTs:
Can people just copy these things as they are digital anyway? Yes, they can. However, that copy has little to no value because it has no digital signature.
So, how does NFT gets its value? The value of an NFT depends on demand. Since an NFT has a unique signature, there can only be one. Because of this, the NFT may have copies, but there is only one original file that has an actual financial value.
People want to own things. If something is exclusive—legally—then people do not really care how many copies are made. For example, it is easy to replicate the Mona Lisa painting. However, there is only one unique Mona Lisa, and the art collector knows it. The experts know which Mona Lisa is real, and it is the real deal that has the real value.
NFTs work in the same way—there is only one original piece, and if there is a demand for that singular piece of work, then the price will go up.
How Does the NFT Reservation Work?
To make this process work, hotel owners convert their available hotel rooms into an NFT. This NFT is what people buy and sell in the NFT marketplace.
Think of the hotel rooms as concert tickets. If a person buys a concert ticket, he has to go. The thing is that this person can change his mind and does not want to go to the concert anymore. The ticket, which is a piece of paper, has value. The ticket owner now has to choose whether or not to give the ticket to someone else.
The alternative is to sell the ticket to someone who is interested. As such, people sell concert tickets to other people. Most of the time, they do it on a site called Stubhub. Now, Person B buys the ticket from Person A. Person B goes to the concert, presents the ticket and watches the concert. Of course, there is a deadline for this ticket to be consumed. Once the concert is over, this ticket has little to no value anymore.
The same principle works with NFTs in hotels:
- The hotel room becomes an NFT, and a customer buys it from Pinktada.
- Let us say that the room reservation is for December 25th, and today is November 30th. The customer buys the NFT and reserves the room.
- By December 23rd, the customer changes his mind and decides not to go. In a traditional method, he will call the hotel and cancel, and the hotel will charge a cancellation fee.
- Hotels charge cancellation fees because that room will now be empty by December 25th. Since Customer A cancelled, the hotel has no revenue.
- With the NFT system, Customer A can sell that NFT (the hotel room) to Customer B. If Customer B buys the hotel reservation, the hotel gets a customer, and Customer A has no worries.
- What if Customer A failed to sell the NFT? In that case, Pinktada is the one who shoulders that reservation cost.
Will This Method Work?
It depends. Many years ago, people thought that cryptocurrency was just hype—a fad that would eventually go away. People said that it would never work, but then look at the world now. Many institutions use cryptocurrency, and even governments are passing legislation about it.
NFT is the new deal, and it may take some time to catch up. Eventually, however, they will find a market, and people will use it as a means of exchange.