Why This Project Might Be an NFT Grand Slam

A blockchain project in development could be a game-changer. In this video clip from "The Crypto Show" on Motley Fool Live, recorded on Feb. 23, Fool contributors Travis Hoium and Jon Quast chat about an exciting new protocol that would have real-world utility.

Travis Hoium: To be clear, there is nothing to buy right now. I believe in the United States especially, there's not a cryptocurrency to buy or anything like that. They're not currently any NFTs to buy but there is a blockchain or protocol called the Nectar protocol that is being developed. What this is doing is it's living on top of Ethereum (ETH 6.30%), so it's a layer to protocols, euro knowledge proofs.

What they're intending to do is basically create a HIPAA compliant protocol where you can put your healthcare data and it will live on the blockchain instead of living in a doctor's office or in an insurance company.

This is where, as I've gotten into blockchains, crypto, NFTs, your mind can start going wild about where you can use this for. When I first saw this a few months ago, I was like, this is one of those huge home runs that if this ever hits, this could really change everything because now you think about your healthcare data. Who has that data? You likely don't have it. I have little kids. If I want to figure out when they got their shots, even their allergy information, I've got to go to the doctor to get that information.

That information could live on the blockchain and the doctor and the pharmacist could just access that information through decentralized applications or dApps as they're called. That's where this could be really interesting. Now, it's a huge uphill battle with a market like the healthcare industry but what they're starting with is things like, I'm wearing a Garmin (GRMN 0.29%) watch that's collecting a lot of data about my health, about my heart rate, about when I worked out, how much I'm sleeping.

If we could send that data to the blockchain, and then when I go to the doctor, they can pull up whatever information is relevant to my doctor visit and say, "Hey Travis, it looks like your average heart rate over the last three months has gone up by five beats per minute. Let's try to figure out what's going on here" or whatever it may be.

Just think about it as the protocol or the blockchain itself is just a place to dump data and then these applications on top of it, you can really build anything on top of it. You could have somebody who's building nutrition plans or workout plans, or it could be accessed by doctors, or it could be pharmacists. There's so many potential applications for this, I think it's a really interesting concept.

As we talk about things like Bitcoin (BTC 1.69%) moving up or down or Ethereum moving up or down, some of it's a little cool but what's the real impact. Same thing with JPEGs. This is where you turn NFT JPEGs into real-world utility that's disruptive to a trillion-dollar healthcare market. It's something to be aware of because I think these utilities are really coming to the forefront as blockchain technology starts to mature and reach some sort of mass market.

Jon Quast: As I understand this, gaining HIPAA compliance, that's just massive. That takes intentionality, that takes thorough research, that takes effort. [laughs] This Nectar protocol has done that. As I understand it, the NFTs that could be built upon this bring the power of your data back to you.

You can now elect what can be shared, what can't be shared, and if there's any profit to be made from that data, remember this already happens. People already sell your data, people already buy your data because they can create things based on medical data trends that they're seeing. They can create a drug or some other treatment for it that they can profit from, so that's why it's valuable to them.

But what if you could disintermediate some party and you actually own it still, and you can actually be part of the profit process. What I understand what this NFT, an NFT project that could be built upon the Nectar protocol is that as the data is sold, then the NFT holders are rewarded as a result. Is that how I'm understanding this?

Hoium: You're understanding this right. This is where the tokenomics of NFTs and of cryptocurrencies gets really interesting because that's basically the token which is often what we call the cryptocurrency, is what's being traded. It's being purchased by, let's say a drug company, to get that data. They're paying for that data with the token and then the token goes to the NFT holders.

That's how there's not dollars going back and forth, but it's called tokenomics, so there's you've got to figure out how that token works and how you add value to both sides of the equation through that token. This is where we're in this new space of this crypto, funny money moving around but there is utility in these things like tokens and NFTs in a world like this where if it becomes a real thing, there is value to the early adopters if you will.

This is the thing where we're years away from really being a reality. But if a protocol like this is able to be built for healthcare, we could do this for, think about search all the data that somebody like Google [part of Alphabet (GOOG 9.96%) (GOOGL 10.22%)] or Facebook [part of Meta Platforms (META 0.43%)] has on all of us. You can see the same dynamics happening. It's really exciting to think about how this could be disruptive to traditional businesses and really be a win-win for everybody.

Now that doesn't necessarily mean that that's exactly how this is going to play out. This protocol specifically may completely fall on its face, but it's the kind of utility that we want to bring forward and talk about because this is where there's really disruptive opportunities in the crypto landscape.