The world has witnessed a myriad of changes over the years but it’s undeniable that technology is experiencing a large number of the changes which have impacted our lives.
While we have seen many of its positive effects in our lives there still are its not-so-great effects as well, but one thing is clear. We are going through them all and taking it in as it comes.
Recently, there has been a buzz in the tech, crypto, and gaming world about the metaverse. Even if you are not conversant with those spheres, chances are that you’ve noticed the increase in chatter on social networks like Twitter or Facebook.
Especially since Facebook announced its plans to build the Metaverse.
You might be wondering what the metaverse is and what effect it will have on technology.
Although how the metaverse will work and who is going to control it is yet to be made known. However, it is a term used in a wide range of forward-looking gaming, tech, and NFTs enterprises.
In this article, we will explain what the metaverse is, what exactly is NFTs and how to use NFTs in metaverse.
What Is The Metaverse?
The term Metaverse was first coined in 1992 in the science fiction book ‘Snow Crash’. It consists of the prefix ‘Meta’ which means beyond and the root word ‘ ‘Verse’ meaning the Universe.
Metaverse is a digital environment operating on the blockchain wherein technologies like Visual reality(VR) and Augmented Reality(AR) could serve as the visual component provider.
It can be understood as a shared virtual space that resembles our experience of the physical world.
They are the digital 3D universes that incorporate numerous processes and elements such as game worlds, communications, finances, personal profiles, and NFTs.
The extent of the metaverse is associated with the freedom it offers. It allows for everyone in the metaverse the creation, purchase, and viewing of NFTs, collect virtual estates, join social communities, games, and so on.
The advantages it holds are endless thereby opening up several opportunities for monetization of digital assets and the real world where users and businesses can incorporate into its framework.
Now that we know what the metaverse is, let’s talk about the NFTs
What are NFTs?
The NFTs have taken the internet by storm and forced everyone to pay attention to the arising technology and the perceived benefit it offers the average NFT holders. This was a result of many witnessing how NFT based digital assets have sold for millions of dollars.
But what do NFTs mean? Simply put, it means a Non Fungible token. It is a technology that represents the ownership and uniqueness of both real-life and digital assets.
The main quality of an NFT is that it is non-fungible. To explain this better, let’s be clear on what fungibility means. A fungible item is an item that is mutually interchangeable with another. For example, 100 dollars is worth the same as another 100 dollars. Also, 1 Bitcoin can be exchanged for another 1 Bitcoin. Despite changes in address or serial numbers on the notes they are considered fungible and can be interchanged to facilitate transactions.
On the other hand, NFTs are not the same. Each NFT comes with unique identifiers that make them different from the other even if they might look similar.
It is also impossible to mistake digital assets for the other as each has properties that can be used to tell the authenticity and distinctions.
In addition to tokenizing digital assets, NFT can also represent the tokenized version of real-world assets such as land and properties.
What are NFTs in Metaverse?
The initial existence of NFT on the blockchain was its usefulness in trading digital assets but now its uses have diversified.
The role of NFTs within the digital environment of the Metaverse is that it integrates with existing VR and AR thereby regulating the whole space.
This means that NFTs in the metaverse can represent ownership for anything including virtual avatars, in-game assets, and digital real estate properties. Also, the Metaverse-based NFT marketplace avatar explores the marketplace, takes a look at the digital assets, and acquires items of their choice.
How To Use NFTs In Metaverse
NFTs are the main component of the developing metaverse where growth relies heavily on the tokenization of assets. NFT is expected to work in the metaverse as real assets work in the real world.
The NFTs have various utilities in metaverse which stems from powering interoperable blockchain games to conferring ownership of assets. Every metaverse project has to blend NFTs and Metaverse to utilize their combined benefits.
It’s undeniable that the role of NFTs in Metaverse is vital. However, the major reason NFTs are often mentioned in the metaverse is their viability in blockchain games. Here are how to use NFTs in metaverse:
- Crypto Art
This is probably the most popular use of NFTs since we are witnessing artists showcase their talents and monetize them with the help of blockchain. The notion is to create a piece of art(for example, artwork, music, or videos), mint the NFT version on the blockchains, and put them up for sale.
The possibility it possesses has boosted the digital landscape as hundreds and thousands of artists with the new way of marketing their works independently since before this they had relied on services of intermediaries.
NFT offers a self-initiated method of accessing buyers where all they have to do is create an NFT version of their works and list them on the NFT marketplace Such as Opensea, where potential buyers can access and purchase them. All these will be done without the hassles of middlemen.
We cannot talk about how to use NFTs in metaverse without mentioning the NFT game. This is because the NFT based game gained lots of interest because of its play to earn benefits.
This is intriguing especially to Gamers who can now earn money whilst enjoying their favorite games simply by using the NFT as an anchor for their gaming experience.
To make this possible, game providers will have to tokenize their in-game assets including the weapons and avatars, in a way that users that acquire or unlock them have their own. As such, they can sell them or trade them in for more bonuses.
In other cases, the game provider implements special characteristics that let gamers breed other NFT based assets. All in all, the goal is to provide gamers with the opportunity to earn while they play.
NFTs provide the means to tokenize real-life assets. These assets can also be divided to allow two or more investors to own such real-world assets.
This system will allow those who cannot acquire the assets fully to be able to do so partially.
- Decentralized Finance
We have witnessed the growing attempt of crypto entrepreneurs and developers to merge the strengths of Decentralized Finance(DeFi) and NFTs to create ecosystems where users can access various yield generating opportunities since the beginning of 2020.
For instance, there is the possibility of collateralizing your NFTs to access loans. This opportunity removes the need to sell NFTs to raise funds. To access it, all you have to do is lock the NFT on a Defi protocol as collateral and receive an amount that is a percentage of what your NFT is worth.
Although many of the protocols broadcasted as a combination between NFT and Defi are still tentative, there are enough reasons to believe that they would unlock the next level of growth for both crypto sectors.
- Digital identities
NFTs have also been teased as a potential solution to eliminate some of the issues associated with digital identities. It is worth mentioning that digital identity systems can capitalize on the immutability of blockchain data to lessen the occurrence of identity fraud.
The metaverse especially has had multiple fraudulent attempts and this is an important way to use NFTs in the metaverse.
Now that you know how to use NFTs in Metaverse we now know that NFTs are the new trend so let’s talk about how it will impact the metaverse.
How NFTs will Impact The Metaverse
With everything said about the way NFTs work in the metaverse, you must have noticed that NFTs could introduce disruption in the existing world, especially in the usual social networks precedents of users interaction, socialization, and transaction in the metaverse.
But how do these effects translate broadly on the metaverse? Here is how NFTs will impact the metaverse.
Extension of Social Experiences, Identity, and Community
NFTs will play a crucial part in the experiences, identity, and community in the metaverse. This means that the possession of certain NFT assets can signal a person’s support of a project. It allows for like-minded people holding such NFT to form their communities to share experiences and create content together.
A Transparent and fair economy.
Metaverse allows users and businesses to port real-world assets and services into its virtual decentralized environment. One method of inviting real-world assets into the metaverse is through using innovative gaming models such as play-to-earn games.
Play-to-earn is one method that engages and empowers players of blockchain games. Players can take part in the game and earn for the value they add while they play.
The games consist of guilds that act as intermediaries that purchase gaming assets such as land and properties. The guilds also help fund and lend assets to players who use them to earn and would only take a little share of the earning.
As a result, it helps to promote a fair and transparent economy as anyone can play.
New Development for Virtual Real Estate
Just as in the real world users can also buy virtual properties in the Metaverse. The fundamental blockchain technology and NFTs let users own and develop virtual real estate based on their preferences. Users have the freedom to purchase and trade these virtual properties and rent them for passive income.
They can also build different structures such as online stores on the virtual land and use these spaces to host social events. Decentraland is one of the best practical examples of how virtual products are auctioned in NFTs. The idea of virtual real estate has attracted many industries as it facilitates the selling of tickets and merchandise online.
The Metaverse with the use of NFTs presents several social and financial opportunities by offering unique ways for people to transact, interact, earn and gather in the digital environment.
The NFTs opportunities are enormous and it’s no surprise many have seized and are still taking advantage to enter into the world of the metaverse.
We believe NFTs are key to unlocking a new world of wealth and leverage in the emerging metaverse.