Sammy Baker

Understanding the Role of NFTs in the Metaverse

May 5, 2022

NFTs for some time now have proven to us that there is more to it than have opened the eyes of individuals and businesses to opportunities and it shouldn’t come as a surprise that the role of NFTs in the Metaverse cannot be overlooked.

Moving forward, it is also important that individuals understand what the Metaverse is and the potential it holds for our world today.

If you are an NFT newbie trying to understand the existence of the Metaverse and NFT’s role in it, you are just in the right place.

In this article, we will be taking a look at what the Metaverse is, what NFTs are, and how these two can work together to bring about technological advancements in more ways than we know.

What then is the Metaverse?

The role of NFTs

The term Metaverse was a term that was coined by Neal Stephenson in his 1992 novel, Snow Crash in which he described it as a virtual world that exists parallel to the physical world.

In the 21st century, however, the word Metaverse has been described as a 3D virtual world where people can carry out a variety of activities such as work, play, socializing, gaming, etc.

This particular view about the Metaverse has already been incorporated into video games and while this is the ideal scenario for most people, others have a different definition of the Metaverse as well.

Meta Inc owner, Mark Zuckerberg happens to be one of those with a different view of the Metaverse. In his view, the Metaverse is a successor to the internet and is similar to telephones at the time when they revolutionized the then economy.

Whatever view people have about the Metaverse, one thing we know for sure is the fact that the Metaverse is here to stay.

A Look at NFTs

The Role of NFTs

By now with the attention NFTs are getting, it may seem strange not to have ever heard of the term NFTs.

Nonetheless, NFTs are non-fungible tokens that act as digital representations of a variety of items.

Such items include art, music, photos, and even tweets. Right now, NFTs could be whatever you want them to be.

The term non-fungible simply means that the NFT is unique and cannot be duplicated as no two NFTs share the same features.

One interesting thing about NFTs is the fact that it has been in existence since 2014 but for some reason, they started to gain attention in recent times.

A proof of this would be Everyday’s the first 5000 days (a collage of images) which was created by famous digital artist Mike Winklemann and was sold for almost £50 million.

Now you might want to ask, but I can just view these images for free online so why even pay for it at all not to talk of such a ridiculous price at that?

Well to answer your question, paying for the images gives you complete ownership of them due to the unique code that is embedded in them. You automatically get ownership of the original images.

Speaking about the price, one factor that drives the price of every NFT out there is the amount of sentimental value it has to the person willing to purchase it.

Most NFT investors take pride in owning some collections and are always willing to brag about them which is why they are willing to go to great lengths in terms of what they are willing to pay just to get their hands on them.

How NFTs are different from Cryptocurrencies

The Role of NFTs

Just as has been made mentioned earlier in this article, NFTs have unique codes assigned to them by the blockchain they are a part of which means no two NFTs are the same.

Cryptocurrencies however are digital tokens that are fungible which is why they can be traded and exchanged one for another.

In terms of value, they are also equal to each other as 1 Ethereum is always equal to 1 Ethereum. This however is not the case for NFTs as no two NFTs have the same value.

The only similarity between the two is the fact that they both make use of a blockchain in shaping their characteristics. Apart from that, there is nothing else similar about them.

The role of NFTs in the Metaverse

At first glance, it may seem as though NFTs have nothing to do with the Metaverse considering that these two have different functions.

However, one important thing to understand here is the fact that there are certain areas where NFTs can function in the Metaverse.

Below are some of those areas:

1. Virtual Marketplace

It is common knowledge that the metaverse is a virtual world and in that virtual world, there exists a virtual marketplace.

In this marketplace, businesses and individuals can advertise their products and this can only be made possible by the products taking the form of NFTs.

This is why companies like Nike are already leading the way as Nike has acquired its Metaverse called the Nikeland and a studio (RTFKT) that now makes NFT products.

2. Art Exhibition

It may come as a surprise to many, but there exist certain Metaverses which exhibit NFT art.

One such Metaverse is Cryptovoxels where NFT enthusiasts can take a look at these NFTs in virtual reality.

With virtual reality, NFTs can be viewed with relative ease and all the angles are captured with great detail.

3. Real Estate

Now, this might be a puzzle to some. By real estate, what is implied here is that plots of land can be sold on the Metaverse as NFTs.

It is important to note that plots of land here are digital lands and not physical plots in the physical world.

Nonetheless, just as investing in real estate in the physical world can yield reasonable returns, as in the virtual world, real estate can yield reasonable profits as well.

An example of a virtual world that has incorporated this system would be Decentraland.

Decentraland is a platform where users can buy and sell plots of land as NFTs using the MANA currency (the official cryptocurrency token of Decentraland).

How to utilize the Metaverse and NFT as one

The Metaverse is still a relatively new concept as even the term itself means different things to different people.

NFTs however has gained massive popularity over time and are now the latest trend in the crypto space.

To utilize the Metaverse and NFT together, adequate resources would have to be made available which is a major challenge for most businesses.

Getting these resources however would put any business at the forefront to maximize as many opportunities as possible.

Right now, only very few businesses are fully utilizing the potentials of both the Metaverse and NFT.

If you own a business and you are looking to venture into NFTs and the Metaverse, having virtual reality developers would be a good place to start.

Not only that but you would also have to account for other technical aspects which would be critical to you being able to promote your business using both NFTs and the Metaverse.

Socializing and building experiences

NFTs are now being used as a way to communicate, have an identity and even build experiences across different parts of the metaverse.

This is why individuals who have these NFTs can easily establish communities and share ideas.

An NFT that stands out in this regard is NFT avatars. These NFT avatars give owners the ability to experience the metaverse like never before.

With it, owners can shape their identities and even navigate the NFT environment at will.

Examples of these NFT avatars include the Bored Ape Yacht Club and CryptoPunks.

These NFT avatars provide a lot of benefits to their respective owners ranging from access to exclusive events to closed communities where they would receive top-notch exclusive information.

These are just a few of the benefits that owners of these NFT avatars get to experience and it would only make more sense when more people come on board and embrace these opportunities.

When it comes to NFTs and the Metaverse there is only so much that individuals can benefit which is why efforts are being made where we would get to experience a world where these two work together in their full glory.

What does the Metaverse have in store for the future?

The metaverse is a very diverse concept and while it is still in its development stage despite it having been mentioned for so long, it can provide opportunities in the future where people can easily connect and interact with each other.

Right now something similar to this is being done through video games, but this can be taken a step further when businesses begin to take advantage of the digital space and individuals begin to see the benefits of such evolution.

What we need to do at present is to make sure that we embrace this technological revolution.

The world around us is always changing and that is why it is always important that we learn to adapt and be constantly updated if not, we would be left behind.