How NFTs Will Shape the ‘Metaverse’, and Why It Matters
Back in the 1970s, people knew the so-called ‘Internet’ was coming, but they didn’t really have a firm grasp of what it would look like or what it could actually do, for that matter. They just knew it had the potential to be big.
In a way, we’re reliving that same scenario again with the emergence of the ‘Metaverse’. Plenty of people and corporations have already branded the Metaverse as the future of the Internet, but it’s hard to pin down exactly what this Metaverse is and what its impact will be on how we go about our day-to-day lives.
One thing we do know is that NFTs are already playing a significant role. Who would’ve thought that those quirky, buyable memes would quickly morph into the building blocks of the Internet’s next incarnation?
But what does it all mean, and why does it matter?
A quick run-down on NFTs
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By now, most of us have heard of NFTs, but let’s be real – a lot of us might not know what they are. NFT stands for non-fungible token, and at the most basic level, that means they’re a sort of digital commodity that’s unique and can’t be replaced by something else.
Right now, a lot of the NFTs that are sold are artwork, whether that’s clip art, music, memes, or what have you.
These NFT assets are often tied to the Ethereum blockchain, although it’s worth noting that other blockchains are starting to implement their own versions of digital tokens.
And while they’ve certainly gained popularity within the crypto world, it can be hard to understand the appeal of paying $170,000 to ‘own’ a CryptoKittie image that can be downloaded by anyone who knows how to right-click.
That said, NFTs are quickly being tied to more than just weird Internet art. Some brands and corporations are beginning to experiment with selling virtual products or even converting things like physical real estate into NFTs. But how does it all play into the idea of the Metaverse?
What is the ‘Metaverse’, exactly?
It’s a great question, but one that doesn’t offer a lot of concrete answers. Depending on who you ask, smaller metaverses are already here in the form of games like Roblox and Fortnite.
To some, the Metaverse represents an extension of virtual and augmented reality capabilities that will allow people to meet up via virtual avatars (kind of like what VRChat is already doing). Others still have this nebulous idea of the Metaverse merging the digital and physical worlds through interconnected economies, assets, and experiences.
Tech companies and big brands like Facebook (now rebranded as Meta) and Google aren’t making it easier to pin down a definition. They’re pumping out hyped-up marketing campaigns that imagine futures where everyone wants to buy digital wardrobes to wear at Virtual Reality (VR) concerts and offices.
Ultimately, the best definition we have so far is that the Metaverse will expand upon many emerging technologies many of us already know and use today.
It’ll be an Internet that’s even more connected, leveraging things like AR, VR, and video to create an always-on virtual space for people to work, and play, and hang out with others.
When will it get here?
Like we mentioned earlier, some smaller ‘metaverses’ are already here. If you or your kid has ever played games like Minecraft or Roblox, you’ve already engaged with a metaverse.
The catch is, while these games may boast complex economies, virtual experiences, and an always-on virtual world you can access 24/7, they’re only a small part of the future capital ‘M’ Metaverse. And the truth is, we don’t really know when the thing that will be definitively called the Metaverse will come into being.
In all likelihood, it’ll be like how the Internet was formed, slowly at first, then constantly growing, expanding, and adding new parts and digital spaces.
Should you care?
It just depends on your preference. If you’re big into digital experiences, it could be cool to be able to integrate things like VR and AR into FaceTiming your family or watching a concert in a more tangible way.
With the Metaverse potentially linking together with external economic systems, digital creators could continue to profit from virtual goods like NFTs – and potentially more.
Why NFTs are so important within the Metaverse
In our physical lives, we have ownership over our things: our cars, our clothes, our homes, and other physical assets and property. The same can also be true in the Metaverse. Unlike in the real world, every single asset in the Metaverse can be bought, sold, or traded, giving whoever holds the asset the full right of ownership.
What’s more, proof of ownership in the Metaverse will be more secure than much of what exists in the real world, thanks to the support of smart contracts on the blockchain. There’s no faking ownership.
From digital items such as clothing like video game skins to digital property and art (and maybe someday physical items as well), anything can be bought and sold as an NFT in the Metaverse.
In an interview with Business Insider, Andrew Steinwold, host of the crypto podcast Zima Red, explained the importance of NFTs to the Metaverse.
Giving the example of a Fortnite skin, Steinwold said, “It’s kind of up to Epic Games’ total purview whatever they want to do with it. “If they want to delete my account, then they can do that … They can just say, ‘You know what, Andrew tweeted “screw Epic Games” this morning, we’re going to delete all this stuff.'”
He goes on to explain that instead of users adding value to places like Fortnite without getting anything in return, NFTs allow the internet to become a more capitalistic place, “where your time-money effort is actually rewarded through ownership.”
What some people are doing
Of course, some folks are already diving in head-first. Designer and illustrator Amrit Pal Singh has spent 40 Ether, or around $125,000, on digital artwork to display in Cryptovoxels, a metaverse that runs on the Ethereum blockchain. For him, ownership of these digital assets has been a way to showcase both his art and his growing collection.
Brands are also already capitalizing on the NFT hype, with companies like The Coca-Cola Company releasing digital clothing users’ avatars can wear in Decentraland and NASCAR launching a digital car for the game Roblox. And it’s just the beginning.
For many brands, the realization that NFTs hold the key to creating a functional Metaverse is leading them to embrace this new mode of ownership.
While there’s a lot of speculation on what the Metaverse will become and how our hard-earned money will tie into it and the digital economy, it’s important to remember that we’re still very early in the game. It’s not here yet, and it likely won’t become what we know as the real “Metaverse” for quite a while yet.
Still, if you’re someone who values staying ahead of the game when it comes to the blockchain and crypto world, it might be helpful to keep tech giants and the Metaverse on your radar in the coming years.
Next: The 13 Best Resources to Learn How to Invest in Crypto