There’s no doubt about the very close relationship between NFTs and the metaverse. Even though many people still perceive NFTs to be just digital artworks and other collectibles that are minted and traded for money, the recent developments in the metaverse projects have included the use of NFTs to prove the many new potentials of the NFTs.
The first case of the metaverse NFT token was the first NFT.NYC conference in 2019 which deployed an NFT-based ticket for passage into the event. The event was no metaverse event though but it was a standard prototype of the NFT metaverse interplay.
Currently, many new projects that have emerged are built on the concept of the linkage between NFTs and the metaverse. These projects are paying more attention to establishing massive transformation and innovation in the approaches we interact online.
The journey to the discoveries and future of NFTs is a source of opportunities for investors, industries and enthusiasts which can also affect the usage and adoption of NFTs in the future.
One of the prominent ways of NFTs usage in recent times would be accessing the metaverse.
A good example of Decentraland proves how users can own virtual real estate in the metaverse with LAND tokens.
It is evident that NFTs are being massively included in metaverse projects, hence, they can improve the value of virtual assets in the metaverse. Can NFTs in the metaverse in turn improve the value of physical assets in the real world?
What Are NFTs
NFTs is an acronym for non-fungible tokens which are digital tokens like artworks, music, and videos that are non-fungible. That is to say that they are unique, indivisible, non-transferable digital tokens.
Each NFT is assigned a unique code that makes it unique such that no other person has the same token. They aid in representing both digital and physical asset ownership that can be transferred on the blockchain by the owner, allowing NFTs to be sold and traded.
NFTs are becoming impactful in almost every sphere, from art collections to entertainment, sports and gaming industries.
What Is The Metaverse
One can think of the metaverse as another world existing in a digital space.
The metaverse is a virtual environment built and running on blockchain technology where augmented reality(AR) and virtual reality(VR) technologies serve as visual component providers.
The metaverse, given its decentralised nature, has become a prospect for unlimited business opportunities and social activities.
Many businesses, brands, investors and developers have leveraged the pool of opportunities in the metaverse to create sustainable and innovative digital space.
Metaverse blends innovative technologies with models of interaction between participants to create a more versatile and scalable digital environment.
Uses Of NFTs In The Metaverse
NFTs are unique digital tokens stored in the blockchain while metaverse is the digital space built on the blockchain using the VR and AR technologies to improve social interactions in a digital space, it may be hard to connect their common ground at first. However, here are a few examples of how NFTs can be applied in the metaverse.
1. Shopping on the internet:
The world’s largest sportswear company, Nike, has ventured into the NFT-based metaverse. Customers can now buy tokenized footwear in a metaverse space called “Nikeland”.
While shopping in the metaverse, you can try on virtual clothing before purchase to prevent you from purchasing ill-fitting clothing. Some metaverse allows you to purchase tokenized garments in the form of NFTs, which may be swapped later for actual apparel.
2. Real Estate:
NFTs are good proof of real estate purchase in the metaverse. While big businesses like PwC, and JP Morgan have acquired plots of land in the metaverse which they will develop later, one can buy real estate with cryptocurrencies like ETH or MANA as connected to the Decentraland platform where users are offered LAND tokens after purchase. NFT reduces the risk of real estate frauds such as forced cancellations, unauthorised sales, false promises, and even possession delays.
3. Loans in the metaverse:
NFTs are good collateral in the metaverse but it’s not as simple as it appears. There are several variables to be considered when it comes to giving loans with convenience and safety. Decentralised Finance(DeFi) requires collateral to process every loan. The collateral in the instance of metaverse can be an NFT that you purchased.
How NFTs In The Metaverse Can Improve The Value Of Physical Assets In The Real World
Remember that models of the real world which carry many real-world properties can be built-in crypto.
A rare natural opportunity for this will be in the digital twins which create information about physical assets that are linked to the physical world.
Digital twins are meta-layers which, if bitcoin technology is integrated into the form of NFTs, all data and information about the physical twin can be verified and saved forever.
It is safe to say that digital twins are the metaverse versions of the physical twins and the technology promotes all the characteristics of the real world.
Cryptocurrency is mainly a subject of verification and validation which makes metaverse concerning its relationship with blockchain, to be considered a digital space that can be validated.
Since NFTs cannot be copied due to their linkage to the validation and verification process in time which further proves their non-fungibility property, as the capabilities of the NFTs grow, they grow into a new information dimension that is linked to the real physical world.
This idea is defunct if NFT domains are not included in it as they will become a non-fungible data space linked to us and our Web3 activities.
These domain NFTs can represent anything in the metaverse, it could be a car, a house, recording and validating every event etc.
The record and that infrastructure can be sold as a core component of the house which in turn, increases the value.
NFTs are fast being integrated into every sector of the world as it offers a more innovative way of interaction between developers and consumers.
Metaverse NFTs are a gateway to accessing the metaverse and since they are massively adopted into the metaverse projects, there’s no doubt that they will increase the value of digital assets in the metaverse.
Metaverse NFTs can also improve the physical assets in the real world through digital twins. Since digital twins are metaverse versions of physical twins which also promotes the features of the real world, metaverse NFTs invariably improve the physical assets of the real world as that of the virtual world.