In 2021, NFTs seized the world by storm, ushering in a digital creative revolution while also becoming one of the year’s fastest-growing asset classes.
Non-fungible token technology has enabled artists to sell digital originals without the use of middlemen, while also receiving royalties on secondary sales of their work. However, this is only the beginning of the capabilities that non-fungible tokens bring to the burgeoning web 3.0 world., how relevant are NFTs in the Web 3.0 platform? What is the future of the internet?
What Are NFTs?
Non-fungible tokens, or NFTs, are unique and non-transferable data units recorded on the blockchain, which is a digital database that underpins cryptocurrencies such as Bitcoin and Ethereum. and acts as a public ledger that allows anyone to check the legitimacy of the non-fungible token and who owns it.
Those assets, unlike NFTs, are fungible, meaning they can be replaced or exchanged for another identical one of the same value, much like a dollar bill.
NFTs, on the other hand, are one-of-a-kind and non-interchangeable, which means that no two NFTs are the same.
NFTs, in plain English, turn digital works of art and other collectibles into one-of-a-kind, verifiable assets that are simple to trade on the blockchain.
Even though it is still far from straightforward for many individuals, the payback has been enormous for many artists, musicians, influencers, and others, with investors paying top cash for NFT copies of digital images.
What Is Web 3.0?
Web3 refers to a decentralized internet that is based on distributed technologies like blockchain and decentralized autonomous organizations (DAO) rather than concentrated on servers owned by individuals or corporations.
As a result, the goal is to create a more democratized Internet. No single party will be able to control the flow of information or “pull the plug” on a network because they own the hardware it runs on. Users will have voting rights over what rules and regulations are in place and how they might be applied, and they will manage the servers, systems, and networks from which applications are run and data is stored.
Why Is it called Web 3? Because, after the worldwide web (web1) and the user-generated web, it is predicted to be the internet’s third major evolution (web2, or social media)
NFTs In Web 3.0: Evolving Ownerships
For digital assets or any other asset represented by a non-fungible token, NFTs give a comprehensive history and proof of ownership. This feature allows you to create one-of-a-kind digital assets and items that anybody can buy or sell on an open market.
Today, NFTs have progressed to become more useful in a range of industries:
- Keys to digital communities
- Tradeable game assets
- Ownership of your username and assets in the metaverse
NFTs are laying the groundwork for digital communities, economies, and assets as the online world transitions from web 2.0 to web 3.0.
1. NFTs Are Keys To Online Communities And Events:
The usage of non-fungible tokens as “membership passes” to a digital community was one of the first evolutions in NFT use-cases. Ownership of NFT profile photo collections such as CryptoPunks and Bored Ape Yacht Club (BAYC) naturally became linchpins around which holders built communities.
Today, profile image NFT collections like Oni Ronin have expanded on this concept, allowing access to exclusive workshops and ceremonies, free NFT airdrops, and prize raffles for Oni Ronin NFT collectors.
NFTs have been utilized to provide exclusive access to in-person events as well as online groups and events.
Because NFTs give irrefutable proof of ownership on the blockchain, the technology is well suited to address major concerns in the event ticketing industry, such as forgery and digital theft.
2. Productive And Exchangeable Games Asset:
NFTs have proven to be useful in the gaming industry by allowing gamers to own in-game assets they have acquired. On the Harmony blockchain, projects like DeFi Kingdoms have NFT “heroes” that gamers can buy, trade, and rent out on an open market.
These NFTs are productive assets that may be sent on missions to earn in-game items and cryptocurrency for the player, in addition to offering ownership of the in-game asset. These things can be traded for cryptocurrency or used to make new items that will help heroes gain more power.
NFTs have been integrated into blockchain games such as DeFi Kingdoms, Axie Infinity, and Crabada, resulting in thriving in-game economies where NFTs are valued based on their traits and statistics, which determine how much cryptocurrency they earn. In these games, playing time is rewarded because levelling up NFT assets increases profits and increases the possibility of uncommon and valuable item drops.
3. Redefining Digital Identities And Assets:
Are you concerned that someone in the metaverse will take your username? Through the Ethereum Name Service (ENS), NFTs have already permitted ownership of custom “.eth” Ethereum wallet addresses, with over 671,000 unique “.eth” addresses registered thus far.
As a non-federal token, these custom addresses can be used in other decentralized services, making previously complex wallet addresses more personal and easier to remember.
ENS allows for considerably simpler wallet addresses like “visualcapitalist.eth” rather than a long string of digits and letters like “0x0079784df055a06EC5A76A90b24”.
Other initiatives, such as NFT.com, employ NFTs to give individuals bespoke ownership of a personal profile, such as “www.nft.com/yourname,” where they can display and share their NFTs on a decentralized social network.
Enabling NFTs In The Metaverse Economy
Non-fungible tokens, like usernames and wallet addresses, are becoming the underlying technology for assets in the metaverse. The Sandbox, a metaverse project, is already employing NFTs to represent digital land, virtual furniture and decor, and much more.
The Sandbox earned more than $24 million in sales of NFTs representing metaverse real estate in March 2022, with Atari, Snoop Dogg, and the South China Morning Post among the top businesses and celebrities to purchase plots of digital land.
NFTs have just recently begun to transform digital asset ownership and exchange, setting the groundwork for digital communities, tradeable in-game assets, and the metaverse economy.
Web 3.0, Blockchain, and Cryptocurrencies: What’s the Connection?
To assure the highest levels of security, privacy, and openness, Web 3.0 will be built on a decentralized architecture like blockchain.
The future web 3.0 will use encrypted links with decentralized applications, non-fungible tokens, and cryptocurrencies to easily automate, grow, integrate, and function across the Internet.
Governments will support transactions via NFTs and cryptocurrencies in order to move toward a decentralized economy, and peer-to-peer systems will flourish.
Even machine learning and artificial intelligence have progressed over time while delivering value. Despite the fact that web 2.0 was powerful, its successor offers similar capabilities with time-testing changes. Web 3.0 is designed to meet the internet’s demand for AI and accurate data, as well as to discern between legitimate and fraudulent data or transactions.