With the new year dawning on a new era of the Metaverse, there is a flurry of new words being added to the dictionaries- loudest amongst them all, “NFTs”. However, to understand why metaverse NFT is grabbing headlines over even the most exciting tech developments, it’s important to know what they are, and what their role in the metaverse is – and what it could be.
What are NFTs?
Now declared “Word of the Year” by Collins Dictionary, Non-Fungible Tokens, or NFTs, are certificates that declare ownership of specific digital ‘items’, such as videos, memes, images, etc. NFTs cover anything digital – but the majority of the hype behind them is specifically for the art.
The most popular case of art in NFTs was created by Mike Winkelmann, better known by his alias “Beeple”. Beeple sold one of his pieces at the historic price of 69 million US dollars at Christie’s- skyrocketing him to the top three most valuable living artists. This is night and day from the start of his career where even until October of 2021 the most his art had ever sold for was a print for 100 dollars. Thus, legitimised and secured with blockchain, NFTs have become a unique new means of art ownership, sale, and for some, given the immense value they have the potential to hold, even investments.
The Metaverse Synergy
The metaverse has existed for much longer than Facebook’s recent switch to Meta. Spanning across gaming and sci-fi from yesteryear, the metaverse is the all-encompassing interactive space that is composed of and exists solely within the virtual realm. Here, users can interact with one another and also with their computer-generated environments – to shop, create, socialize, learn, and play– and now, uniquely, with NFTs, we introduce a solely digital token of ownership into that space, forging a new economy of ownership within the virtual world, in a way that could potentially and permanently evolve the way we interact within the metaverse.
This impact can be measured right from the beginning- not only will it further engage existing users and participants but it will also incentivise non-users to hop on the bandwagon, and facilitate identity, community, and social experiences in the metaverse. A unique use case of this thought is in the creation of Avatars as NFTs, unique to the user across the metaverse- an expression of anonymity, chosen identity, art, ownership, and social participation all conveyed through not only a unique, fast-evolving world but a unique, unduplicable asset within it.
Individual users claim ‘decentralisation’ being of high appeal in the metaverse, which entails putting high-value assets into a comparatively ‘democratic’ blockchain environment where users have greater control and ownership of their distribution. Specifically for newcomers and longtime netizens and creators, the power to retain ownership of their own original artwork while also preserving their value as sellable assets can transform their businesses and the scope for any digitally based artists who often find work plagiarised and uncredited, diminishing their value.
This logic and benefit can be applied to art in any form – merchandise for musicians, irreplicable designs, photography, etc can all be empowered by this seal of ownership and non-fungibility. This protection can also be extended to physical products, as it allows IP owners to sell and enforce licensed uses of their IP in virtual spaces. An NFT is just one way to identify and protect virtual ownership, with many others – and likely the eventual standard – still to be developed.
NFT Merchandising
The value of these tokens is not lost on brands and marketers either – even to major non-tech players, such as global fashion and sportswear brand Adidas. NFTs have proven to be a fascinating space to create and experiment in. Even Taco Bell managed to deal their hand and generate tens of thousands of dollars of ‘taco art’. Collaborative brands created NFTs in the likeness of Marilyn Monroe. And family card game UNO created collectable NFT decks of cards, uniquely illustrated.
Most notable, “Decentraland”, which is an open-source 3D virtual world platform, allows users to purchase virtual “plots of land” as NFTs, some selling for millions, even to create explorable virtual shopping spaces for brands to be able to sell their own products. They have even elected to host an entirely virtual recreation of the globally recognized Times Square, just in time for New Year’s eve 2021. As per real-life tradition, an hour before New Year, this virtual Times Square will host an entirely digital ball to celebrate the new year- a monumental event, marking possibly the first time that a cultural celebration has been translated to a digital space for all to share.
Much more than a bubble
Taking a long term perspective into account; the audience for these creations is vast and expanding every single day. The video game industry is larger than the sports and film industries combined- and the daily users of the internet and social media as a whole sum up to an incredibly large number, all of whom are relatively young (in their teens or mid-twenties), tech-savvy, and well versed in the nuances of web communities.
The combination of these two factors lends a highly positive outlook for the coming future of NFTs. As these young guns garner greater interest in investments, and the purchasing power to empower it, this evolving economy of the metaverse fosters a community of active, profitable participants in a thriving virtual marketplace. As value carriers in this space, NFT-based augmented experiences will shift closer to mass interest as a key factor for next-gen social networks as they arise.
Whether viewed from the lens of community, profitability, art, or a new virtual universe, the Metaverse is growing steadily into a never-before-seen landscape for people and businesses alike. NFTs, often called the Key to access the Metaverse, are proving to be an irreplaceable means of ownership within that environment, and mark a unique evolution of creativity and technology.
