The Metaverse will bring unbridled evolution to NFTs
Even though non-fungible token (NFT) transactions have taken off and made headlines, for most people outside of the crypto world, they are just a gimmick. The Metaverse will change that.
There is always a tipping point when new technologies go from an incomprehensible marginal interest to, all of a sudden, a part of life. This point usually stems from the confluence of a number of factors, and right now we are experiencing what happens when two of these trends together hit the inflection point.
Mark Zuckerberg’s decision to rename Facebook to Meta was enough to propel the Metaverse into headlines around the world, though the concept has been around for at least three decades. It is this apparent sudden emergence of the metaverse that provides the escape speed for the rehabilitation of the image of NFTs as a speculative crypto gadget.
Big brands, such as Morgan Stanley, are now predicting the future of NFTs, and the âdigital luxuryâ industry has predicted a metaverse valued at $ 50 billion by 2030. The Next Phase of the NFT Cycle has begun.
Related: Why are major global brands experimenting with NFTs in the metaverse?
More than virtual
The metaverse is generally thought of in terms of virtual and augmented reality, but it’s not that simple, even if VR / AR adds to the promised immersive experience. It’s also thought out in terms of games, like in Ready Player One, but it’s not limited to that either. However, both give clues as to what it will be.
Work on the metaverse has already looked at an “embodied Internet”, to quote Zuckerberg’s vision: a network of interconnected virtual experiences that mix the digital and the physical, offering new ways of working, playing, socializing. and create. Think of it as an extension of the work-from-home experience precipitated by COVID-19 – but now in a virtual 3D space, whether you access it through a headset or an ordinary 2D screen. Remote meetings shouldn’t mean a wall of talking heads; instead, you can share a virtual space with a group of avatars. This is important because having a real sense of presence allows for more nuanced and natural interactions.
Facebook, of course, saw this opportunity early on and has every reason to keep promoting it. Its Oculus Quest headsets – sold for much of 2020 – have provided a major boost to the virtual reality market, in large part thanks to their ease of use. The speed at which this device has gained traction underscores consumers’ new appetite for 3D experiences: Over the past 18 months, people seeking to escape lockdown isolation have creatively reused games as places. for social interaction, whether weddings at Animal Crossing or at work. meetings at Red Dead Redemption.
There’s no clearer indication of how the games lay the groundwork for what will soon be a much larger set of experiences. Epic Games, the studio behind behemoth Fortnite, which hosted a virtual gig for electronic band Marshmello a full year before the lockdown, is another player who has had their eye on the metaverse for some time. Epic CEO Tim Sweeney has bet the farm on the metaverse, offering services – including their Unreal Engine design tools – for free. The goal? To push development in the direction it wants to see – one with fewer obstacles, more interoperability, more data sharing. Less centralized; Less harmful.
Related: Facebook’s centralized metaverse, a threat to the decentralized ecosystem?
Metaphysics … with a blockchain hit to the side
There is certainly no underlying need for a decentralized structure, but it aligns with what many metaverse advocates see as the most desirable goal: what Sweeney describe like an âopen framework where everyone controls their own presence, without control. “
To create a proper metaverse, rather than a collection of separate 3D spaces, platforms need to be interoperable and transparent. Payments should be secure, frictionless, and instantaneous, and it should be possible to store and use created assets (like your custom avatar) wherever you are in the metaverse. Until recently, to participate in the digital world, you had to leave a breadcrumb trail that allowed gatekeepers (game makers, etc.) to recognize you. Blockchain, when used by individuals to track their accounts, assets, and transactions, adds rich potential for users to choose how they behave, what they own, and what they decide to trade.
Blockchain is one of the âmain catalystsâ of the metaverse, according to venture capitalist and influential metaverse commentator Matthew Ball. Another crucial element in his definition of the metaverse is an âindividual sense of presence andâ¦ continuity of dataâ. The more you âliveâ online, the more important your individual âskinâ will be. Even the most basic pixel art can become strongly associated with individual identity, as shown by the passion for CryptoPunks; owners often say they feel strongly connected to their punk.
Indeed, NFTs increasingly make it possible to express individuality online, whether through randomly generated or carefully designed features. The virtual clothes and accessories that users choose in the metaverse will help make the online identity feel true to each person and deepen their engagement. Fashion and art are a vital part of self-expression in the physical world; why should the online world be any different?
As mentioned earlier, digital fashion is booming and offers a new growth opportunity in NFTs. Design houses and celebrities sell skins, outfits, hairstyles, and pets like NFT; âdropping NFTsâ is as hot as dropping an unexpected album. In fact, musicians and athletes are embracing the possibilities of earning royalties when NFT assets are sold, in the hope that they will be able to create a new system of property rights, unhampered by the practices of legacy brokers. .
Related: Haute Couture goes to NFT: Digitalization at Paris Fashion Week
As digital property rights become legitimized and blockchains become more secure, NFTs can become more serious currency exchange. Imagine a group negotiating with Disney for the rights to use their characters, for example. Does that sound far-fetched? Sotheby’s recently saw a DAO (comprising 17,000 donors) push the auction for a rare copy of the US Constitution to over $ 43 million. While they didn’t win this time around, it’s clear that shared ownership facilitated by the NFT is fast becoming a real economic force.
Financing the future
What does all this mean for capitalism, innovation and creativity? For business models and our experience?
The range of revenue sources available on the Metaverse, from games and box office to software subscriptions to healthcare, has the potential to shift the technological paradigm away from advertising and big data, with all the privacy nightmares and security they brought. It is certainly not a given, but it is at least a possibility.
The more open and accessible the platforms, the stronger this narrative becomes. Interconnection platforms attract more users; second, transparent and interoperable payment and asset mechanisms increase their incentive to design and trade – circulating income throughout the system and increasing the potential for a parallel economic order.
Big game companies are already making their metaverse development tools widely available with the explicit aim of encouraging interoperability and thus wider adoption. These companies believe that an open metaverse is best for business. This will certainly be the best way to create a thriving online economy – one in which users are motivated to participate and create value, which will benefit platform developers as well as user creators.
It’s just possible that, for once, technological, philosophical, and economic cases are all pointing in the same direction: towards a distributed metaverse, using the capabilities of blockchain technology, in which online citizens can finally escape the walled gardens of the world. Web 2.0 and reap the benefits of their contributions. In this exciting new world, NFTs will bridge the gap between the real and the virtual. From identity to business, tangible ownership will make all the difference. It’s a whole new level of reality.
This article does not contain any investment advice or recommendations. Every investment and trading move comes with risk, and readers should do their own research before making a decision.
The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Stephanie So is an economist, political analyst and co-founder of Geeq, a blockchain security company. Throughout her career, she has applied technology in her specialist disciplines. In 2001, she pioneered machine learning on social science data at the National Center for Supercomputing Applications. Most recently, she has studied the use of distributed networking processes in healthcare and patient safety in her role as Senior Lecturer at Vanderbilt University. Stephanie is a graduate of Princeton University and the University of Rochester.