The Role of NFTs in the Emerging Metaverse Economy By DailyCoin

Since its inception almost a decade ago, people have often peddled the misconception that NFTs are mere photographs of either tangible or intangible artwork, or even digital copies of collectibles that sell for large sums of money.

Interestingly, this seeming ignorance of this sect of the public isn’t entirely their fault, as it is the most visible side of NFTs that receive publicity. However, with the chaos surrounding digital art in recent times, it has become evident that NFTs open up many new possibilities and areas to explore.

One example of this would be the fact that their connection with the metaverse has a major role to play in the future of NFTs. The path to this future offers many new possibilities and opportunities for companies, investors, and enterprises alike who will play a significant role in shaping the adoption and usage of NFTs in the long run.

That said, accessing the metaverse in the first place has recently become one of the most significant uses of NFTs. For those who understand the NFT-metaverse relationship, you’ll realize this is a big deal in the blockchain space.

Will NFTs help in accessing the metaverse? Do they hold value for defining how the metaverse will look in the future? What role do they serve in the grand scheme of the metaverse economy? Let’s take a close examination of how crucial NFTs are in the development of the metaverse.

Blockchain and NFTs

With the fourth industrial revolution now underway, blockchain happens to be one of the major spheres of technological interventions to have debuted in recent times.

Blockchain’s popularity has grown unimaginably quickly, and this can be attributed to the vital role it has played in resolving the problems of double-spending associated with most cryptocurrencies, and, in this context, in serving as a building block for the mainnet.

With the aforementioned in mind, blockchain was thereby used to facilitate the existence of NFTs, or non-fungible tokens, which introduced the characteristics of interoperability and scarcity.

However, mainstream adoption, the increasing demand for NFT-metaverse projects, and the growing interest in the emerging industry, has necessitated further research into the potential role of NFTs and blockchain in the metaverse.

Understanding NFTs and the Metaverse

In order to understand the role of NFTs in the rapidly-evolving metaverse space, you must consider: “What are NFTs and the metaverse?”.

Non-fungible tokens, or NFTs, are a new type of digital asset that are one-of-a-kind, indivisible, and immutable. They aid in the representation of digital and physical asset ownership on the blockchain. If you find yourself confused as to what exactly this means, then we recommend reading our beginners’ guide on how to kickstart your journey into NFT space, found here.

To continue, NFTs are having a major impact across all sectors; from digital artwork to marketing, and even to disrupting the traditional gaming industry.

However, before the importance of NFTs to the metaverse can be considered, it is pertinent to first examine what the hype around the metaverse is all about. The metaverse can be thought of as a blockchain-based digital world with visual components provided by technologies like virtual reality (VR), augmented reality (AR), and artificial intelligence (AI), to mention a few.

As mentioned previously, blockchain’s decentralized nature opens the door to limitless economic potential and social interaction. As such, by leveraging the capabilities of blockchain, the metaverse essentially provides digital environments that are exceptionally malleable, adaptable, scalable, and interoperable.

More importantly, the metaverse combines breakthrough technology with the participant engagement models from both individual and corporate perspectives. Corporate parties can then use this data to better understand what to market and how to set up shop within the metaverse.

Are NFTs a Component of the Metaverse?

Almost every discussion of the metaverse revolves around the potential to combine the metaverse and NFTs. Many people, on the other hand, believe that NFTs are merely another part of the larger metaverse. Indeed, “NFTs” and “metaverse” are often used interchangeably.

The fundamental rationale for such beliefs is that NFTs in the blockchain gaming industry have experienced unprecedented levels of growth. It’s therefore reasonable to assume that only virtual worlds will be able to influence the metaverse. Interoperable games can thus help to propel the metaverse forward by serving as virtual environments.

Furthermore, the ability to link one’s real-life identity with a digital avatar opens up a world of possibilities that enable NFTs to define access to the metaverse. With the instance of NFT-controlled access in 2019, the metaverse NFT token made its first appearance when the first ‘NFT.NYC’ conference employed an NFT-based ticket system to admit attendees. Even if no one could realistically call the conference a “metaverse,” it created a positive precedent for NFT metaverse interaction going forward.

Will NFTs Help to Create the Metaverse?

The metaverse is a vague, adaptable concept, and NFTs can play an important role in its overall ecosystem. The possibility of employing NFTs to serve as deeds to virtual property would be driven by NFT metaverse projects. NFTs could be used to acquire exclusive access to a metaverse area, while also granting others access.

Surprisingly, NFT smart contract capabilities could be useful for selling real estate in the metaverse. In the early phases of metaverse development, NFT-controlled access has been the most common use case. NFT-controlled access, like the first-ever real-world application of NFTs in the metaverse, might help to ensure VIP access to real-life and virtual events alike.

NFTs might also be convenient for airdropping branded items, or granting followers unique access rights. Likewise, they might provide interoperability outside of the metaverse, with infrastructure that supports features like location-based interactions and augmented reality, in addition to increasing efficiency in fan engagement.

These possibilities combined make it evident that the metaverse and NFTs are meant to be together. Many companies are starting to realize this and are pouring resources into creating their own NFTs and working on unique experiences that will bring customers to their digital doorsteps. An example of this? Real estate.

The Impact of NFTs on the Metaverse

It’s critical to understand the role of NFTs in influencing the metaverse’s fundamental design. You’ve probably noticed that NFTs have the potential to disrupt the metaverse’s traditional social network patterns of user engagement, transaction, and socializing. So, how would these aspects play out in the metaverse as a whole? Here are a few examples of how metaverse NFT interactions could look in the future.