The metaverse is essentially a digital environment that operates on blockchain technology. Virtual Reality and Augmented Reality collectively form the visual components of the metaverse, where the blockchain creates the decentralized medium that allows for unrestricted business opportunities and social interactions.
Similar to the internet connecting various websites on a single platform, the metaverse connects multiple virtual spaces and users worldwide. The idea of a metaverse originally existed exclusively in science fiction novels but has become a reality that is continuously expanding in its applications.
Metaverse technology is versatile, interoperable, and scalable. It provides a platform where innovative technology and interactions between participants and enterprises are encouraged.
The metaverse universe incorporates numerous elements such as finances, communications, NFTs, personal profiles, and gaming worlds. It serves as an alternative reality where users can buy and sell goods and services, obtain virtual real estate, join communities, and create virtual identities. The versatility of the metaverse creates opportunities for the monetization of digital and real-world assets.
Eventually, the metaverse will be a combination of economics, decentralized governance, and digital identities.
Non-fungible tokens are simply tokens that cannot be replaced by something similar. These tokens are not interchangeable but are distinguishable from other tokens. NFTs create digital scarcity, and they do not need any centralized authority to authenticate them to confirm their value.
An NFT is a virtual token that you can create to prove the ownership and authenticity of a rare asset.
For example, if you purchase a virtual artwork, you can create an NFT that tokenizes your art. This NFT will be immutable and indivisible, representing your ownership of art that is equally unique. You can store this distinct NFT on the blockchain.
We understand the metaverse to be a virtual world that will most likely resemble the physical world very closely very soon. We will shop, drive around, meet up with friends, and interact very realistically in this virtual environment. The advancements in virtual reality technology will see to it that the metaverse will be almost indistinguishable from the world we live in.
Innovative gaming models have familiarized us with the concept of a metaverse for decades, but we will soon enter an era of revolution where we will frequent virtual spaces and be capable of things that were merely ideas a couple of years ago.
Many current metaverses such as Decentraland and Somnium already exhibit the dynamics of a virtual society. In these spaces, participants can establish land ownership, exchange goods, and services, assert ownership rights and interact socially. These factors give rise to a virtual economy where digital properties are perceived as equally authentic as physical properties.
For a virtual economy to flourish, there needs to be a record of digital ownership to authenticate possessions and even virtual identities that can be stored in the blockchain. This is where non-fungible tokens come in. NFTs are secured by a cryptographic key that cannot be canceled or replicated, appropriating them to verify virtual identities and possessions. NFTs are essential for the success of interactions between metaverse societies.
Although NFTs originally served a purpose in the digital art industry, their significance lies in their ability to enable the development of genuinely human societies where goods and services are freely traded and ownership and social contracts are secured.
The applications of NFTs are incredible as these tokens will represent any type of virtual asset in the metaverse.
The key to establishing a functioning economy in a decentralized environment is to encourage the transfer of real-world assets into the metaverse. One way to encourage porting is by utilizing gaming models with interoperable blockchain games.
The play-to-earn concept is especially valuable as it keeps players of blockchain games engaged and empowered. NFTs are fundamental in allowing players to participate in the financial economy of the metaverse, where they get rewarded for their contribution. With a play-to-earn model, players receive full ownership of their assets without the involvement of an external entity.
The demand and popularity of play-to-earn gaming models are on the rise as gaming guilds are advancing this technology. Guilds give players an opportunity to enter the world of play-to-earn gaming by gathering in-game NFT assets and lending them to users who lack the capital to purchase these assets themselves. Guilds hereby act as facilitating intermediaries and take a minor portion of the player's earnings.
Gaming guilds promote equality and fairness in gaming environments by lowering the barrier to getting involved in play-to-earn games. Guilds make it possible for anyone to participate in the metaverse economy by making NFTs more accessible.
The law of supply and demand based on rarity governs the value of NFTs, which removes the possibility of artificial value inflation. If you combine this quality with the transparency and immutability of the blockchain, a metaverse can be the most open economy we've ever developed.
NFTs will have a significant impact on identity and community in the metaverse. Communities in the real world unite because of shared interests or circumstances. The same trends will be followed in the metaverse as like-minded individuals holding particular NFT assets will assemble as a community to share experiences and create new content. The NFTs one holds indicate to others the projects and perspectives one supports. NFT avatars are becoming a popular trend and are an appropriate example of how communities form based on their virtual assets.
A player's NFT avatar is either a representation of their real identities or their imagined selves. NFT avatars act as asset tokens that players can use to move between locations within the metaverse.
NFT avatars allow players access to exclusive experiences and locations in the metaverse and the physical world. Being an owner of an NFT avatar elevates your social and community affairs in the metaverse.
The Bored Ape Yacht Club is a spirited example of how identity-shaping avatars can enhance your virtual experience. Players who hold these avatars are given access to exclusive events where only a selected few can attend, assuming they possess the appropriate NFT avatars.
There are no limits to the amount of space that can be utilized in a virtual world. With that comes a substantial amount of real estate. When you own NFTs, you can gain ownership of virtual spaces, and the proof of your ownership is safeguarded on the blockchain.
Much like in the physical world, you can sell virtual real estate in an NFT metaverse for a profit. Users can develop property and retail structures and generate a passive income by renting their land.
Decentraland clearly illustrates the role that real estate can play in an NFT metaverse. One of their most recent events was a virtual fashion exhibition that included a collaboration with Adidas. They showcased the auction of designs as NFTs. The possibilities for growth are endless, and the popularity of owning virtual real estate will soon become inevitable.
Decentraland was one of the first virtual worlds to demonstrate how realistic a metaverse can be. When you explore this virtual space, you'll see people talking on benches, shopping in boutiques, jogging, and generally enjoying the mediocre activities prevalent in the physical world.
These interactions are the result of developed real estate. People buy land and create environments where participants can socialize and participate in various activities.
Although the creators of Decentraland state that this virtual world is still in its infancy, it is clear that nothing will stop it from being revolutionary. Similar to the physical world, the popularity of virtual land naturally drives up its value.
Another factor contributing to the economy's success in Decentraland is the fact that the land is all in proximity to one another within a limited geographic area. The scarcity of property causes a relationship of supply and demand to arise. The value of the property will rise and fall according to this relationship.
This economy can only remain secure and stable with the inclusion of NFTs. This is because NFTs allow the transactions of the properties as they are undeniable proof of ownership with security that far surpasses that of an ordinary land deed.
NFTs and smart contracts are defined to make it impossible to fake metaverse property rights.
Although companies initially controlled virtual worlds, NFT metaverses today are decentralized as many or all of their components are built on blockchain technology. Blockchain metaverses diverge from mainstream business models and more closely resemble models of the gaming industry. The structure of the blockchain opens the door to impartial engagement opportunities. The participants of the metaverse are, in a way, the rightful owners as they have a hand in all the activities and developments that the metaverse undergoes.
Many metaverses make use of governance tokens and decentralized autonomous organizations. The users are hereby in control of the game's future by voting on updates and changes. The metaverse grows entire societies and economies with democratic leadership.
Assets in the metaverse are represented by NFTs, which can grow substantially in value. The unique nature of NFTs makes it possible to code items and tokens to prove the provenance of NFT gaming assets and user-generated content.
NFT metaverses are based on blockchain technology, so the economies generated on the blockchain are directly connected to real-world assets. Users who hold certain assets in the virtual space can trade these assets on NFT marketplaces, commanding real-world value for metaverse assets.