The metaverse and NFTs are rapidly growing in popularity in the Web3 space. Considering they are both in the same technological realm, I decided to find out what role NFTs play within the metaverse.
An NFT’s role in the metaverse is to provide proof of ownership. All digital assets in the metaverse including products, services, and land are in the form of NFTs. Without NFTs, there would be no way to prove who owns a digital asset.
If you are curious to know more about how NFTs are utilized in the metaverse, this article is for you.
What is the role of NFTs in the metaverse?
Although NFTs serve one main purpose in the metaverse, there are still numerous aspects that need to be explored to fully comprehend their role. In the most simple terms, NFTs exist to prove ownership of digital assets.
We could end the article right there, but, that wouldn’t be any fun. So, let’s continue.
If you don’t know what an NFT is, then you should check out this beginner’s guide before reading onward. If you have a basic understanding, that should suffice. Just in case you forgot or are pressed for time, I will briefly go over what an NFT is.
An NFT is a one-of-a-kind digital representation of both digital and physical assets or services that are verifiable on a digital public ledger called the blockchain. To be clear, the blockchain is not the internet. It’s an immutable public record of transactions, meaning it can’t be changed.
The blockchain reveals every single transaction of an NFT from the time it is minted (created), to the present time. That means you can see when it was created, who created it, who has owned it, who currently owns it, and how much it has been traded for each time.
Before NFTs and blockchain technology, there was no sure way to prove ownership of something online, let alone a digital asset. Now, there is.
With that being said, you can see how NFTs will continue to play a large role in the development of the entire metaverse economy. In the real world, we have paper contracts and legal agreements that prove ownership. These documents are simply a mutual agreement, and generally require an intermediary to act as the authenticator.
However, when it comes to NFTs, the smart contract acts as the intermediary, and the blockchain stands as a proof of record of the transaction. Are you starting to see how NFTs are required in the metaverse?
How are NFTs used in the metaverse?
Now that you know NFTs exist to prove ownership in the metaverse, let’s explore the different ways that NFTs are used in the metaverse.
Virtual real estate
Although the metaverse is a new technological platform that is still in its’ infancy, it’s fair to say that it is basically a virtual extension of the real world. Of course, there are some key differences, but there are also some extreme similarities.
Real estate is one of these similarities. Just like we need land and structures to operate in the real world, we also require them in a virtual world. Virtual real estate is used to host events, build businesses, and meet with others in an immersive and virtual environment.
So, how do NFTs play a role in virtual real estate? It’s simple, NFTs are real estate. Not only do NFTs act as the legal agreement of ownership, but they literally make up the land and structures within the metaverse. The only way to buy, sell, and create land in the metaverse involves minting an NFT that represents the real estate.
Virtual marketplaces
Areas for conversation in the metaverse are already prospering thanks to applications like VRChat, and it is not crazy to believe that various virtual marketplaces will also serve as a fruitful trading field for NFTs.
Sellers can simply provide links to previews to web materials or mint assets immediately in the VR marketplace. Nike is a good example of how VR and NFT markets can appeal to numerous businesses from diverse sectors. It’s already dabbling in the metaverse with its own virtual Nikeland, and it’s recently purchased a studio (RTFKT) recognized for creating NFTs of items.
Avatars
As if the thought of NFTs representing virtual real estate isn’t bizarre enough, NFTs can also be used as an avatar birth certificate. That’s right, just like humans are documented the moment they’re born, so can avatars the moment they are created in the metaverse.
Not all metaverses require that you create an avatar as an NFT, but, I could see that changing as time goes on. Similar to how we attempt to track every single human born on Earth, I don’t see why we wouldn’t at least try to track every avatar created in the metaverse. It would sure be a lot easier.
Since NFT avatars aren’t a requirement or even standard practice in the metaverse yet, this is simply a guess. Currently, to create an avatar in some of the most popular metaverses you can create a guest account, or, sign in using your Web3 wallet.
It makes sense that your wallet is all you need to sign in to be a contributing member to the metaverse economy because that is where all your NFTs and crypto are stored. But, it might make sense to create avatar NFTs as a way to monetize being a member of certain metaverse worlds. Only time will tell how this will play out.
Play to earn gaming
The metaverse is set to be a massive virtual network of gamified fun. Except in the metaverse, you can actually earn real money and NFTs when you play these games.
The use of NFTs in metaverse games means you can be the sole owner of in-game items, and then choose to trade, sell or hold them. The idea that metaverse users can earn money from a game is not new, but NFTs act as the only way to prove ownership of these items and also trade them with others.
Parties and access
When you attend some sort of party or conference in the real world you generally have to have a ticket or something similar showing that you are allowed entry into the event. In the metaverse, this would be difficult to require if it weren’t for NFTs.
NFTs act as your ticket to enter exclusive shows, conferences, and any other virtual event that might require people to pay in order to gain access.
Overall, these are just some of the main ways that I have seen NFTs play a role in the metaverse and will continue to be used in the space. With that, NFT’s main role will always be to prove ownership in a true and transparent way, especially in a virtual world.
