NFT 101: How Will NFTs Promote the Overall Growth of the Metaverse?

2021/06/21 14:43:08

Non Fungible Tokens (NFTs) are at the forefront of the public’s attention in the blockchain sector in recent months. Although NFTs have been around for a long time, their popularity has only picked up recently, after numerous NFTs were sold for several million dollars.

NFTs provide authenticity for digital collectibles because they track ownership and allow artists to earn from them. Looking at the name itself, the word token implies that it is a product based on blockchain, while non-fungible means that the token has unique features that cannot be swapped with anything else.

Currently, NFTs have become very popular in the art sector. Collectibles have a high chance of losing value because they can be duplicated. However, with NFTs, artists now have a secure way of valuing their work. An NFT creates a digital certificate that verifies authenticity and ownership. The collectible can be transferred to others, and anyone on the blockchain network can see ownership details.

However, NFTs are slowly being adopted in other areas besides art. They are now seen as a product that can change the future in terms of virtual reality.

NFTs and the Metaverse

The hype surrounding NFTs started with the Beeple digital artwork that was sold for a whopping $69.3 million. The growing popularity of NFTs has demonstrated that the product can play a great role in shaping the future. One of these ways is to develop the metaverse.

(Source: https://beeple.artstation.com/projects/YeBdqd)

A metaverse is a parallel digital universe that offers unique experiences to its users. It is a virtual world that users can access through a smartphone, computer, or a virtual reality headset. The metaverse is enabled and influenced by a community of crypto users.

One of the main applications that currently shape the metaverse is real estate. Digital real estate enables people to create and develop virtual land, on which they can construct anything they want. In 2017, Decentraland launched a platform that allows users to purchase pieces of virtual land and have control over the pieces to do with as they wish.

The price of virtual land on the metaverse is starting to compete with the prices of physical real estate. One of the factors making the metaverse so appealing to traders is that it allows anyone to develop, purchase and view NFT art while creating engagements.

In February this year, a piece of virtual land on Axie Infinity blockchain was sold for $1.5 million worth of ether. Most recently, a buyer bought a digital house worth around $500,000. The figures show that virtual real estate is as competitive as the actual real estate sector.

Will the Metaverse NFT Bubble Burst - And is it a Bubble at All?

The metaverse world has just started to gain momentum, which indicates both great potential growth and current flaws in the sector. However, the progress that has been recorded so far shows that it is an area with great potential. The technological advancements that have taken place in virtual reality and augmented reality are also expected to contribute to the growth of the metaverse.

One of the abundantly clear things is that the metaverse will transform the social, economic, and cultural sectors. The project creates an ideal opportunity for those who want to diversify their earnings and investments in the crypto sector.

The groundwork for metaverse NFTs have already been set, and all that is left is polishing and adoption. With the platform giving power back to the creative, it boosts innovations that have been attracting several celebrities and influencers, with more now jumping on the bandwagon. Promotion from these users will cause the popularity of metaverse NFTs to soar.

However, as much as the NFT craze shows great signs of success and creates the perfect opportunity for investors, it does not mean that it is not risky. To begin with, the entire crypto market is highly unregulated, which means that there is a high potential of the metaverse losing its glory as soon as it has gained it. Governments have been enforcing regulations to protect investors in the virtual real estate sector. These regulations will cause a stir in the market, and early investors into the metaverse may not know where they stand if that happens.

However, this does not mean that investors with a risk appetite should not get involved and become among the first people to tap into the potential of this sector if it ever achieves its growth objectives. Multiple institutions have already been exploring the potential of metaverse NFTs to discover exactly how this net technology can change their operations.

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