To give us a better understanding of what the Metaverse and NFTs entail, we’ve asked our tech expert Ola Lind, to articulate to our readers what exactly is the relationship between them both.
Reflecting today’s investors’ increased interest in the nonfungible token (NFT) sector, a new study projects that the present $3 billion market size will reach $13.6 billion by 2027. According to MarketsandMarkets, several factors will contribute to the explosive growth of the NFT market. These include its increasing use cases. Accessing the Metaverse has been identified as one of the growing use cases.
With the increase in the application of NFTs in the Metaverse, people wonder about the relationship between both. Since NFTs are often linked with websites and connections that occur via web browsers, and because the Metaverse is mostly virtual reality (VR)-based, there may be some uncertainty over their common ground or the role NFTs play in the Metaverse.
NFTs and the Metaverse defined
An NFT is a unique, encoded digital asset representing real-world items such as art, music, in-game products, and videos. They indicate ownership and originality and are predominantly issued through the Ethereum blockchain.
The Metaverse is a digital environment that allows people to connect virtually by combining social networking, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrency. Augmented reality enhances the user experience by superimposing visual components, music, and other sensory input onto environments. As the Metaverse expands, it is expected to provide online worlds where user interactions are more multifaceted than present technology allows.
Is NFT a component of the Metaverse?
Most metaverse-related conversations focus on the possibility of combining the Metaverse with NFTs. In addition, many individuals believe that NFTs are another component of the larger Metaverse.
Apart from being both web and VR-based, the fundamental reason for these assumptions could also be the quick emergence of NFTs in the blockchain gaming industry. It is logical to assume that only virtual worlds will influence the Metaverse.
Furthermore, linking actual identities with digital avatars provides the potential for defining metaverse access through NFTs. In 2019, the first instance of NFT-controlled access manifested the Metaverse NFT token for the first time. 2019’s first NFT.NYC conference used an NFT-based ticket for an event entrance. Even if no one could refer to the meeting as the “metaverse”, it established a positive precedent for the NFTs-metaverse interaction.
Metaverse applications of NFT
Recent years have seen the emergence of several new initiatives aimed at the convergence of NFTs and the Metaverse. Some of the NFT use cases in the Metaverse covers NFT controlled access assistance in securing exclusive access to real-world and Metaverse events.
The new trends for real estate are another initiative with the use of NFTs to gain complete ownership of virtual spaces in the Metaverse. Using blockchain technology, users can demonstrate ownership. An example is Decentraland, a 3-D virtual territory where land portions can be bought and sold using nonfungible tokens.
NFTs also play a role in the Metaverse in the virtual marketplace. There is no doubt that VR communication spaces may also serve as a healthy trading environment for nonfungible tokens since these areas are already thriving. Sellers can give links and previews to web-based assets or create assets right inside the virtual reality environment.
Furthermore, several museums are presently incorporating NFT artwork in the Metaverse in the form of art galleries powered by mostly the Ethereum blockchain.
Whether NFTs are a part of the Metaverse or not, it is obvious they play a significant role in the Metaverse.