Digital natives have seen the potential and opportunities for non-fungible tokens, and NFTs, and there are numerous predictions on the future of these online collectibles. Proponents can foresee numerous transformations thanks to the NFTs. However, what are their main functions in the metaverse economy?
What are NFTs?
NFTs have been around since 2015 and with the current developments in the metaverse industry, the future of NFTs seems bright. Investors, businesses, and entrepreneurs now have a vision of the availability of vast opportunities to take up. However, what are NFTs?
These are assets on a blockchain and they each have unique codes to identify and distinguish them. Since they are blockchain-based, they help get rid of the need for intermediaries to connect artists or creators with the audience. Furthermore, the transactions are simpler and there are opportunities for creating new markets.
Unlike cryptocurrencies which are fungible tokens, NFTs cannot be traded and lack exchange equivalency. Moreover, fungible tokens are identical to each other, but the NFTs differ from one another.
Also, they can be a representation of real-world items such as real estate and artwork. They also include collectibles like digital artwork. When you own NFTs, you have reduced chances of fraud since the virtual transaction is on a safe, secure, and decentralized system.
Read: Bitcoin vs. NFTs
The Metaverse Economy
When you previously heard of NFTs what came to mind? Did you instantly think of digital artwork and collectibles? Thankfully, this is not all. Their seamless connection with the metaverse economy reshapes their application. Also, the chances of growing adoption among investors keep soaring. Nonetheless, with the metaverse economy, we can look forward to a more open economy.
The following are some of the greatest functions of NFTs;
- Welcoming the Next Gaming Frontier
The gaming industry is a major part of the entertainment sector, with an increasing number of individuals spending time on gaming sites compared to going to movie theatres, concerts, and parks. Unlike traditional gaming, the industry has embraced virtual reality, VR, to enhance user experience. With this introduction, there has been a shift in how consumers enjoy the services and the convenience they bring. With a standalone application, the gamer can use his smartphone, VR headset, laptop, or even a computer.
The metaverse economy, on the other hand, is unifying the space, making it possible for players to interact with one another as they play through human-computer interaction, (HCI). NFTs are bringing in solutions to various concepts of gaming; from social gaming to portable game assets, and play-to-earn. Notably, play-to-earn uses NFTs as the in-game currency, where one earns more depending on the value added to the game.
In traditional gaming, it was common for centralized game operators to control the players’ earnings. However, in the new gaming industry, things are different. Thanks to NFTs, players are full owners of their assets.
- Ushering in New Social Experiences
Different people enjoy doing different things. Thankfully, if you have a hobby and would like to explore it further, you can purchase NFTs. This will help in building a community and much more pleasurable social experiences. How? Individuals who own similar NFT assets will come together, collaborate, and share their experiences.
Moreover, NFTs can help one build an identity. For instance, VR gaming has familiarized consumers with 3D avatars which allow the player to explore the identity of their imagination. Therefore, in this metaverse, you don’t represent your actual self, but enjoy the experience of assuming a new identity. NFTs thus allow one to build a virtual persona, which he has total ownership and control over.
- Bridging the Gap Between Physical and Digital Worlds
It’s great news to know that you can enjoy the virtual social experience of the metaverse model brought by NFTs in a physical world too when it is transitioned offline. To help consumers enjoy both the physical and digital world, brands and businesses are creatively connecting virtual marketplaces with physical reality. What a great way of bridging that gap, as they offer consumers what they want.
- Bringing in a New Wave of the Creator Economy
The creator economy is one of the oldest in history and with digital advancement, his term has continued to grow. It involves artists, content creators, writers, curators, and community builders among others. NFTs are represented as digital assets and creators can take advantage of this.
NFTs and a decentralized blockchain allow the creators to have exclusive value to their assets, and no one can replicate their features or steal them. The technology embeds a code on each asset and it can have additional rights allowing the creator to earn a percentage of any transaction on the digital asset. Therefore, thanks to NFTs, creators can enhance their ownership and IP rights.
The metaverse economy thus offers a virtual world to the creator economy, where creators can have value in their content, thanks to a safe, secure, transparent, and decentralized system.
Read More: 6 Ways to Get Free Crypto in 2022
- Virtually Building Real Estate Market
The real estate space is one of the major income earners. Unlike the traditional way of doing real estate physically, the metaverse economy is building a new market, where there are parcels of virtual property. Therefore, an investor can have an asset of virtual land and sell it for millions of dollars in a metaverse.
One of the issues arising from digital assets in the crypto space is the concept of digital scarcity. The space available for the digital real estate market is limited. However, this is to ensure the value of the metaverse economy is maintained. It is, therefore, not a surprise to see the increasing growth in the value of virtual land, which also brings in another issue. There is a lack of interest rate increases to curb this continued increase in prices.
NFTs are bringing a lot of revolution to the internet. Also, investors and businesses have a chance to take up new opportunities, and venture into new markets, thanks to these assets. The metaverse economy is bringing great value to both creators and consumers. Also, other major functions of NFTs in the economy include a better social experience for the customers, bridging the gap between the real and physical world, and bringing a new edge to the gaming industry. Therefore, owning NFTs has endless possibilities.
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