NFTs swept across the globe in 2021, sparking a digital revolution and becoming an asset classe with the year’s fastest growth rates. Close to 20,000% growth YoY. Non-fungible token technology got its popularity by allowing artists to offer digital originals without the use of middlemen and yet be paid royalties on subsequent sales of their work. NFTs ultimately provide a method for confirming the legitimacy of digital assets. However, NFTs have been attacked for allowing anyone to just “screenshot” a graphic and claim it as their own. It’s ironic because NFTs were created particularly to address this issue.
How? Utilizing a blockchain. An NFTs are connected to an immutable record when it is minted to the blockchain, confirming its legitimacy. It is possible for someone to mint a screenshot, but the screenshot’s record would not carry the same credentials as the original, indicating that it is not the real thing. This allows a buyer to identify a fake within a few minutes.
However, this use-case is only the start of the capabilities non-fungible tokens will offer to the developing Web 3.0 industry. Apart from being used for Digital Art sales, Non-fungible tokens are now being used as a form of digital infrastructure to create communities, provide instant authentication and even a method of crowdfunding. Most NFT projects are collections that provide the NFT holder unique benefits or “utility”. The better the NFT project fares, the higher the re-selling price of the NFT is going to be. This is how we see extremely high prices being attributed towards NFTs. There are metaverse NFTs, travel based NFTs, NFT certificates and many more disruptive products being developed.
Non-fungible tokens are replacing usernames and wallet addresses as the primary form of identification for assets in the metaverse. NFTs are already being used by The Sandbox’s metaverse project to represent virtual places, furniture, and a variety of other projects. This way, the inhabitants of this virtual world can for all intents and purposes, “own” their assets and do whatever they deem fit with their assets. This gives you control over your digital life.
The Sandbox generated more than $24 million in revenue in March 2022 from the sale of NFTs that represented real estate in the metaverse. Leading companies and well-known individuals from a variety of industries, including Atari, Snoop Dogg, and the South China Morning Post, all owned land in the metaverse.
The metaverse is expected to have a bigger impact on the web over the next ten years than social media had in the early 2000s. Metaverse’s users will also be its owners in the future. Most of our real-world experiences will be smoothly merged with virtual world experiences and there will be an increased need for internet security, privacy, and anonymity/pseudonymity, all tapped into by the metaverse.
Similar to social media platforms, the worth of a virtual world is ultimately defined by its ecosystem. For a virtual world’s community to flourish, trust is a crucial component. This is exactly what blockchain technology offers in spades. In addition, users (owners) of metaverse will have assets that they can – at their discretion, sell for a profit.
This is just the beginning of a long journey. Since the present administrators of the Web 2.0 world are transforming their industries to move towards a Web 3.0 future that puts the metaverse front and center, it is certain that this is more than a passing trend.
Despite the high levels of interest and funding, the underlying technology has matured to the point where it offers more than just promise. The metaverse is a reality that will elevate our digital experience, and it is still in its infancy. With the discovery of NFTs, the road map to where we are going has just begun.