What Is An NFT?

These are non fungible tokens — tokens that are 100% unique, indivisible, and immutable. You can think of them as certificates of ownership that exist on the block chain. They are created when a digital file (commonly an image, video or GIF) is minted. This means that a certificate of ownership and originality is generated via digital assets and sold/granted to the new owner. This is an excellent way to give value to your digital work!

What Are NFTs Used For?

They are essentially collectibles: a piece of art, an audio or video clip, a photograph… if you can transmit it digitally, you can buy it as an NFT. Since each NFT is secured by a cryptographic key, they are unique and individual tokens that prove sole ownership that cannot be deleted, copied or destroyed. It enables the robust, decentralized verification – of one’s virtual identity and digital possessions – necessary for metaverse society to succeed and interact with other metaverse societies.

How do NFTs fit into the metaverse?

A metaverse is a 3D digital environment operating on the block chain. Here, technologies such as VR and AR act as the visual component providers, while the decentralized medium provides unlimited social interaction and business opportunities. These environments incorporate numerous processes and elements such as communications, finances, game worlds, personal profiles, NFTs and more. The potential of the metaverse is attributed to the freedom it offers; anyone in the metaverse is able to create, buy, and view NFTs to collect virtual estate, join social communities and more.

While still in the early stages of development, metaverses present numerous potential social and financial opportunities with the use of NFTs and offer new ways for people to play, interact, gather, earn and transact. We believe that NFT ownership is key and will open up a world of opportunities in the emerging metaverses.

Beyond the hype of multi-million dollar digital art sales, the significance of NFTs may lie in enabling the beginnings of something resembling genuine human society, based on free markets (for goods, services and ideas), independent ownership and social contracts, to flourish in the metaverse.

NFTs–Gateway to the Metaverse Economy

While the first NFT was minted in 2015, it is safe to say recent developments in the metaverse industry are now setting NFTs on a new path to the future. As a result, an abundance of speculative opportunities are emerging for businesses, investors and entrepreneurs alike. NFTs are the bridge to the metaverse, and facilitate identity, community and social experiences in the metaverse.In particular, the play-to-earn gaming economy will engage and empower players of blockchain games via NFTs. The metaverse is a massive concept, and NFTs can serve as a key concept in the broad ecosystem. NFT metaverse projects would drive the possibilities of using NFTs as deed to virtual property. NFTs could help in gaining exclusive access to enter the location in metaverse alongside allowing access to others. Therefore, NFTs are the linchpin for creating value and engaging users in the metaverse economy.

Fueling metaverse through NFTs

NFTs serve a key concept in the metaverse ecosystem, allowing people to own virtual goods in the form of real-estate, items like cars, boats or even accessories and paintings-all possible through NFTs.

But, why only NFTs? This is because NFTs are built on block chain technology that gives rightful ownership to the NFT holders. So for instance, if you own a land in the metaverse (which is possible also), you get an NFT as deed to the virtual property. This means you are the rightful owner and only you have exclusive access to enter the location in metaverse alongside allowing access to others. NFT-controlled access could also help in ensuring VIP access to the events in metaverse. NFTs are not just a key concept in the metaverse environment, it is the future that will change our futures forever.

FUTURE USE CASES OF NFTs

As non fungible tokens (NFTs) step into the mainstream, they are nearing a ‘coming of age.’ In this next phase, investors are rapidly discovering new use cases for NFTs beyond the initial frenzy of digital artwork and collectibles. In particular, the metaverse is relying on NFTs to fulfill the five following transformative functions.

1.     Opening the next frontier of gaming

This offers a more immersive experience compared to traditional video games. But in a metaverse, which is essentially a unified and interoperable VR space, players can interact with each other and play games through human-computer interaction (HCI).

The single interoperable environment opens the next frontier of gaming, enhanced by social gaming, play-to-earn (P2E) and portable game assets. Notably, NFTs hold the keys for unlocking all of these concepts.

2.     Advancing the creator economy

NFTs are intended to virtually represent innovative or unique assets. While NFTs are not formally a currency, items minted as NFTs can be sold and traded on virtual platforms. Armed with this transactional power, NFTs are ushering in the next wave of the creator economy.

3.     NFTs: Identity in the metaverse

Users could use NFT assets to build out this identity and gain access to new experiences in a metaverse. In a metaverse, NFTs can be perceived as the extension of our real-life identities, granting us each complete ownership, control and flexibility for creating our virtual persona.

4.     Bridging physical and digital worlds

It’s necessary to note the social experiences of the metaverse model can be transitioned offline as well, with NFTs effectively bridging the gap between physical and digital worlds.

5.     Building up the virtual real estate market

A key economic concept of Decentraland and other metaverses is adjacency of land. All metaverse parcels are contiguous to others at a fixed location – within a finite geography. This creates scarcity due to the limited amount of property supply. And scarcity enables property value to rise and fall, based on universal laws of supply and demand. For instance, Decentraland is comprised of 90,000 parcels of land that each measure around 50 feet by 50 feet. This maintains ‘digital scarcity,’ a concept that has long been discussed in relation to cryptocurrency.

CONCLUSION

The scope for NFTs is colossal. Theoretically, NFTs could reimagine the notion of digital ownership altogether. Despite the monumental success of NFT artwork and the substantial returns investors have seen, there are many practical NFT use cases just around the corner. From major fast-food restaurants to A-list celebrities, everyone is getting in on the NFT hype. Despite the potential benefits of NFTs, many believe that significant advancements must be made before NFTs can truly operate to their full potential. PlatinX is a leading Crypto Market Making specialized in digital assets trading and market making.