The Metaverse will bring unbridled evolution to NFTs

Even as non-fungible token (NFT) transactions have taken off and made headlines, for most people outside of the crypto world, they are just a gimmick. The metaverse will change that.

There is always a turning point when new technologies go from incomprehensible fringe interest to suddenly part of life. That point usually comes from the confluence of various factors, and right now, we are experiencing what happens when two of those trends hit the tipping point together.

By Mark Zuckerberg decision to rebrand from Facebook to Meta It was enough to propel the metaverse to major headlines around the world, although the concept has been around for at least three decades. It is this apparent sudden appearance of the metaverse that provides the escape velocity for the image rehabilitation of NFTs as a speculative cryptographic stunt.

Major brands like Morgan Stanley are now in the business of predicting the future of NFTs, and the "digital luxury" industry has forecast a Metaverse. valued at $ 50 billion by 2030. The next phase of the NFT cycle has begun.

Related: Why are major global brands experimenting with NFT in the Metaverse?

More than virtual

The metaverse is commonly thought of in terms of virtual and augmented reality, but it isn't quite that simple, despite VR / AR adding to the promised immersive experience. It is also thought in terms of games, as in Ready Player One, but it is not limited to that either. However, both give hints of what will be.

Work on the metaverse has already leaned toward an "embedded Internet", to appointment Zuckerberg's vision: a network of interconnected virtual experiences that combine the digital with the physical, offering new ways of working, playing, socializing and creating. Think of it as an extension of the work-from-home experience precipitated by COVID-19, but now in a 3D virtual space, whether you access it through a headset or a regular 2D screen. Remote meetings shouldn't mean a wall of talking heads; instead, you could share a virtual space with a group of avatars. That's important because having a real sense of presence allows for more nuanced and natural interactions.

Facebook, of course, saw this opportunity early and has every reason to continue promoting it. Your Oculus Quest headphones, sold out for much of 2020, have been additional a big boost to the virtual reality market, largely thanks to its ease of use. The speed with which this device has gained traction underscores consumers' new appetite for 3D experiences: In the past 18 months, people seeking to escape the isolation of lockdown have creatively repurposed games as venues for social interaction, already be it at Animal Crossing weddings or at work. meetings in Red Dead Redemption.

There is no clearer indication of how games lay the foundation for what will soon be a much broader set of experiences. Another player who has been keeping an eye on the metaverse for some time is Epic Games, the studio behind the giant Fortnite, which hosted a virtual concert of the electronic act Marshmello a full year before closing. Epic CEO Tim Sweeney has bet on the farm in the metaverse, offering services, including its Unreal Engine design tools, for free. The objective? To drive development in the direction he wants to see: one with fewer barriers, more interoperability, more data sharing. Less centralized; less harmful.

Related: Is Facebook's centralized metaverse a threat to the decentralized ecosystem?

Metaphysics ... with a blockchain ration on the side.

There is certainly no underlying need for a decentralized structure, but it aligns with what many advocates of the metaverse see as the most desirable goal: what Sweeney describes as an "open framework where everyone is in control of their own presence, free of controls."

To create a metaverse worthy of the name, rather than a collection of separate 3D spaces, platforms must be seamless and interoperable. Payments must be secure, frictionless, and instantaneous, and it must be possible to retain and use created assets (such as your custom avatar) no matter where you are in the metaverse. Until recently, to participate in the digital world, you had to leave a trail of breadcrumbs that allowed Guardians (game creators, etc.) to recognize you. Blockchain, when used by individuals to keep track of their accounts, assets, and transactions, adds great potential for users to choose how they behave, what they own, and what they decide to trade.

Blockchain is one of the "core enablers" of the metaverse, according to venture capitalist and influential metaverse commentator Matthew Ball. Another crucial element in his definition of the metaverse is an "individual sense of presence and ... continuity of data." The more you "live" online, the more important your individual "skin" will be. Even the most basic pixel art can become strongly associated with individual identity, as demonstrated by the passion for CryptoPunks; owners often say they feel closely connected to their punk.

In fact, NFTs make it increasingly possible to express individuality online, either through randomly generated or carefully designed functions. The virtual clothing and accessories that users choose in the metaverse will help make the online identity feel true to each person and deepen their commitment. Fashion and art are a vital part of self-expression in the physical world; Why should the online world be any different?

As mentioned above, digital fashion is booming and you have a new growth opportunity at NFT. Design houses and celebrities sell furs, outfits, hairstyles, and pets like NFT; "Dropping NFTs" is as exciting as releasing an unexpected album. In fact, musicians and athletes alike are taking advantage of the potential for royalties when NFT's assets are sold, in the hope that they can create a new property rights system, free from the practices of legacy brokers.

Related: Haute Couture becomes NFT: digitization at Paris Fashion Week

As digital property rights are legitimized and blockchains become more secure, NFTs may become more serious bargaining chips. Imagine a group negotiating with Disney for the rights to use their characters, for example. Does it seem crazy? Sotheby's recently saw a DAO (made up of 17,000 donors) that pushed the bidding for an exceptional copy of the United States Constitution to more than $ 43 million. Although they did not win this time, it is clear that the shared ownership facilitated by NFT will become a real economic force.

Financing the future

What does all this mean for capitalism, innovation and creativity? By business models and our lived experience?

The range of revenue streams available in the metaverse, from gaming to ticketing, software subscriptions and healthcare, has the potential to shift the technology paradigm away from advertising and big data, with all the nightmares. of privacy and security that they have brought. That is certainly not a fact, but at least it is a possibility.

The more open and accessible the platforms are, the stronger this narrative becomes. Interconnection platforms attract more users; Then, seamless, interoperable asset and payment mechanisms increase your incentive to design and market, circulating revenue throughout the system and increasing the potential for a parallel economic order.

The major gaming corporations are already making their metaverse development tools widely available with the explicit goal of fostering interoperability and thus wider adoption. These companies are convinced that an open metaverse is best for business. It will undoubtedly be the best way to create a thriving online economy, one in which users are motivated to participate and create value, which will accrue to both platform developers and user creators.

It is possible that, for once, the technological, philosophical and economic cases all point in the same direction: towards a distributed metaverse, using the capabilities of blockchain technology, in which online citizens can finally escape the walled gardens of Web 2.0 and reap the benefits. benefits of your contributions. In this exciting new world, NFTs will bridge the gap between the real and the virtual. From identity to business, tangible property will make a difference. It is a whole new level of reality.

This article does not contain investment advice or recommendations. Every trade and investment move involves risk, and readers should do their own research when making a decision.

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