Since 2021, terms like "metaverse" and "NFTs" have been making waves in the crypto industry. NFT companies like Chainers have also played vital roles in increasing the adoption of the concept with their daily giveaway of NFTs.
Science fiction has made the concept of the metaverse even more famous, and it has received diverse meanings. A simplified metaverse meaning is to describe it as a giant 3D virtual world in which users interact and communicate with each other using unique identities known as avatars. The metaverse functions like the real world, with its economy and currency. Here, you can buy land, build houses and structures, invest in real estate, and go shopping.
Many big companies have also tapped into the innovative opportunities that the metaverse presents. In October 2021, the founder of Facebook, Mark Zuckerberg, took the big step of rebranding from just a social media company to Meta— a metaverse-based company.
Another major tech company, Microsoft, is also actively working towards the launch of Microsoft Mesh, a metaverse-based workplace.
NFTs, on the other hand, are digital assets that show ownership of assets ranging from videos to images, art pieces, and even music. NFTs also prove ownership of virtual assets like real estate and land.
Cryptocurrency, or "crypto," is a digital currency that is cryptographically secured. As a result of blockchain technology, transactions with these digital currencies are highly secure, safe, and cannot be duplicated. Cryptocurrency is highly decentralized and does not have or require any central authority to govern its operations.
What Is the Importance of NFTs and Cryptocurrency in the Metaverse?
Compared to the physical world, the metaverse has its own economy and currency. Cryptocurrency is the "money" spent in the metaverse, which can be used to buy land, property, clothing, play games, or pay for metaverse gaming experiences. Cryptocurrencies in the metaverse are similar to physical money because they fluctuate in value due to the forces of demand and supply among their users.
NFTs function as receipts for the transactions that occur in the metaverse. Just like you get a deed of assignment for purchasing physical land, you get NFTs as proof of purchase for whatever good or product you buy in the metaverse. The evidence that NFTs provide is more secure than even physical documents, and this is because of their unique feature of immutability thanks to blockchain technology.
As a result of their immutability, NFTs are nearly impossible to tamper with, as each comes with a unique identification, which increases their value. It is also easy to trace ownership and track its transfer.
In simple terms, crypto and NFTs have a vital role to play in the metaverse. To transact in the metaverse, you pay with cryptocurrency and get a unique NFT to prove your ownership. The blockchain ensures that ownership cannot be counterfeited, as every transaction is automatically recorded on the ledger.
Crypto and NFTs have many other roles in the metaverse, some of which are:
- Increased Virtual Community Participation/Experience
Similar to the way a social media username represents you and your activities, NFTs allow users to interact with others using distinct animated characters (avatars) that can walk, talk, and do other actions. This technology enables you to move and perform transactions in the virtual world with your own identity (more like how your physical body helps you interact in the real world), thereby improving virtual social interaction and community participation.
- Trading Purposes
Like in a physical shop, virtual products (goods and services) can be traded in the metaverse and displayed for users to buy.
The fashion industry is one of the oldest ones to tap into the economic potential of the metaverse approach. One such company in the industry is the Luxury House Burberry, which made NFT accessories for the video game Blankos Block Party. Louis The Game is another NFT video game created by the renowned fashion designer Louis Vuitton.
- Ease of ownership transfer
NFTs make it easy for product owners to transfer ownership of products from them directly to the customers transparently and securely. Businesses through the metaverse make money by launching their products and displaying them for interested buyers to purchase using virtual currency. Games, collectibles, and other materials are easily transferred once payment is made.
- Advertisement
Apart from advertising in the physical world, companies are now starting to realize the potential of the metaverse for reaching a wider audience. Many companies and products have started using this approach to showcase their products to diverse audiences, especially the younger generation. Ultimately, it serves as a way of increasing brand presence and product awareness.
- Prevention of Piracy
Piracy, or counterfeiting, is a significant problem faced by physical products. Once a product is made, many other people can come up with imitations that can affect the value of the original product. As a result of the nature of crypto and NFTs and their interaction with the metaverse, piracy is significantly reduced due to creating digital scarcity.
Now, when businesses launch their products as NFTs and upload them to the metaverse, it ensures that no one else comes up with the same product or an imitation. As such, each NFT is unique.
There are several metaverses where you can log on to be a part of the virtual world. Here is a list of some with their acceptable cryptocurrency.
- Decentraland
Here, you can buy or sell land and other properties. The acceptable currency here is MANA.
- Star Atlas
Star Atlas is a gaming metaverse built on the Solana blockchain with features like real-time graphics and a multiplayer mode. ATLAS is the currency used here.
- Axie Infinity
Axie Infinity is one of the most popular metaverses around an NFT collectible virtual pet called Axie. The currency used here is AXS.
- Sandbox
It is a community-oriented gaming metaverse. The currency used here is SAND.
- NFT Worlds
NFT Worlds stands out as a metaverse gaming project that draws inspiration from the expansive open worlds of Minecraft. What sets it apart is its distinct currency called NFT World Crypto, which adds a unique element to the virtual experience.
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