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May 17, 2022

How important are NFTs and Blockchain in the Metaverse?

Over the last few months we have seen how the news and emerging technology trends have focused on a term unknown to many until recently: the metaverse. It has ceased to be something more belonging to science fiction and is becoming a reality (virtual) and also physical for many companies that have joined the race to launch their own metaverse proposals in order in order not to be left behind. The sectors range from design, architecture, fashion, entertainment, retail, etc.

And joining this trend are two others that are also making a lot of buzz, and will resonate even more during 2022: NFTs and blockchain technology. Surely they are familiar to you, but perhaps you are not sure what they are or why should be important to you or your business. Below, we clarify all these concepts, how they relate to each other and the reasons why you shouldn’t lose sight of either of them.

Metaverse and NFTs

The possibilities offered by the metaverse are so varied that they range from attending virtual concerts, traveling, shopping, making transactions, going to the movies, trying on clothes, changing the way we work, and so on.

This digital universe will expand our frontiers to a much more interactive and massively promoted alternative reality. And one of the main characteristics of the metaverse is that it contains a full-fledged economy and encompasses both physical and virtual worlds, so it will be decentralized.

From this arises the main connection between the metaverse and NFTs, as the relationship of the two is related to digital assets and how they are given value. The metaverse allows creators to exhibit digital forms of art and property; and the NFTs will be in charge of pricing that content with proof of ownership.

NFT Blockchain

When we talk about NFT as a currency to make transactions in the metaverse, we must clarify that they use the same blockchain technology that cryptocurrencies use, although they are not a type of coins themselves.

The ones we know as coins, are pieces of art, video game content, music or any material that can be attached to this specific token. Hence, so many artists and content creators have joined this new trend to monetize their work.

The relationship with the blockchain goes through a fundamental pillar such as the fact that this technology ensures that these assets are auditable, i.e. buyers of a unique asset could keep track of it. In short, the blockchain is in charge of introducing the features of interoperability and lacking.

Indeed, the relevance of NFTs lies in the fact that their provenance can be assured by introducing a code in the programming. This means that, if the work is sold to another buyer, the creator of the work will receive a percentage as remuneration for each transaction.

As a result, the emergence of numerous NFT markets is making it a phenomenon in many industries.

Why Are NFTs The Key To Access The Metaverse?

There are many questions we can ask ourselves when we talk about the union of NFTs with metaverse: Will NFTs help to access the metaverse? Will they be in charge of defining the future of the metaverse? What role does the blockchain play within these virtual universes?

As we said above, NFTs or non-fungible tokens are a new modality of digital assets. They are unique, indivisible and immutable. The unlimited trading opportunities offered by the metaverse make their linkage with NFTs the logical progression.

NFTs can help gain exclusive access to enter a given location in the metaverse, as well as virtual property deeds. In fact, they are one of the keys to changing the fundamental design of the metaverse, transforming conventional social networks of user interaction, transaction and socialization.

Some examples are:

  • Fair and Transparent Economy: The union of the two allows individual users and businesses to easily represent their real-world assets and solutions in a decentralized digital environment. The metaverse could be opened up to more real-world assets through new models that would be driven by NFTs. And the blockchain would be in charge of providing transparency and immutability, as the metaverse would be underpinned by this fair and open economy where no possibility of artificial value inflation would be found.
  • New Identity Experiences: In the metaverse creation process, users would be able to show their support for a specific project by holding NFT assets. The result would translate into like-minded owners of these NFTs being able to form communities to share experiences and collaborate on content creation.
  • Purchase of Properties: Metaverses give users the opportunity to obtain full ownership of virtual spaces in the metaverse through NFTs. Examples include selling virtual land for profit or renting land for passive income along with the development of structures, stores or events.
  • Marketing Tool: Another of the functionalities would be at the time of launching products of a brand or special privileges for followers. NFTs would be responsible for introducing interoperability outside the metaverse with an infrastructure that supports location-based participation features and augmented reality.
  • Access Control: The association of real identities with digital avatars presents opportunities to define access to the metaverse with NFTs. For example, tickets to access an event can be based on NFTs and will limit access to the most exclusive guests.

The possibilities are endless and many more are yet to be discovered.

The union of NFTs, metaverse and blockchain is a turning point and has the potential to transform the future. The combination of digital world, real and virtual assets and the new meaning they give to the economy and social experiences will be the key to the future of our interactions.

Elena Canorea
Author
Elena Canorea
Content & Copywriter

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