Oleg Fonarov is the founder and CEO of Program-Ace, a software engineering, Web3 development and digital transformation company.
Two hot topics, two areas of huge potential for businesses. That is how NFTs and the metaverse can be described. While these concepts have generated a lot of media buzz, headlines and interest, they have created just as many questions.
With many businesses still trying to grasp what these things mean and what their role is, I am here to give you the lowdown based on my company’s experience in building these types of solutions. Strap in and prepare to navigate the quirky and promising world of NFTs and the metaverse.
Explaining The Terminology
A solid grasp of the two concepts is crucial for taking advantage of their strengths.
- The metaverse. This is a theoretical concept of a digital 3-D world that you enter via a virtual reality headset. In this virtual world, you have a “body” (avatar) that you can customize, a home to fill with the stuff you like and hundreds of spaces to visit. You can interact with other users, do work, play games and basically perform most of the activities that you do in everyday life.
The metaverse is useful because it greatly reduces our need to travel and use physical resources. In a 3-D world, we can visualize and interact with any object without putting in much effort and time. We can cycle between activities, chats, locations and data with a simple gesture. Instead of switching between apps and a web browser, everything is connected and accessible in this digital world.
• NFTs. These are nonfungible tokens — tokens that are 100% unique. You can think of them as certificates of ownership that exist on the blockchain. 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 cryptocurrency (usually Ethereum) and sold/granted to the new owner.
NFTs are useful because digital art and assets are notorious for being easy to steal and copy. While NFTs cannot stop somebody from stealing digital assets, they provide a neutral and unbiased confirmation of the designated owner. If we ever see NFTs integrated into copyright law, they may also serve as evidence against the misuse of digital goods.
NFT Uses In The Metaverse
Because NFTs are generally associated with websites and transactions that occur through web browsers, and because the metaverse is mostly VR-based, there might be some confusion about what their common ground is — and whether there is any in the first place. Thankfully, despite the relative novelty of both concepts, several companies have already found creative and fruitful ways to use both simultaneously.
- Virtual marketplace. With apps like VRChat, spaces for communication in VR are already thriving, and it is not a huge leap to assume that these spaces can also serve as a fertile trading ground for NFTs. Sellers can easily provide links and previews to assets on the web or mint assets directly in the VR landscape.
VR and NFT marketplaces can appeal to many brands in various industries, and Nike is a good example. It’s already dipping its toes into the metaverse with its own virtual “Nikeland” and has now acquired a studio (RTFKT) known for making NFTs of products. Perhaps it is only a matter of time before we see the two concepts meet in “Nikeworld.”
- Art gallery. VR is perhaps the best possible platform (short of an actual brick-and-mortar building) for viewing art. You get to see it up close with every detail and from every angle. This type of solution differs from a marketplace because the prices are already set (and not negotiated), the assets are all of one type (art compositions) and the atmosphere is much more relaxed.
For example, many museums are currently placing NFT artwork in metaverses such as Сryptovoxels, powered by the Ethereum blockchain. According to The Art Newspaper, Cryptovoxels hosts “art galleries and museums, including San Francisco Museum of Modern Art and the FC Francisco Carolinum Linz, Austria.”
- New frontiers. Real estate can be a pretty lucrative industry to work in in the physical world, and the same could apply to the metaverse. We are not referring to real homes being sold digitally but rather digital land and territories being partially or completely sold for further user development.
This case is more easily illustrated with an example. Decentraland is a virtual territory where plots of land can be sold as NFTs, and everything is represented in 3-D. This “country” has its own cryptocurrency and is slated to enter the metaverse (make the world accessible to VR users) later in 2022.
How To Implement A Metaverse With NFTs
As you may have noticed, the metaverse is still a pretty new concept, and only a handful of companies have already built real solutions in this field that implement NFTs. Thus, if you see a use case for the combination in your business and have the resources to make it happen, you could be one of the first companies in your industry to take advantage of these two trends.
Because most companies do not have any VR developers employed on their payroll full time, we might recommend looking to work with a company that has many years of experience in building immersive apps. Companies might consider going down this road even if they have a few local developers, as they might lack platform-specific knowledge of VR software such as building with Unity and Unreal or implementing movement tracking. Knowledge of blockchain and NFT minting will also be helpful unless you want to take on these technical aspects yourself.
Hopefully, now you know the main ideas behind the two concepts and have a sense of where the market is headed. If you choose to embrace the metaverse and NFTs in your business, it could be a great chance to break away from competitors and paint your business as a future-oriented one.
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