Many people associate NFTs with digital images used as valuable collectibles. For this reason, NFTs are similar to physical artworks or collectibles, which are exchanged because of their value in the collector market.
However, NFTs are also an important link in the growing sphere of what is commonly called the metaverse.
When Facebook rebranded as Meta in October 2021, it inspired a flurry of discussion around the metaverse. The concept of the metaverse can seem unclear, especially given how often it’s thrown around in the media. It’s natural to associate it with online gaming or high-ticket real estate sales.
However, the metaverse is more than that and is actually very simple. With the integration of the metaverse and NFTs, we found the lost piece to virtual reality. More importantly, this rebrand paved the road to wider adoption, not only of NFTs but also of blockchain-based technology in general.
So, what actually is the metaverse?
In order to continue, we first need to explore what a metaverse really is. Metaverses are essentially a network of 3D virtual worlds focused on social connection. Simply put, a metaverse can be understood as a shared virtual space that resembles our experience of the physical world. For instance, players can purchase virtual assets such as land or vehicles, enter events such as music concerts or hang out with friends in a virtual cafe.
In this sense, metaverses are places where you can customize your life however you like, meet new people from the comfort of your house or create anything you want to. In these spaces, your imagination is the only limit.
The term metaverse dates all the way back to the 1992 science-fiction novel Snow Crash by Neal Stephenson. The book presents the metaverse as an environment where developers can create their own buildings, parks, even things that don’t exist in reality, such as flying cars or combat zones where people can battle.
Are metaverses just video games?
Sounds familiar? That’s because it is. Brands of the gaming industry have already brought those features into their own games. Take for example Minecraft, developed by Mojang Studios, or The Elder Scrolls Online by ZeniMax Online Studios. In these spaces, you can create, interact and engage in combat. Basically, video games provide a virtual space that resembles reality while also delivering unique experiences.
Here is the key question, though: What do all these online multiplayer games currently lack? What is the difference between old and new metaverses?
The issue concerns the level of centralization. What’s currently missing from most games is a way for individuals to have real-life ownership of what’s being built. Currently, your in-game efforts, the things you earn or create, remain in a virtual space owned by a specific game builder. These spaces typically don’t have a way to add value to the hours spent in such a world.
That means that in a centralized digital world, the moderators have absolute power. If they wish, they can cease operations at any given time, something that regularly happens as games age or stop receiving support. That’s where NFTs come into play.
Why does the metaverse need NFTs?
The main connection between the metaverse and NFTs is related to digital assets and how they are given value. The metaverse allows people to showcase digital forms of art and to own property or any other sort of digital item. NFTs allow them to add value to that content with proof of ownership.
With NFTs being attached to a specific item in that virtual world, that automatically makes the owner of that NFT token, which is verified by the blockchain technology, the owner of the item it represents. That item can be a painting, a recording, in-game loot, a piece of virtual land — you name it.
The metaverse is a massive concept, and NFTs could serve as the key to reaching its full potential. They are very likely to become the optimal currency for it, meaning that they can be used as deeds to virtual property or even to provide you exclusive access to locations within the metaverse. Interestingly, the same functionalities of NFTs in the metaverse could be used to provide access to real-world events, advertising or as a source of income for many people.
Interoperability in the metaverse
Blockchain technology has given us the tools we need to realize the full potential of a true metaverse. Furthermore, virtual assets such as lands and digital currencies are scarce because everything is recorded in the digital ledger.
Currently, we have only the perception of what a metaverse actually is. The future is in interoperability, or integration, across worlds. That is to say, the metaverse can integrate platforms and media formats. This would allow metaverse engagement to feel like full, robust experiences — rather than a single play session or storage for virtual assets.
To make interoperability clearer, let’s return to the example of Minecraft and The Elder Scrolls. Imagine you have a friend who plays Minecraft, and you play Elder Scrolls. Neither of you necessarily wants to buy a new game and start playing from the beginning just so you two can interact. What options do you have?
Right now, the answer is probably “not many.” This is why some virtual experiences can feel singular and private. While the virtual world is becoming a huge part of our lives, we only have fragmentary examples of online virtual interactions: playing video games, interacting on social media platforms, a Zoom call to catch up with family and friends during quarantine.
Now, imagine a single universe where everyone can connect to the virtual realities of others. This vision is interoperability. You could talk, hang out, play a quick game of some kind or even share experiences from the platforms of your choice. Interoperability has the potential to connect us, to friends, family members, co-workers or anyone else we choose.
Given the current limitations of technology, the full potential of the metaverse is waiting to be unlocked. However, it could transform into the ultimate way for people to virtually interact with each other in the future. Blockchain technology is going to play a pivotal role in opening the virtual world to everyone in a decentralized manner. NFTs will add value to everyone’s experiences.