Metaverse

What Is The Role Of NFTs In The Metaverse?

If you are curious to know about the role of NFTs within the metaverse and how we can use NFTs in various areas of the metaverse, this blog is for you.

May 27, 2022

As we know, NFTs represent the ownership of digital assets in the form of products, services, and land within the metaverse. Without NFTs, it is impossible to prove who owns a digital asset.

We can say that the metaverse allows people to showcase digital forms of art and assets, and NFTs enables them to put a value on that content with proof of ownership. In other words, NFTs are a bridge to the metaverse and enable identity, community and social experiences across the metaverse.

How are NFTs Used in the Metaverse?

An NFT is verifiable on a digital public ledger called the blockchain which is an immutable public record of transactions and can’t be changed. The blockchain includes every single transaction of an NFT from the time it is minted. Thus, you will be able to see when it was created, who created it, who has owned it, who currently owns it, and how much it has been traded for each time.

While in the real world we have paper contracts and legal agreements that prove ownership, in the case of NFTs, the smart contract acts as the intermediary, and the blockchain stands as a proof of record of the transaction. Now let’s see how NFTs are used in the Metaverse:

1. Digital Real Estate

Although the metaverse is relatively a new platform, we may say that it is basically a virtual extension of the real world. Despite some key differences, there are also some extreme similarities.

One of the similarities is real estate. We need land and structures to operate both in the real and virtual worlds. Metaverse real estate is a parcel of land used to meet with others, play games, sell NFTs, go to virtual concerts, build businesses, and do countless other virtual activities in an immersive and virtual environment. In other words, NFTs are real estate.

When Facebook changed its name to META, there was a focused interest and real estate boom in the metaverse. It is worth saying that digital real estate is supposed to grow and expand in the future.

2. Metaverse Marketplaces

Trading on the metaverse is a prevalent activity and various virtual marketplaces serve as a fruitful trading field for NFTs. Marketplaces are built on a blockchain ecosystem allowing the masses to tokenize digital assets and seamlessly trade them.

In marketplaces users can both provide links to previews to web materials and mint assets. VR and NFT markets appeal to numerous businesses from diverse sectors. Nike is a good example that is already dabbling in the metaverse with its own virtual Nikeland. It also has a studio (RTFKT) recognized for creating NFTs of items.

3. Avatars

An NFT avatar is a digitally generated image in a profile picture format. NFT avatars are made in a cartoonish or pixelated fashion and stand out with very unique artistic traits.
No two avatars look similar, they are all unique.

We can say that NFTs are used as avatar birth certificates. Avatars are documented the moment they are created in the metaverse like humans – the moment they’re born. As we attempt to track every single human born on Earth, every avatar is tracked after being created in the metaverse.

For creating an avatar in some of the most popular metaverses you can either create a guest account or sign in using your Web3 wallet. Your wallet is all you need to sign in because that is where all your NFTs and crypto are stored.

4. Play-to-Earn Gaming

Play-to-earn games are video games that reward players with crypto that has value in the real as well as in the virtual world. You can actually earn real money or NFTs – cryptographically unique tokens when you play these games.

The NFT can represent an in-game asset, such as a virtual tool or weapon to be used as a part of the game. When you win them, you can either trade them for other assets within the game or sell for actual money on an NFT marketplace. NFTs act as the only way to prove ownership of the digital items and also trade them with others.

5. Parties and Access

When people attend some kind of party or event in the real world they generally have to show that they are allowed entry into the event by a ticket or something similar. In the metaverse NFTs act as their ticket to enter exclusive shows, conferences, and any other virtual event that might require people to pay in order to gain access.

Conclusion

Overall, NFT’s main role will always be to prove ownership in a true and transparent way, especially in the metaverse where everything is possible. NFTs are a part of the metaverse that are the building blocks of metaverse, and it is evident that NFTs and metaverse would open up a broad range of opportunities.

NFTs work the same way real-world things do in the real world. NFTs are considered an essential part of the emerging Metaverse, whose survival depends on asset tokenization. The Metaverse and NFTs, according to some computer specialists, are linked.