• Thursday, June 13, 2024
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EXPLAINER: The Metaverse and the untapped potential of NFTs

EXPLAINER The Metaverse and the untapped potential of NFTs

When Mark Zuckerberg on October 28, 2021, changed his company’s name from Facebook to Meta, he introduced most of the world to the concept of the Metaverse.

Some news outlets portrayed the metaverse as a dystopian future in which people would transform into mindless robots in virtual reality

To describe the Metaverse today is to compare it to the internet in the 1990s. There was no idea of social media, content providers, sharing platforms, trade systems, or any of the other features that make up the internet today. As a result, the Metaverse is defined as whatever we construct on top of it. Web 3.0, blockchain NFTs, and virtual reality all intersect to make up the metaverse. These three factors are what allow the metaverse to exist.

Web 3.0

Web 1.0 was basically pages with a bunch of text and a few hyperlinks to other pages with even more text. There is no interactivity, no user-generated content, and the content consists primarily of words on a screen. The current state of the internet is known as Web 2.0. It’s mostly a community-based platform, with a lot of user-generated content and engagement.

In web 3.0 which is the next version of the internet, the most important thing is to own a piece of the internet unlike previous versions of the web that only allows you to own a domain name. In Web 3.0 everything you buy, sell or make on the internet is yours, and you have full rights and complete ownership. This is made feasible by blockchain and more specifically non-fungible tokens (NFTs).

Blockchain NFTs

NFTs are certificates of authenticity and ownership based on ‘blockchain’ technology, a tamper-proof system that also authenticates transactions. Because NFTs cannot be copied or altered, they are well suited to tracking ownership of non-replicable property, such as the rights to a picture or a plot of land. NFTs are the foundation blocks of value in the metaverse.

To better understand the values of NFTs and how they work, let’s talk about the concept of money. The idea of money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed and over the year we trust N5 naira note to be worth N5 likewise other naira notes with a higher value placed on them. This is a social construct and makes it easier to exchange goods and services and we agree to use them.

The value of an NFT is determined by how much its owners believe it is worth, and it offers ownership because it can be recorded in the blockchain, making it impossible to copy.

Read also:  Windfall Technologies wants to bring Africa’s real estate into the metaverse

Virtual reality (VR)

Even though it is only a component of the metaverse, virtual reality appears to be the most popular of the three. It’s a computer-generated world featuring realistic-looking scenes and objects that make the viewer feel immersed in their surroundings. This environment can only be experienced with the help of a virtual reality headset.

Individual ownership

Once blockchain becomes mainstream, the internet will be owned by individuals through NFTs. Here is an example, imagine you’re an artist and you make one song and sell it for $1 as an NFT, in your smart contract you can quote that each time your song gets sold, you make 80 percent that goes to your digital wallet with 20 percent going to the seller’s digital wallets. Keep in mind the transactions are done using cryptocurrency.

Let’s say we buy your song for $1 and sell it to someone else for $1; in this case, you as an artist make $1 from the first sale and 80 cents from the second sale, while we make 20 cents, and this could continue as long as the song is trending, people like it, and it sells.Every time your music is sold for whatever amount, you automatically receive 80 percent of the proceeds in your digital wallet. There are no streaming platforms or record labels involved; just you as an artist, and your music generating money for you in the metaverse, and not only do you make a lot more money, but your community does as well.

This is how individual ownership develops, and everything in the metaverse follows this formula, which is what the metaverse is all about: individual ownership’s rise.

To profit from this, you need to become a native in this new community, you need to understand how they are created to see these new opportunities. If you have no idea of how it all works and quickly dismiss it as a dystopian nightmare, you’ll probably be left behind. The good news is that we are just at the early stages and people are starting to get educated in this space.

Sporting brand Adidas stepped into the world of the metaverse by launching its first collection of NFTs in December that can be purchased in cryptocurrency, which will initially give “exclusive access” to digital accessories that can be used in the Windows video game The Sandbox. Nike also announced on 13 December the acquisition of RTFKT, a digital fashion start-up that also relies on the blockchain.