The Future of NFTs and Metaverse?
The Future of NFTs and Metaverse?
Non-fungible tokens (NFTs) have a bright future, not just because digital art is a massively underappreciated asset class poised to dominate the art market (although we think this is true); rather, NFTs have a bright future because they’re providing a bridge to digital economies that will touch everyone in the future (and even in some cases, today).
Looking at NFTs solely as a speculative art asset is narrow-minded and misses the multitude of future uses of NFTs. We’re soon likely to see the NFT-ification of everything from NBA season tickets to rare Mercedes Benzes.
With that being said, there are three distinct areas within the future of NFTs on which you should focus your attention:
• The metaverse
• Nonbankable assets
• Digital wallets
In this chapter, we’ll explore each area in detail, showing you the role of NFTs in these multitrillion-dollar futures,
The Metaverse
The Internet has evolved to the point where we can share and communicate almost anything that we want across space and time. We find love through apps. We trust our digital neighbors to give us the best suggestions for food and housing. We place our most precious photographic memories in the hands of digital giants to protect for eternity.
The Internet has become this expansive, virtual, shared space for almost anything you can imagine. We rely heavily on others who share this space to keep us informed, write funny tweets, make interesting content, and much more. But this isn’t the best version of the Internet. Like any form of existence, it must continue to grow and evolve. So, what’s next?
The evolution of the Internet is the metaverse—a culmination of the shared Internet and the boundless possibilities in augmented and virtual reality technologies. The Internet has done a lot of the grunt work in bringing information, services, and experiences online. But there are more efficient ways to deliver, discover, and interact with everyone and everything that exists on the Internet.
Types of Metaverses
The most common comparable for the metaverse is The Oasis in the movie Ready Player One. The Oasis is an online world acces sible through virtual reality headsets. Kids go to school in The Oasis. Entrepreneurs build businesses in The Oasis. Generally speaking, everything takes place in The Oasis.
In reality, we may not reach this level of the metaverse for decades, if ever. Online games like Second Life have built toward this, allowing users to host concerts, connect with friends, and create revenue streams in their “second life.” But the idea of a one-stop shop for the metaverse is entirely ambitious. Instead, the metaverse is being built in many different siloes
Video Game Metaverses.
Video games are probably the closest real-world comparable we have to a thriving metaverse with its own economies. Many of the following games allow players to exist in a fictional world and express themselves in competitive and original ways.
NBA 2K21 gives players a lot of freedom to interact with other players and explore The City—a virtual world with outdoor courts, casinos, training gyms, parks, and lots more. For an avatar to walk from one end of The City to the other would take upward of 45 minutes. So, it’s a rather large virtual world.
Fortnite is remarkable, not just because more than 350 million people have played the game, but it’s also proven to be flush with ancillary opportunities. Travis Scott and Marshmello have both held virtual concerts in the game. Samsung created a Galaxy skin for Fortnite avatars to promote their Samsung Galaxy Note 9. (Even Louis Vuitton designed an avatar skin for League of Legends.)
There are loads of metaverses being built in the form of video games—League of Legends, Minecraft, Grand Theft Auto Online, Red Dead Online—the list goes on. Many of these video game metaverses even have their own currency with which to transact different in-game items.
Video games are further along than anyone when it comes to building metaverses. Still, they’re not entirely free-form in what you can do. Within the lines of the game, they give players a lot of freedom to roam and express themselves.
Livestream Metaverses.
Aside from the virtual world aspect of metaverses, another equally important quality is the community. Are people engaging in this virtual space simultaneously and con currently?
Behind the Super Bowl and award shows like The Grammys, streamers on Twitch, YouTube, Clubhouse, and Discord are some of the most well-versed individuals and groups at getting people to tune in live. Kitboga, for example, streams to hundreds of thousands of people on Twitch while he pranks scam callers. Thousands of people tune in live to “NYU Girls Roasting Tech Guys” on Clubhouse. These are metaverses! Live streamers show how possible it is for people to spend time together voluntarily in an online world around some shared interest.
Sometimes these streamers build up their following by tap ping into a shared interest and ask the community to participate. At other times, people tune in just to see the streamer. Regardless, simultaneous experiences are a fundamental part of the meta verse.
Live streaming is missing the immersive component that we see with video games and VR. But these live streamers are just a VR app away from building an immersive metaverse. So, in this sense, they’ve built great foundations for an immersive metaverse in the future.
VR Metaverses.
Naturally, we cannot talk about the metaverse and not cover what’s happening in VR. There are many VR apps built around this idea of a new social experience. AltspaceVR, for example, allows friends and strangers to hang out at live shows, meetups, and classes. OrbusVR provides a unique social VR experience where you can explore the virtual world of Patraeyl, level up your character (as a bard, mage, paladin, shaman, scoundrel, and so on), and connect with other players.
For the time being, most VR metaverses lack scale. There aren’t enough people in them concurrently to be engaging long-term. And this is only because VR headsets are not yet ubiquitous like smartphones and laptops.
Regardless, as you can see, we have all of the pieces of a metaverse. But bringing them together in one is a challenge. So, for the time being, metaverses will exist in siloes. However, that doesn’t mean that each of these won’t grow economically and provide more extensive opportunities for participants.
NFTs in the Metaverse
The more time that you spend in an environment, the more likely you are to come around to purchasing something there. Many people in the Chicagoland area scoff at a $10 Miller Lite, but when you’re at a Cubs game, you’re bound to cave and buy one. This sentiment is even more true for environments you choose to be in—video games especially.
As we touched on in Chapter 2, “What Are NFTs?” the demand for in-game items is massive. Gamers spent a collective $380 billion in 2020 on in-game digital assets. From avatar skins to weapons to extra lives, in-game items are a booming econ omy. There’s no reason that many of these in-game items can’t be NFTs, allowing users who’ve spent money in the game to resell their used or rarefied items.
Take the aforementioned Galaxy skin in Fortnite. The skin was released for only two weeks in August 2018. None have been created since then. By owning one, your clout (social credibil ity) instantly skyrockets among other players. While it’s a rare item, the opportunities to capitalize on it are minimal. One day, a Fortnite marketplace might exist where owners of the Galaxy skin could resell this rare skin. And the NFT back-end would ensure that the skin was legitimate and not a fake. Who knows what it could fetch on the resale market? $10? $10,000? More?
What must be understood about shared metaverses is that people are there for a reason. They all have either a shared inter est or a shared goal. As a result, there are hierarchies of par ticipants within these communities. One factor that propels a player’s rank in the game’s hierarchy is their avatar’s equipment. That’s why people spend money on Fortnite skins that have no impact on actual gameplay. It’s only natural that players in the future will truly own their items and have the ability to collect, buy, and sell them with other players.
A real-world example of this is SneakerCon. The sneaker collecting market is one of the more well-known and established collectible markets of the last decade. SneakerCon was created as a place where thousands of sneakerheads can convene in person to show off their sneakers. Some are looking to sell their sneakers. Some are looking to buy. Others even have stalls set up to sell shoe cleaning kits, sneaker artwork, and other businesses related to sneakers. But no matter who you are, if you’re not showing up in your swaggiest pair of sneakers, then others won’t take you seriously. SneakerCon is the physical equivalent of a metaverse for sneakerheads. People from all over go to SneakerCon to meet others with the same interest as them, make money, and build clout.
Another reason NFTs fit the metaverse is that many people are beginning to accumulate these digital assets. And that means these same people want to be able to show off their purchases. For instance, MetaKoven, the person who purchased Beeple’s “Everydays: The First 5,000 Days” for more than $69 million, is turning the NFTs into a digital art gallery that can be viewed in metaverses like Decentraland.
As we’ve discussed, people collect for a variety of reasons. But there’s one constant among all collectors: they want to display their collections.
Digital assets should be displayed in digital environments. Whether it’s a virtual art gallery, an online video game, your very own virtual basement hangout, or some other virtual space that we cannot yet imagine, the metaverse is where we’ll show off our NFTs.
And then there’s the utility of NFTs in the metaverse. Buying a Meebit NFT today gives you some clout, and it will go a long way 10 years from now when it’s astonishing to own something that is hardly available. But Meebits are much more than simply cute collectibles. As mentioned in Chapter 6, “Creating and Minting NFTs,” Meebits come with an OBJ file, so you have free reign to use your Meebit for whatever you’d like in any 3D environment.
We’re not far away from some of these hit video games adding an open source element to the game where you can upload your own 3D-modeled items. We can envision NBA 2K gamers uploading their Meebits into the game and using them as their players.
This brings us to The Sandbox (and their comparables Decentraland, Somnium Space, and Axie Infinity), which is a living, breathing version of NFTs meets the metaverse. The Ethereum-based virtual world allows players to explore, interact, and play games, among other activities.
Most notably, plots of LAND are bought and sold as NFTs on various market places. Once you own LAND, you can develop it however you want––whether that’s a house, a marketplace, or an application. You can lease the LAND, which is what WhaleShark (one of the largest LAND owners in The Sandbox) plans to do—leasing his LAND to artists and designers to build more value for other users in the game.
In many ways, The Sandbox is similar to Minecraft in its open nature of play. However, it differs in that it has its own in-game currency, $SAND, which can be traded on cryptocur rency exchanges, and you can actually own items in the game as NFTs. While it doesn’t have the broad user appeal of a battle game like League of Legends or Fortnite, The Sandbox nailed down the in-game economy element of the metaverse, which is highly fascinating.
Look how much our behaviors have changed in the past decade, thanks to smartphones. The average person spends upward of 5–6 hours a day on their phone. Then if you group in the time we spend on our laptops, smart TVs, or streaming services, it becomes a lot easier to count the hours that we don’t spend interacting with the Internet.
The Internet is our collective livelihood, and the evolution of the Internet is the metaverse. The same communities and areas where we spend our time on the Internet today will have a vir tual component in the near future, if not already. And with these metaverses will come in-metaverse items that we want to own as NFTs.
It won’t be absurd in the next 5–10 years to see an esports champion auction off NFTs of the weapons or items they used to win the title, in the same way that we auction off game-worn jerseys and game balls.
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