NFTs: The future source of income on the Metaverse

For investors anywhere keeping up with news in business and investments, it is inevitable that you have come across news on cryptocurrency, NFTs, and the Metaverse. With the cryptocurrency market being the hottest new trend and still on the rise, it is impossible as an investor for you not have heard of it already. 

Cryptocurrency has entered the market and is massively changing everything in the investing world.  On top of this, it has huge economic momentum which will undoubtedly effect the everyday lives of people all around the world in a matter of years.

In this article, we will provide an understanding of digital assets like NFTs and the virtual world that we call the Metaverse. This will help you get ahead of this trend and understand a market that is about to influence everything.

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What are NFTs?

NFTs (Non-Fungible Tokens) is a type of digital asset that function on the Blockchain system, much like cryptocurrency. However, the interesting thing about NFTs is that it has an additional feature that makes it impossible to duplicate or to substitute one NFT for another. Each NFT is unique.

For example, if we compare NFTs to our physical world, NFTs are like land, the Mona Lisa painting, a song, or a movie. There is only one of its kind. In the digital world, NFTs can be considered as artwork as well, in the form of a “digital painting” from a particular artist. If you purchase a digital painting or an NFT is any other form, you can indicate that you are the only owner of this NFT. Even if others copy your NFT, you would still be the owner of the authentic NFT.

Once you are in possession of an NFT that you have bought or earned, you are able to sell and transfer ownership of this NFT on the blockchain system. The buying and selling of NFTs and this transfer of ownership can be done freely on the system.

An advantage of buying and selling over blockchain is that every activity and transaction is recorded on the blockchain in a way that cannot be altered or edited. This makes the system incredibly difficult to hack, since any hacker trying to alter a block of information on the chain would have to alter every block on the chain accordingly due to the interconnectedness of one block with another. 

This system that records all transactions means not only is the owner of every NFT known, there is also a public record of all the previous owners of every NFT as well. Therefore, this is exactly why transactions on the blockchain are considered incredibly secure. The security and safety that the blockchain system is able to provide, along with its ability to store information is precisely the advantage of this system. This means that future transactions for generations to come will be fast, efficient, and safe, and it won’t require an intermediary.

Fungible assets work like cash. For example, you can take the $100 you have in your wallet or bank account and trade it for $100 anywhere else. The value of what you receive will be exactly the same– $100. This is exactly what makes a currency “fungible”. In essence, a fungible asset can be exchanged and substituted. This is precisely why NFTs are “Non-Fungible Tokens”. They are unique, and one NFT will not be interchangeable for another the way $100 can be exchanged for another $100.

What is the Metaverse?

The Metaverse is technology that brings the physical world and the digital world together into what we call the “virtual world”. The metaverse is able to merge objects between these worlds and create interconnectedness between them. Real world activities can be performed through the metaverse with high speed internet like 5G.  

By combining both AR (Augmented Reality) technologies such as creating Avatar characters that represent your own being within the Metaverse, and VR (Virtual Reality) such as simulating 360-degree virtual reality images, the Metaverse is created where humans are transported into the virtual world where they can communicate, work, and perform other activities.

Activities on the metaverse create a strange and new way for us to experience things in our lives. The metaverse is almost like another world where you can freely do whatever you want with no rules or boundaries.

For example, you can play Call of Duty or Fortnite as if you yourself are in the game taking in the atmosphere in the middle of the battlefield. You can even invite your friends to a concert, watch a film, sit and work together, or even party together without having to worry about crowds or covid risks like in the real world. The metaverse, and the growing ability for us humans to interact in this way will continue to gain influence in the world and in our everyday lives.

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Why are NFTs the next big source of income on the Metaverse in the future?

 Technology of the metaverse is about to influence industries as well as our daily lives. Even William Quigley Co-Founder of Tether and Worldwide Asset eXchange (WAX) commented that the metaverse would have huge economic momentum that will change the way we live in a matter of years.

The metaverse, from the perspective of Quigley, is a virtual world on the internet where people can create avatars and interact with things, whether it's digital assets or even a something tangible. Its growth occurs through AR and metaverse technologies that are constantly being developed as a result of improving blockchain technology.

All of this reflects how fast this market is really growing. It is not just something for the mass-market. Consider this, artists don’t just throw away original artwork. Rather, collectors and investors alike are turning their interest towards digital assets due to its exponential growth trajectory.

The interesting thing about NFT artwork is that anyone can be an artist when it comes to NFTs and they have the ability to sell their art to anyone that is interested or that may be an art collector. In addition to creating opportunities for art collectors to to find artwork that has been licensed correctly, it also opens doors for new artists entering the industry and provides them with a platform where they can create and share their work. 

However, it remains difficult to predict the affect of NFTs, but Quigley as well as other investors interviewed at Bloomberg are confident in its future. The monetization model in metaverse is based on NFTs. Right now, with regards to video games, the main source of revenue comes from the sale of in-game items, which is a virtual item. This has generated a profit of $1.75 trillion for the industry, and in the metaverse it would be worth even more. A game today is not simply just a game– anything can generate money.

Conclusion

All in all, it is still difficult to predict the kind of changes the metaverse, cryptocurrency, and NFTs will bring, and the extent of its use in the system. But the one thing that is clear, is that this is state of the art technology that is stable and safe.

Working with it may be a challenge in the beginning, but it will definitely shake up the world of business and investing.