Non-fungible tokens (NFTs) are extremely popular. Also, the metaverse is increasingly becoming the trend among investors and game players because they create a unique platform through which humans can interact with the virtual technological space built sometimes on the blockchain. This interaction and the value that could be derived from it is the issue to be discussed in this post.
The concept of the metaverse is intriguing. This is why many people are participating in it and tokens associated with these metaverses have continued to soar in value since the beginning of 2021. What are metaverses and what are the NFTs that drive them? Why are they considered virtual real estate and how are people benefiting from the metaverse NFT concept?
What is A Metaverse?
The metaverse is the virtual world that can be created in the computer. It originally started as a gaming concept in which game lovers access modules that enable them to move from one stage of a game to another.
However, with the concept of play-to-earn, the metaverse has grown from the idea of a place where people who are mostly interested in playing games congregate to become a virtual real estate where investors can buy, sell or rent choice properties or assets.
In essence, a metaverse could comprise a gaming or an investment concept or both. This implies that the gamers can play to earn by collecting valuable tokens known as NFTs or non-fungible tokens, while the investors can actually invest in valuable virtual real estates.
What is An NFT?
Tokens such as bitcoin, ethereum and litecoin are fungible. This means that one of these tokens can be exchanged for another of the same token. For example, one bitcoin can be exchanged for another since they have exactly the same value.
However, there is another class of tokens that are non-fungible. This means that each of these tokens is unique in its own way and cannot be exchanged for another or similar token. This is the concept on which NFTs are built. These are essentially tokens that are individually unique in every way.
A non-fungible token can be built into a blockchain in a way that ensures that its origin, ownership, rarity and uniqueness can be measured in a way that determines its value. Each unique token is special in its own way. These are some of the determining factors that bestow value to a non-fungible token or NFT.
NFTs have found use in a lot of cases such as in certification, art, music and gaming. There are more applications but what is common with all NFTs is that each token is completely unique and hashed into the blockchain. It is also traceable to a creator or owner since they are registered on the blockchain. They can also be transferred from one owner to another.
How Does An NFT Drive The Metaverse?
In reality, we can say that a metaverse is a virtual world created in a machine such as a computer. However, what makes the metaverse peculiar is that it enables human interaction with the metaverse.
Metaverses can be monetized using non-fungible tokens. For instance, a gaming metaverse can be designed in a way that enables play-to-earn, in which the player earns NFTs as they make progress in the game.
Why NFTs Are Considered Virtual Real Estates
Metaverses are evolving so that users can invest in assets such as land, buildings and other forms of assets which constitute virtual real estates.
NFTs are generally considered to be unique collectibles that many collectors desire to own because some rare ones can be quite valuable. Consequently, the demand for these NFTs can be quite high.
According to data available at DappRadar, in 2020, $100 million worth of NFTs were sold. This increased to $22 billion in 2021. We should expect the demand for this class of tokens to continue to rise as more investors and collectors become aware of it. This is even more likely with big players such as Microsoft and Facebook looking to share in the Metaverse market.
How To Benefit From The Virtual Real Estate
There are several Metaverse projects that their NFTs have appreciated up to 1000% in the past few months. There are others that have the prospect of gaining value over time despite the fact that they are new. To benefit from this concept, the investor has to study the NFT market and invest in those that have good prospects. Some of the criteria for selection are:
- The rarity of the NFT
- The antecedence of the team behind the NFT or metaverse project
- The amount of work that went into building the project, etc.
What is obvious is that NFTs have come to stay. Some Metaverse projects would continue to grow in value over time. So the investors that benefit are those that invest in viable virtual estates such as land and houses built in the metaverse. Here is one of the best platforms to invest in NFTs and metaverse tokens.