Demystifying the Metaverse, NFTs and other crypto assets
That’s the power of Metaverse, a universal virtual world made up of 3D virtual spaces based on social connection. The technology interests millennials and Generation Z, who are tired of static internet sites and social media platforms.
After experiencing AR (Augmented Reality), VR (Virtual Reality) and MR (Mixed Reality), they are more excited about the 3D virtual world that provides real interactions and interesting images. The Metaverse transports them to a fully alive and interconnected world.
Recently, Facebook rebranded itself as Meta and brought the technology to the mainstream by hiring 10,000 people. By creating a metaverse infrastructure, the company intends to transform itself into something futuristic.
Through the immersive world of Metaverse, users spend time socializing, learning, working, and entertaining, among other things. It is a mix of AR, VR and MR. It has gaming, crypto and social media components built into it. For example, Metaverse allows its users to play online games in different avatars. Through VR headsets, they can enjoy an immersive experience that is visually delightful.
Non-Fungible Tokens (NFTs)
NFTs are digital products such as art, music and videos that can be traded using blockchain technology. Because they are non-fungible, unlike crypto-tokens, there is only one original of an NFT.
NFTs are different and have unique identification codes. This is in contrast to most digital goods, which are usually unlimited in supply. Removing the stock should ideally increase the value of a given resource due to its popularity. But in the early days, many NFTs were digital creations that existed elsewhere. For example, famous video clips from NBA games or secured variants of digital art circulated on Instagram.
Although NFTs have been around since 2014, they started making news in 2021 when online auction site Christie’s saw a $69 million NFT for a digital creation titled “The First 5000 Days” by artist Mike Winkelmann aka Beeple. They also started making a buzz in the music world when artists like Kings of Leon, Shawn Mendes and Grimes released songs in the NFT format.
Since then, NFTs have made their presence felt everywhere, including in the gaming industry. Even something as intangible as a tweet by Twitter co-founder Jack Dorsey was sold for over $2.9 million in 2021.
It was his first ever tweet posted on March 21, 2006. Dolce & Gabbana and Nike have designed clothing and footwear that come with their own NFTs.
The global NFT market size is expected to grow from $3.0 billion in 2022 to $13.6 billion by 2027, at a compound annual growth rate (CAGR) of 35% from 2022 to 2027, according to ReportLinker.com.
But the question arises: Why are people eager to shell out millions of creations they can easily screenshot or download? That’s because an NFT allows the customer to own the unique item. Moreover, the creation also has a built-in authentication that provides ownership validation.
Crypto assets
These are digital assets that use blockchain ledgers to facilitate transactions. They use cryptography, shared networks and distributed ledger technology (DLT). They can have various roles and functions, including being used as a trading mechanism, a method of storing value or for other business uses. In terms of operation, cryptoassets are not dependent on a national/central bank or government.
Common crypto assets include:
Cryptocoins:
This is a digital unit of value and a popular form of crypto-asset used to send and receive payments as well as international money transfers easily. They are extremely affordable, effective and faster than traditional methods.
India is gradually opening up to the idea of accepting cryptocurrency as a legitimate payment method. A Bitcoin trading site Unocoin, allows users to buy coupons from over 90 brands via Bitcoins.
Unocoin’s registered users can use Bitcoin worth anywhere between Rs 100 and Rs 5,000 to redeem these coupons and buy anything from brands like Domino’s Pizza, Baskin Robbins, Himalaya and Prestige.
Digital currencies such as Monero, Zcash and PIVX allow their users to make financial transactions that are 100% private and anonymous. This means that individuals have the freedom to maintain privacy without having to reveal the reason for sending or receiving money.
Utility Tokens
Utility tokens allow users to transact within a particular ecosystem. For example, the BAT token is a utility token that allows users to transact on Brave Browser.
Like all crypto transactions, Utility token transactions are verified on blockchain ledgers. The supplier of the products or services supplies tokens that must be used within the supplier’s network.
Security Tokens
These are digital, liquid contracts for parts of an asset that have value, such as real estate, a vehicle or company shares. The use of security tokens means that the investors’ stake is safely preserved on the blockchain ledger.
Some examples of security tokens include Siafunds (used on the Sia Network for revenue sharing) and BCAP tokens (these are Ethereum-based digital smart contract tokens launched in 2017).
Security tokens are usually sold or auctioned in an Initial Coin Offering (ICO) or an Initial Token Offering (ITO) that allows organizations to raise money to fund an idea. The business offers security tokens in return for government-issued currency or other crypto-assets.
The security token also provides additional benefits such as voting rights, benefit sharing or profits.
Web3 is another technology that has evolved over a period of time. Born out of a lack of trust in the internet, Web3 is the answer to unfaithful social media platforms where you can’t keep anything private.
This next generation internet allows users to create, control and own their identity. With better tools, Web3 will allow users and companies to create unique content. It will enable intelligent creation tailored to each user.
This will give rise to content distribution platforms that help make Web3 profitable.
Moreover, personalization would make room for more content interaction, thus allowing brands and their audiences to find new tools for co-creation. As these new technologies continue to transform various industry sectors, it’s an exciting time to see their impact on the future of businesses.
