Fewer technologies are getting as much buzz as the NFT and metaverse. They represent a technological trend with enormous potential for businesses and users. You would often see the two words being used together or alone in the news or information about virtual worlds. Despite their popularity, people still ask many questions about them, such as what is metaverse?, and especially how the two concepts relate and influence each other and if they will evolve our digital life experience.
In the following, we will learn about NFTs and the Metaverse and how they combine to make concepts like virtual worlds work. Comparing metaverse vs NFT, there are many differences between metaverse and NFTs, as we will also show in this article. Let’s start with the definition of each concept.
What are NFTs?
To compare metaverse vs NFT, Non-Fungible Token, are a unique class of assets that rose to popularity in 2021. Led by popular NFT projects like the Bored Ape Yacht Club (BAYC) and CryptoPunks, NFTs, and celebrities like Snoop Dogg, NFTs became mainstream. Also, the sales of many NFTs for millions of dollars also drew more attention to them. Since then, the space has expanded to a multi-billion industry. According to an estimate, the NFT market will be worth over $211 billion by 2030.
NFTs provide certificates of ownership that exist on the blockchain. They come alive when a digital file (commonly an image, video, or GIF) is minted in a blockchain. Thus, a certificate of ownership and originality is generated via cryptocurrency (mostly Ethereum) and traded to the new owner. Comparing metaverse vs NFT, Non-Fungible Tokens also contain smart contracts, which gives them their unique traits and functions.
Smart contracts improve the security of NFTs and prevent the NFT’s data from being copied or replicated. All the data related to minting, transactions, and owners of an NFT are recorded on the blockchain it’s built on. If we ever see NFTs integrated into copyright law, they may also serve as evidence against the misuse of digital goods.
An Overview of the Metaverse vs NFT
The Metaverse is defined as a digital 3D world that provides users with a great experience using a virtual reality headset. In this virtual world, users have a body or an avatar they can customize, interact with the virtual world, and buy and develop virtual real estate. In Comparing metaverse vs NFT, the Metaverse is a mix of virtual and augmented reality, blockchain technology, micropayments, and entirely new ways of doing things, such as playing games and interacting online.
The metaverse market has grown tremendously since it became popular when Facebook rebranded to Meta Platforms. In 2022, an estimate put the market value of the metaverse at $47 billion, expected to climb to $678 billion by 2030. The industry gained traction again at the start of 2023, with major companies announcing plans for the metaverse. Several key sectors have transitioned into the metaverse or found a way to take advantage of the technology. Government agencies are included with countries building embassies and ministries in the metaverse.
The decentralized nature of the blockchain used in a Metaverse offers the prospects for unlimited business opportunities and social interaction. Metaverse offers highly versatile, scalable, and interoperable digital environments. Furthermore, the Metaverse combines innovative technologies with interaction models between participants from individual and enterprise perspectives.
To compare metaverse vs NFT, The Metaverse can deeply evolve our experience of digital life. In a 3D world, we can visualize and interact with any object without putting in much effort and time. We can cycle between activities, chats, locations, and data with a simple gesture. Instead of switching between apps and browsing different web pages, the Metaverse makes everything connected and accessible digitally.
The connection between the Metaverse and NFTs
Proponents of the Metaverse believe an alternate reality that runs parallel to the physical life is possible. The metaverse is the closest we have gotten to that happening. The metaverse functions like the real world in that users, represented as virtual characters, can attend sporting events and concerts, go shopping, play games, interact with others, etc.
However, living in the metaverse, like the physical world, doesn’t come for free. For example, people will probably have to pay to attend a concert or build and decorate a house in virtual lands. The major problem isn’t paying for these things but maintaining trust and preventing ownership issues in the metaverse.
The answer is, you guessed it, NFTs. We already see NFTs used for trading digital art and know that NFTs can theoretically be connected to any objects in the physical world. So, instead of using traditional money to assign value to objects in the Metaverse, NFTs will be used to designate value.
Therefore, NFTs serve as a framework for attributing value to digital objects and can be used to prove the ownership of a specific object. For example, NFTs can help verify that someone owns a piece of real estate in the Metaverse or that they have the right to attend a virtual concert. Besides, NFTs are already used as rewards in many games in the Metaverse.
But that doesn’t mean NFTs will replace virtual currencies in the metaverse. Comparing metaverse vs NFT, Most metaverse platforms have native tokens that users trade, exchange, and earn as rewards. So, for example, if you’re looking to invest in Decentraland’s Metaverse, you can use MANA, Decentraland’s native token, to purchase a piece of land or go to a concert.
Reasons for comparing Metaverse vs NFT
We already understand that NFTs help to maintain trust and security in the metaverse. Thus, they must be used together to create a functioning virtual world. It is important to also add that NFTs’ features make them important in the Metaverse. The following list explains some of those features to compare metaverse vs NFT:
NFTs are integral to metaverse games
Most metaverse platforms like The Sandbox started as gaming worlds where users can play and create games. Even though some of these platforms have expanded to include other functions, games still remain an active part of its ecosystem. Games like Axie Infinity depend on the blockchain to operate. These games heavily rely on NFTs to function properly. For instance, most in-game assets, such as characters, skins, avatars, and resources in the games, are NFTs. Likewise, gaming platforms use NFTs to incentivize the gaming experience for players on their platforms.
Both NFTs and Metaverse depend on digital ownership. To compare metaverse vs NFT, Metaverse uses NFTs to give users access to their digital avatars to have unique ownership. Without NFTs, there might be no way to attribute value or uniqueness to an avatar since many copies of it may exist. Also, through NFTs, PFP NFTs, and virtual wearables, holders get to bring their NFTs to life. For instance, BAYC NFTs come alive in OtherSide, the same way CryptoKicks holders can customize their avatars with the Nike virtual sneakers.
Events in the Metaverse, like live concerts, music festivals, or game launches, use NFTs to give tickets to the audience. These tickets are minted on the blockchain to improve access and track ownership. They are also used to provide exclusive benefits to attendees at these events.
In the Metaverse, especially in gaming, NFTs are used to buy and sell accessories and collectibles such as skins or lands. With the rise of active users in the metaverse, demand for digital collectibles and accessories has increased. Fashion brands like Nike now offer virtual wearables to users in the metaverse. These virtual wearables are NFTs minted on the blockchain, which users can sell, rent or keep as assets.
Will NFTs remain relevant in the Metaverse?
NFTs are a key component in the Metaverse ecosystem. In many ways, the rise of the metaverse is heavily influenced by NFTs. For example, OtherSide – a top metaverse project – owes its tremendous rise to the BAYC NFT collection. In the same way, many NFT projects have driven the use of virtual objects within the metaverse. Most importantly, NFTs allow users to enter the Metaverse and experience and interact with the digital world.
Unique characteristics of NFTs, such as smart contracts, also help boost industries within the metaverse, such as virtual real estate, live concerts, etc. Therefore, for the Metaverse to be fully functional, it must integrate NFTs into its ecosystem. It could also be a way to control access to the platforms through NFT-controlled access.
NFTs are also one of the ways through which metaverses market their platforms and gain more users. They could airdrop branded merchandise or special access privileges to followers to create publicity. As well as fan engagement, NFTs could further introduce interoperability outside the Metaverse with infrastructure supporting location-based engagement and augmented reality features. So, it is evident that metaverse vs NFTs are fully compatible.
Where can NFTs be used in the Metaverse?
Per NFTs’ nature, they can be used to represent any physical item on the earth. Comparing metaverse vs NFT, the metaverse is a virtual world parallel to the physical one we live in. As people use the metaverse more, there would be a need to transition items in the physical world to virtual platforms. Here, we provide a short list of where NFTs may fit in the Metaverse.
Apps like VRChat are developed to allow VR communication, which enables the possibility of trading digital goods used in the metaverse. Sellers can easily provide links and previews to assets on the web or mint assets directly in the VR landscape. VR and NFT marketplaces can also appeal to many brands in various industries. Some companies, like Nike, have already set up virtual stores in the metaverse.
VR is the best for viewing art. Users get to see it up close with every detail, and from every angle in an environment where the prices are already set, the assets are all of one type, and the atmosphere is much more relaxed. Many museums are currently placing NFT artwork in Metaverse, such as Сryptovoxels, powered by the Ethereum blockchain.
Like the physical world, real estate can be applied to the Metaverse as a money-making industry. Digital land and territories live in Metaverse that can be partially or wholly sold for further user development. For example, Decentraland is a virtual territory where plots of land can be sold as NFTs, and everything is represented in 3-D.
Final Words, Metaverse vs NFTs
Experts say that the numerous potential associated with the NFT Metaverse combination will transform the future. As NFTs bring ownership and uniqueness, the Metaverse creates a virtual world where everything is possible. The combination of these two worlds would change the economy and social experiences.
However, most users still need to learn about the possibilities NFTs and the metaverse hold. To most, NFTs are merely JPEGs that sell for millions. But with the metaverse, it is evident that NFTs are capable of much more. Nonetheless, NFTs and Metaverse would open up a broad range of opportunities. Get ready for the big evolution!
FAQs about metaverse vs NFT
NFTs, also known as Non-Fungible Tokens, are digital assets stored and secured on the blockchain. They have many features which make them unique and different from other assets. The most common NFTs are PFP (profile picture) NFTs used on social media platforms.
What are metaverse vs nft difference?
NFTs and metaverse are different. However, they both run on the blockchain and also function together. The main difference between metaverse and NFT is that while metaverses are virtual worlds, NFTs are assets used in these virtual worlds. So they both function to make virtual reality possible and immersive for users.
Most metaverse platforms have native marketplaces where users can buy in-game assets such as avatars, collectibles, or virtual land. These same NFTs are often up for purchase on secondary NFT marketplaces such as Opensea and Blur.
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