Digital assets have shaken the world of tech these days. Since everything is being digitized in modern times, it is important to explore the importance of digital assets. In this article, we’ll discuss the key differences between NFTs and Metaverse and how both of these are helping in creating decentralized solutions for new problems.
The main objective of this article is to clear the key differences between NFTs and Metaverse, as many of us encounter their application more often these days. So, let’s discuss both of these topics in detail and explore the differences.
Understanding NFTs
NFT is a shortened form of non-fungible token. This is a relatively newer class of digital assets which are based on the famous blockchain technology. These tokens are used to represent different assets which are recorded on the blockchain network. With the help of this technology, things like unique art pieces can now be converted into NFTs by assigning them a unique identity and listing them on the blockchain. The owner of an NFT can control its exposure to the market. The same can be the case with real estate properties and other valuable things as well.
One of the main reasons for the widespread popularity of NFTs is their unique nature. If you own an NFT, it’ll only belong to you, and no one else would be able to claim its ownership unless you transfer it to them by yourself.
In the comparison between NFTs and the metaverse, blockchain technology seems to be the most common factor as it powers both the NFT marketplace and the metaverse. This proves that blockchain has the potential to do much more than just support a decentralized system for cryptocurrency trading. It can help users create and own unique NFTs and trade or sell them whenever they want to. When you own an NFT, you’re exposed to all of the historic transactions related to that specific NFT.
NFTs are so unique because they are one of a kind, and you can’t interchange them with one another as all of them differ in value. This is what the word “Non-Fungible” literally means.
Use Cases of NFTs
If you want to understand the real use case of NFTs, you must take a look at a few good examples of NFTs, which are widely popular these days. For example, BAYC NFTs and Bored Apes are two good examples. This also helps us draw a straight line between NFT and metaverse when comparing the uses of both these technologies.
You can also use NFTs as proof of ownership of an actual physical asset. Once you buy and own an NFT, you’re given a certificate of ownership of whatever physical asset it’s attached to.
Accessibility of NFT Vs the metaverse is another big point for comparison. The good news is that if you want to invest in any NFT, you can easily access one of the biggest NFT collections online and make the purchase right away. There are now tons of popular NFT marketplaces all over the internet, which you can visit to buy NFTs. These marketplaces provide you with a detailed history of every NFT before you buy it. Cryptocurrency can be used to buy NFTs right away.
Understanding the Metaverse
After going through a few good points of explanation on the topic of NFTs, you should be able to tell why they are so unique and popular. However, the comparison between NFTs and the metaverse is incomplete unless you learn the same about the metaverse as well. Metaverse is here to change the way we interact with the digital and virtual world. It makes everything three-dimensional and helps make our gaming and other virtual experiences more absorbing. So, it will basically transform the way we play, attend virtual conferences and do lots of other things on the internet.
Understanding the actual meaning of metaverse can help us dig deeper and understand more about the next big revolution, which is coming with Internet 3.0. This version of the Internet is expected to have lots of decentralized apps and features in it. Lots of companies around the globe are working on metaverse and are developing great applications in virtual reality. Most of us will be able to see what metaverse has to offer a few years from now.
The biggest difference between the metaverse and NFTs is that metaverse has its own virtual world. It is simply a collection of various games, assets and other things connected with each other in a three-dimensional virtual space. The type of space you visit in the metaverse influences the type of services and experience you will have there.
All of the connected places inside the metaverse work together, and everything is interconnected. Metaverse is also backed by blockchain, which ensures interoperability amongst all the applications and things present inside the metaverse. So, blockchain serves its role in the metaverse by providing a decentralized ecosystem and by enabling secure transactions.
Use Cases of Metaverse
Although companies and developers have achieved a few great things with metaverse, we are still one step behind from witnessing the full potential of this technology. Although this platform is not fully developed yet, some applications have made remarkable progress and are loved by users around the globe. Most of the technologies developed on metaverse are used in gaming.
If you want to understand the difference between NFTs and metaverse, you must understand the basic essence and key use cases of both these technologies. NFTs can be used by players within the metaverse to trade with each other and transfer value. As we mentioned above, NFTs represent value and asset ownership within the metaverse. For example, if you own a virtual piece of land within the metaverse, it is an NFT in reality.
As the technology matures, many more features and benefits are expected to be added to the metaverse. Advertising for different products is one of the most reasonable benefits of the metaverse. Brands around the globe can use the virtual space provided by the metaverse to advertise their products and spread the word. As a matter of fact, a few of the biggest brands have already stepped into the world of metaverse advertising.
Key Differences Between NFTs and the Metaverse
Web 3.0 is the next big thing, and these two technologies are two of the biggest features that are expected to come with it. Due to the same upward trend in their popularity, NFTs and Metaverse look like two different names for the same thing. However, it is important to explore the difference between these two terms as well. Understanding more about these technologies can help us understand how they will impact Web 3.0.
Most of us explore Web 2.0 daily and perform important everyday tasks on it. However, the internet isn’t as simple as it might seem to be on the surface. For example, whatever you do on the Internet is called your data, and it is collected by centralized companies controlling various applications connected to the Internet these days. So, data privacy has become one of the most challenging drawbacks of web 2.0.
With decentralization and even more features attached to them, NFTs and metaverse are changing the Internet forever. NFTs are only virtual tokens which can be exchanged or sold for real money. On the other hand, the metaverse is a whole virtual world which can host virtual games and other applications easily.
Let’s explore some of the biggest differences between NFTs and Metaverse. These differences will help you understand the key roles and limitations of both of these technologies.
Basics
In order to understand the differences between NFTs and the metaverse, one must understand their definitions in great depth. The key difference between these two technologies revolves around the use of Blockchain in two different ways. Since an NFT is created with the help of a smart contract, Blockchain is necessary for its creation because making smart contracts is not possible without using Blockchain technology. The same technology is responsible for every NFT transaction done on the Blockchain platform.
On the other hand, the basic vision of metaverse is very different from NFTs as it focuses on the creation of a virtual world with lots of interconnected virtual reality applications.
NFTs are immutable and are very secure. While metaverse, on the other hand, focuses on creator economy and decentralization.
Accessibility
Accessibility or ease of use is another important factor we must include in the comparison between NFTs and metaverse. In this factor, we basically compare both of these technologies and see which one of them is more accessible. As of now, there are lots of platforms through which you can buy and sell NFTs easily. The sign-up process is usually simple, and all you have to do is connect your credit card or use your cryptocurrency to buy NFTs.
In the same way, metaverse can also be accessed from multiple platforms. However, while NFT marketplaces can be visited from your mobile or laptop, metaverse requires you to have a VR headset in order to access it.
History
Taking a look at the history of both these technologies is also very important in the comparison. The history of both of these technologies is very brief but contains lots of useful developments. For example, since its inception in 2017, the NFT marketplace has made huge progress. The creation and trade of NFTs suggest that more physical assets can easily be converted to NFT contracts, and every physical asset can easily be digitized. That’s because NFT can help you store decentralized proof of ownership.
On the other hand, the metaverse has multiple goals to target and achieve. It is based on decentralized Blockchain technology and aims to make almost every market better. It can also be termed as a virtual world parallel to the real world.
Impacts of NFTs on the Metaverse
NFTs have the power and potential to change how all of us interact with each other on the internet. Users can interact with each other and make decentralized transactions with the help of NFTs to transfer value and ownership.
Let’s see how NFTs can possibly impact the metaverse.
Virtual Economy
Currently, metaverse allows you to develop different applications and enjoy the benefits of virtual reality. With the help of blockchain technology, you can invite more people to the metaverse by creating virtual games and connecting the whole metaverse through blockchain technology. Most of the games present on the metaverse pay you in the form of NFTs if you play them and complete certain tasks. According to the value you add to the matters; you can earn lots of virtual tokens. Moreover, unlike traditional games, since the metaverse is decentralized, you literally own your earnings, and there is no central authority controlling the game.
In order to play games in the metaverse and earn non-fungible tokens, you will have to sign up and play different games from specific platforms and earn in-game assets. You can then trade the NFTs you earn for more valuable things within the metaverse.
You can explore multiple games available in the metaverse which use NFTs to create an in-game economy. As more people start using metaverse, the number of trades will also increase, and NFTs will keep becoming more valuable. You can also invest in NFTs and rent them out to players who want to use them for a specific period of time. This way, you can also have passive income with NFTs within the metaverse.
By renting NFTs, The players who cannot afford the cost of playing a game upfront can enjoy it and return the money they owe by playing and running in the game. This creates a balanced and fair economy for every player. You can rent NFTs from guilds in the metaverse. They allow every player to start playing play-to-earn games right away. By making NFTs easily available, these guilds are actually helping in the creation of an economy in the metaverse.
Real-world assets can also be represented with the help of NFTs in the metaverse. These tokens can then be traded within the metaverse to transfer value from one player to the other. The value of every NFT depends on its useability within its own environment. Specific game assets, like outfits and weapons, can also be made available in the form of NFTs. Players can either buy or borrow these NFTs to enhance their virtual gaming experience in the metaverse.
Since all of the metaverses are based on blockchain technology, it has the same features of immutability and decentralization. Moreover, every NFT gains its value through its useability and demand in the market. This eliminates any possibility of pumps and other frauds.
Different exchanges participate in NFT airdrops and sales on a regular basis. This provides every player with a fair chance to explore and enjoying metaverse-based games earlier than other players. These NFTs can also be sold in auctions for cryptocurrency.
Real Estate in the Metaverse
Metaverse can also help you with real estate virtually. For example, you can sign a smart contract in the form of an NFT, which represents a piece of land in the real world. With the help of blockchain technology powering the metaverse, you can always prove, with the help of your NFT, that you are the real owner of that specific real estate.
With the help of NFT-based real estate in the virtual world of the metaverse, you can also rent away your property, resell it or buy new properties in the form of NFTs. Singers can also do concerts in the metaverse and sell virtual tickets to their concerts as well.
This is how virtual real estate can help change the digital landscape forever with the help of NFTs and metaverse.
Conclusion
The key takeaway of this comparison is that, while both the NFT marketplace and the metaverse might look the same, they are very different from one another. However, one of the fascinating common things between these two technologies is decentralization and Blockchain. In addition to assets in the virtual world, NFTs can now also be used to link with real-world assets and can be traded in the metaverse to transfer value.
Metaverse is changing how we surf and use the Internet daily. It aims to convert all of our games and most of the market places into three-dimensional virtual reality. With the help of this technology, brands can now make advertisements in virtual reality, and auctions can also take place virtually.
Although both of these technologies have lots of potential in them, they are still far from reaching their real potential even today. Together, NFTs and the metaverse have the power to change our online interactions and trading forever.
One of the key aspects of both of these technologies is the use of Blockchain in them. Blockchain enables decentralization and transparency on every virtual platform. So, no matter how advanced the NFT marketplace and the metaverse get, it’ll have to adhere to its basics of decentralization and transparency to remain relevant.