NFTs Are Inextricably Linked to the Metaverse, and There's No Way Around It

In late 2021, the global market for non-fungible tokens hit $22bn. There's been a lot of talk about why NFTs have grown in popularity, and whether that rise in popularity is a great thing. Everyone's had their opinions about NFTs being a bubble, and both sides of the divide have written probably thousands of posts to prove their point.

But one hard fact remains — the popularity of NFTs continues to grow, and that growth doesn't seem like it's stopping anytime soon.

Last year, as people were reeling from the effects of the coronavirus pandemic, Mark Zuckerberg released a video that announced the company's new direction.

Facebook, a company that had been the poster boy for 21st-century tech success, announced that it was looking beyond the current social media climate and was investing over 10 billion dollars into building a metaverse.

That metaverse, argued Zuckerberg, was the future of social media and the internet. Since the metaverse would be the future, Mark said, his company would be betting on that future by being the first to truly create the infrastructure of the meta-universe.

It's easy to scoff at Mark and argue that the metaverse is certainly not the future. But it would be instructive to note that Mark, for all his awkwardness, has been incredibly intuitive about the future and direction of tech.

While Facebook wasn't the first social media network (MySpace was created a full year before Facebook), Mark was still one of the very first people to think about creating a social media ecosystem. He also recognized the potential of Instagram when it was at a measly 50 million users, and did the same with WhatsApp in 2014.

So, he probably knows his shit.

With Mark announcing that Facebook was going in the direction of the metaverse, the NFT community suddenly found itself sitting on what closely resembled a gold mine.

Ever since the idea of NFTs got popular, it's faced some pretty stiff opposition. There were (and are) a lot of people who simply said that NFTs were a bubble, and would die off like the Tulip bubble of the 17th century.

But with Facebook going into the metaverse, the NFT community suddenly found itself on the cusp of glory. There was no longer any need for complicated explanations about how NFTs could revolutionize digital assets and ownership. The virtual world called the Metaverse would need virtual assets, and what better way for those assets to exist, than as non-fungible tokens.

Keys, Not Art

With the metaverse opening up, NFTs suddenly took on a new reality. They were no longer weird pictures whose ownership could be validated on the blockchain.

They were now keys, not art. The common mistake that a lot of people make when talking about NFTs is that they see the image of the NFT itself as the NFT when it's not.

That's why it's common for people to take a screenshot of an NFT and then argue that they have simply gotten one through a screenshot.

A clever troll might even argue that they've just acquired for free what many others pay thousands of dollars for. That argument, of course, would be reasonable if the NFT was the art.

But NFTs aren't art — they are keys. That's why they will be so valuable in the metaverse. For example, owning certain NFTs, like a Bored Ape, can give you access to an exclusive community of people that you might not have access to otherwise.

Right now, Bored Apes sell for upwards of $200,000, and some even sell for upwards of a million dollars. People who have enough money to buy an NFT asset worth a million dollars are definitely in the top 1%, and having a Bored Ape can give you a key to that exclusive club.

In the real world, people pay through their noses for access to these communities. Country clubs, gated communities, and even loosely defined "luxury" communities cost a lot of money to get into. NFTs would simply replace those communities in a truly digital world.

Of course, this use-case might not be the most ideal for the so-called NFT philosophers. But as we all know, technology can be used in a lot of different ways, and one of those ways is certain to annoy someone somewhere. The great thing about decentralization is that the opinion of someone somewhere matters very little on the blockchain.

Asides from being used as keys to access certain communities and benefits, NFTs can also be used as avatars for signaling. That is, having a certain kind of avatar in the metaverse may signal to others what type of person you are, and what sort of things you believe in.

This will make it easier for online communities to grow, and would generally give people a less acrimonious experience in the metaverse.

There's also the issue of NFTs existing as property. There's already a company called Metamall developing virtual retail shops to sell NFTs as actual virtual property. These NFTs can be designer bags or even Adidas shoes — the possibilities are endless.

NFTs can also be virtual real estate too. If you want to build a digital house, for example, you'd need land to set it on. And that land would be an NFT. Right now, an interesting startup named Witly is working on bringing all the real estate in the metaverse onto a single platform.

The Future With NFTs

NFTs aren't the only thing that has had some bad press. The metaverse itself, despite its Incredible potential, has also been under attack.

There are still many people who argue that the metaverse would turn the world into a dystopia reminiscent of something in the hit animated movie: Ready Player 1.

But criticism like that rings hollow when almost everything the metaverse provides already exists in today's world. The only difference is that the metaverse will be a lot more immersive.

Instead of streaming a concert, you'd be able to attend it live. Instead of video calling, you'd be able to have a highly realistic meeting. Instead of entering random group chats, you'd be able to walk around and meet people.

Instead of going live on Instagram, you'd be able to have a press conference from your couch — and you'd be wearing decent clothing too.

There's no future where the Metaverse and NFTs would turn the world into a dystopian nightmare. If greater interconnectivity would make people glued to these platforms 24/7, and allow the world all around them to fall apart, it would have happened already.

We currently enjoy lightning-fast internet, and ultra-competent smartphones that can process information faster than one can say "dystopian wasteland", and that wasteland is yet to arrive.

Perhaps that's the sign we need that this talk of a dystopian future is merely a myth.

Deja Vu Of Doomsday Predictions

Interestingly, the metaverse and NFTs aren't the only new technology that people have made fantastical predictions about. In 1968, an engineer at the Advanced Computing Systems Division of IBM asked what the microchip would be good for.

If that reminds you of people asking about the use case of NFTs, well, what can I say?

Ken Olsen, in 1977, argued that there's absolutely nothing anyone would want a personal computer for. According to Andrew Grove, the CEO of Intel, the idea of phones that can fit into your pocket was nothing but a pipe dream driven by greed.

And perhaps the most popular and wrong prediction of all time was made by esteemed economist Paul Krugman when he had this astounding monologue to say about the internet;

"The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law' -- which states that the number of potential connections in a network is proportional to the square of the number of participants -- becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

Paul had this to say in 2006, two years after Mark had already started Facebook, no less. It's been said that history doesn't repeat itself, but it often rhymes.

Top image courtesy of freepik.com