NFTs – a hoax or the foundation for creating value in the Metaverse and Web 3.0?
With the ability to prove and authenticate ownership of digital possessions, NFTs could very well be the financial foundation of the future metaverse and the evolving Web 3.0. Learn about it now, harvest the benefits, and be aware of the pitfalls.
By now, you have probably heard of the Bored Ape Yacht Club or how the founder of Twitter, Jack Dorsey, converted his very first tweet into a non-fungible token (NFT) and sold it for an astonishing 2.9 million dollars.
Why would anyone of a sane mind pay that amount for a digital image that anyone can find and copy for free on the internet? That is the question a lot of us mortal people have asked ourselves while standing on the platform watching yet another opportunity to get rich fast blast past us.
Three digits short
“It’s a Ponzi scheme,” we tell ourselves, and we are not going to be the fool at the bottom of the pyramid. And to a certain extent, perhaps we are right. The buyer of the first tweet recently put it up for sale expecting a price of $50 million. Within a week, the highest bid was $280 – yes, two hundred and eighty dollars. Period. Bids have since then gone up to around $50,000 – but still three digits short of the expected price and light-years away from what he paid for it.
So, are we right to stay away? Well, the price of the Bored Ape Yacht Club NFTs keeps going up and the NFTs are currently traded on the OpenSea platform for around $390,000. But those NFTs also give you membership to an exclusive club of millionaires. The main benefit might be that you can flash your membership to other millionaires, but at least you get something that resembles some sort of value.
A sticker of one of the NFT’s sold by Bored Ape Yacht Club
NFTs reduce fraud
So why do you need to know all of this if the get-rich-fast-train has already left the station?
“Bear in mind that we are still in the very early stage of web 3.0 and 98 percent of the population has never heard of NFTs. When we look back 10 years from now, the whole decentralization of the internet which the blockchain supports will be one of the biggest transitions in the history of the internet,” says Jesper Lehrmann, strategic advisor, Virsabi.
He expects that we will use NFTs to validate future transactions.
“It is a revolutionary way of using blockchain technology to authenticate your digital possessions. It can help us reduce fraud and enable safe and effective transactions on the internet, and it can very well be the foundation for trade and transaction when the internet becomes the metaverse,” he says.
Proof of ownership of all things digital
The very short explanation of blockchain is that you add a unique string of data to a digital asset and every time the asset changes hands, you add another string. That way you can always identify the origins of that specific item.
When the internet becomes the metaverse, chances are that we will trade even more digital objects in different ways. And with NFTs you can suddenly get proof of ownership over not only a digital token like Bitcoin or other cryptocurrencies, but also a digital space, a digital art piece, digital furniture for your digital showroom or – well, better ideas will evolve as the metaverse unfolds.
All about authentication
Cryptocurrency – like physical money – are fungible, meaning that you can exchange one for another. If you have two Bitcoins, the two tokens represent the same value. But if you have two pieces of art, they can be of very different value and thus non-fungible, basically meaning that they are worth what someone is willing to pay.
But the point is not about the value.
“The point is all about authentication and proof of ownership. For example, a concert ticket is easily verified and transferred between owners if needed. Looking into the future, we will increasingly live and interact in a digital universe or metaverse. It will become important for us to have NFTs to authenticate our identity and personality in the digital space. The art in our virtual homes, our furniture, and the clothes we wear are digital assets which will have NFTs attached,” Jesper Lehrmann says.
At Virsabi, we are specialized in creating NFT assets and strategies. Contact us for more information.
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