How does NFT build a future metaverse?: NFT allows Metaverse to exist in an open, trustless form, and to achieve decentralized ownership.

 Metaverse, also known as "virtual world" or "meta universe", is regarded as a new digital form, and at the same time or will become the technological basis for the operation of the future world.

In 2017, with the rise of the CryptoKitties craze, the NFT field created a new way and attracted a large number of followers. In recent years, with the continuous improvement of the NFT infrastructure and the increasing number of project use cases, in the next 10-15 years, NFT may become a trend that will shape the world and spread to all aspects of society.

What is Metaverse?

According to Wikipedia, Metaverse is defined as "a collective virtual shared space created by the fusion of virtual augmented physical reality and physical persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet."

Metaverse consists of two parts: "meta" and "universe". Therefore, it is not difficult to understand that Metaverse can actually be regarded as an extension of our current existence, and is usually used to describe the concept of future iterations of the Internet.

This is another virtual world parallel to our physical world-a world that we can freely access through the Internet and compatible hardware devices and interact in it. In this digital world, anything we can imagine can exist. In this shared virtual space, people can be seen as a digital avatar, and the virtual world will continue to grow and evolve according to the decisions and actions within the society.

Metaverse is the bridge between reality and virtuality. It can expand our vision, sound and touch, integrate digital objects into the physical world, and allow us to enter a fully immersive 3D environment at any time. This series of technologies are collectively referred to as eXtended Reality, Extended Reality (XR). Industry insider Eric Elliott once predicted that Metaverse will one day bring huge economic benefits, and even grow to 10 times the current total value of the global economy.

Main features of Metaverse

Metaverse has four main characteristics, which are also the reason why Metaverse can gain recognition and move towards the general public.

• Highly social: Metaverse can transcend space limitations and share the "physical" environment with people all over the world. This will profoundly change the way we communicate and interact with each other. The world provided by Metaverse is a breathing and living parallel reality that can provide services to all the inhabitants of the world continuously and in real time. It has huge scalability, enabling hundreds of millions of virtual characters to coexist at the same time worldwide.
• Persistence: Metaverse will never be suspended or stopped, but will last indefinitely. In this world, people can evolve for years or decades without worrying about losing roles and achievements. Metaverse is not limited by hardware. From computers to consoles to mobile phones, everyone can interact in Metaverse with different types of devices.
• Interoperability: Metaverse uses open source code and encryption protocols to provide unprecedented data, digital items/assets, and content interoperability in every experience. From the perspective of motivation, the skin of Fortnite can be used to decorate guns and gifted to friends via social media. Metaverse can make the digital world a shopping mall, each store can use its own currency, and is equipped with a proprietary universal ID card.
• Economic benefits: As a digital species, we will witness our further transformation in Metaverse. In the future, Metaverse may be regarded as a legal workplace and investment tool, and will provide rich content and become a vibrant emerging community. Metaverse will be available for users to create, invest, own, lease, sell or buy services, just like in the real world.

The importance of metaverse

Although Metaverse is not as fantasy as depicted in science fiction and film and television works, it has the potential to become a new computing platform and content medium, generating trillions of dollars in value. Metaverse is expected to become the gateway to most digital experiences, a key component of physical experiences, and even provide job opportunities in the virtual field.

Today’s Internet has no “owner”, but almost all leading Internet companies are among the 10 most valuable listed companies in the world. If Metaverse can become a key participant in the Internet system, its value and benefits will be self-evident.

In fact, Metaverse can indeed serve as the "successor" of network functions-greater coverage, longer time spent, more business activities-the economic advantage may also be greater. In any case, the opportunities created by Metaverse should be similar to those created by other networks-new companies, products and services will appear one after another, including payment processing, identity verification, recruitment, advertising delivery, content creation, security and more. This also means that many existing or traditional businesses may be replaced by Metaverse.

More broadly, Metaverse will change the way modern resources are allocated and monetized. Over the centuries, with the decline of the labor market and the real estate market, changes have taken place in advanced economies. Under the Metaverse model, potential laborers living outside the city will participate in the "high-value" economy through virtual labor.

As more and more consumer spending shifts to virtual goods, services and experiences, where we live, the infrastructure we build, and the people who perform tasks will undergo further changes. For example, the emergence of "Professional Gold Farming" (Gold Farming). After the emergence of the gaming economy, many "players"—usually from low-income countries and employed by large companies or organizations—will spend an entire working day collecting resources and selling them in and out of the game. Although this kind of "work" is usually very repetitive manual labor and is limited to a few applications, the diversity and value of this kind of "work" will grow like Metaverse itself.

Metaverse and virtual identities

There is no recognized definition of Metaverse, but it has some widely recognized characteristics: Metaverse is always open; it has real-time live broadcast; it can accommodate audiences of any size; it has a fully functioning economy; it spans platforms, digital and physical fields (such as enhanced Reality); allow cross-platform transmission of digital assets; its experience and content will be jointly created by individual users and the company.

Take Roblox as an example. Roblox is a game platform with 120 million users. It aims to create its own Metaverse with the following characteristics: immersive; durable and stable; extensive and diverse; economical; allowing every user to have a cross-border experience; embedded in social networks ; It can be seamlessly connected with any device; it runs in rules and order.

In the huge virtual field of Metaverse, people can participate in various activities, go where they want to go anytime, and do whatever they want. Users can hang out with friends remotely, create art, consume art, play games and indulge shopping, and at the same time can visit other areas with their virtual identity.

This sounds very similar to the Internet, and there are indeed many similarities between the two. Metaverse is not a single destination that everyone defaults to, but a complex network of browsers, indexes, and destinations.

For example, platforms such as Fortnite, Minecraft, and Roblox are not Metaverses themselves, but Metaverse destinations, which are similar to Internet sites. Discord and Twitch are more representative indexes that help connect users with destinations. The upper level of the index is the browser. Service providers such as Microsoft xCloud and Google Stadia will gather the index to provide a more personalized experience.

The Internet and blockchain have a wide range of protocols, technologies, languages, and access devices, bringing a variety of content and communication experiences, which are also the characteristics and future development direction of Metaverse.

The driving force behind Metaverse—Web 3.0

Before discussing Web3, we must have an understanding of Web 1.0 and Web 2.0.

Web 1.0

Web 1.0 is a product of when the Internet first appeared. Web 1.0 cultivated people's interest in e-commerce-and ultimately brought the prosperity of the Internet. At that time, the first wave of Internet browsers and online messaging platforms appeared. In short, Web 1.0 is a process from the network to the user, and the transmission of information is one-way.

Web 2.0

Web 2.0 was created between 1999 and 2004-the early days after Web 1.0. Web 2.0 has taken the world from simple static desktop webpages to interactive experiences, user-generated content, and market economy, bringing NASDAQ giants such as Uber, Facebook, and Twitter. Web 2.0 is a process from user to user, using the network as a communication channel to communicate with people, with social functions, just like a blog.

Web 2.0 has brought trillions of dollars in value, but we—as consumers—have given up many rights and freedoms to several giant companies that provide services.

Web 3.0

As the contradictions continue to emerge, Web 3.0, also known as Web 3, will follow, a network era that embraces openness, does not require trust, and does not require permissions. Web 3 understands and can meet user needs, understand user habits, perform resource screening, intelligent matching, and provide user answers. Web 3 is a process from user to network to user, and artificial intelligence is the best example.

Web 3 has the following features:

• Open-Based on open standards, the developer community remains open, accessible, and completely transparent.
• No need to trust-participants can interact as much as they like without having to trust a third party to verify.
• No authorization required-any user has the right to participate, even an authority such as the government.

Bitcoin, Ethereum and other blockchain protocols are the driving force behind Web3-its vision is an open financial system, anyone can participate in the construction, without the constraints of traditional financial institutions.

The foundation for the prosperity of Metaverse

The basic elements of the Web already have standards: TCP/IP and other protocols for sharing data packets, MP3/GIF and other file formats, etc. NFT for the first time enables a decentralized universal digital representation and ownership layer, which can be transparently Manage scarcity, uniqueness and authenticity.

To make Metaverse's economy flourish, there must first be shared and widely recognized standards and agreements that can promote the issuance and flow of virtual goods.

The above picture shows the five elements that will promote the prosperity of Metaverse, namely culture, media, infrastructure, standards & protocols, and content. Although encryption has not yet been recognized by "mainstream" participants, encryption is very likely to become the basis for the prosperity of the above five Metaverse fields.

From the perspective of early investment, comprehensively speaking, large-scale infrastructure construction and the development of next-generation media are often dominated by leading institutions with strong economic and research capabilities, and are relatively saturated. In contrast, the application of NFT in the virtual world is very capable of attracting investors' attention.

In the field of NFT and encryption, the most important thing is to solve the following problems: digital scarcity and uniqueness, digital property rights, large-scale coordination across virtual environments, and systems to protect user privacy. The solution of these problems cannot benefit a few people at the expense of many people. Without strong economic support, the entire concept of Metaverse would soon fall apart.

In the encrypted economic incentive system, there are many tools to attract user interest, reward early adopters for acquiring ownership, and give users governance rights through rewards. In the crypto community, we saw the rise of community-owned protocols, networks, and games for the first time. These protocols, networks, and games have nurtured a large number of loyal fans while avoiding third-party platform operators that operate opaquely.

In addition, it is self-evident that encryption and NFT have brought digital ownership and verifiability, completely subverting the art, games and other fields, and also adding an important link to the development of Metaverse.

NFT: The core of digital ownership

We mentioned Metaverse and Web 3 above.

In Metaverse, people have a digital life, can make money, and spend their free time without being restricted by the physical world.

But if Metaverse only exists in the Web 2.0 environment, large organizations such as Facebook and Google can control user data and make money from it. They can delete and control the user's content, and the user's freedom and rights will inevitably be violated.

Therefore, if Metaverse is to continue to develop, enter the mainstream, and become an indispensable part of people's lives, the ownership of digital objects is extremely important.

After the advent of Web 3, end consumers took back ownership of their data. They can control their own data-forming a distributed data center in an encrypted and decentralized computer network, without transferring data and privacy rights to large technology companies.

With the power of NFT, users can enjoy true digital ownership. NFT encryption can prove that the user himself is the owner of digital items and assets, and no third party takes them away, and does not need to be controlled by the development platform. The so-called "digital ownership" means that the asset has achieved its uniqueness in the real world in the digital world. Sex, scarcity and tradability.

A non-homogeneous token (NFT) is a digital item that can be created (minted), sold, and purchased on the open market. The most important thing is that any individual user has the right to own and control, without the permission of any institution. support. It is for this reason that users can make their digital items have lasting, stable and true value.

NFT artwork

Take NFT artwork as an example. The core applications of blockchain in the art field include provenance verification, authenticity records, digital scarcity of new media and generative art, fragmented ownership and shared ownership, and new forms of copyright records. Smart contracts and tokens based on Ethereum also bring more investment options and introduce innovative intellectual property structures.

In traditional art, in order to prepare an art exhibition, galleries need to spend a lot of time researching the provenance of works. The cost of review is included in the gallery fee structure such as commissions. The use of blockchain technology can ensure the scarcity of digital currency, eliminate the process of trust central institutions, and eliminate fixed costs such as site fees and appraisal fees, which largely solves the problem of high fees for galleries in the traditional art field. These platforms also provide collectors and digital art lovers with more convenient and cheaper collection and appreciation channels.

However, the blockchain technology brings more than new art forms and the reduction of transaction costs. Its provenance can even determine whether the work can be successfully sold, and it also provides a satisfactory solution to the digital scarcity problem, allowing creators For the first time in history, he can accurately price his works and distribute and trade them safely. NFT allows artists to monetize their works in a new way, reduce middlemen who earn high commissions and other fees, and establish direct contact with supporters and fans.

NFT games

Take the NFT game again as an example. Hearthstone's revenue in its heyday in 2018 exceeded $2.4 billion, mostly driven by in-game asset transactions. But apart from the aesthetic value, the practical value of Hearthstone Legend is almost zero. Imagine, what if the game assets in Hearthstone can be secured by the blockchain and used as collateral to burst loans and generate cash flow?

The difference between in-game items in Hearthstone and NFT games is very simple: digital ownership. Buyers of NFTs never need to worry about some companies stopping services or freezing their accounts. This is because Metaverse is an open ecosystem, not an ecosystem dominated by the whims of any company. If any company has too much control over Metaverse, they may get huge profits from all Metaverse transactions, stifling economic efficiency, and hindering the exploration of innovative and beneficial business models.

Decentralized finance and economy are fairer, more effective, and more stable than trusting any giant company. In the crypto universe, everyone has the key to their own kingdom.

In short, NFT allows Metaverse to exist in an open, trustless form, and to achieve decentralized ownership.

Metaverse use cases

Nowadays, users are more and more inclined to control their digital assets. Over time, players will tend to choose items that can be more controlled by themselves. Decentraland , Cryptovoxels, The Sandbox and Somnium Space are typical representatives.

Decentraland

Decentraland is a 3D virtual world. Based on the decentralized VR platform of Ethereum, users can fully control the content environment and applications they create, ranging from any static 3D scene to applications or games with more interactive functions. Users can build a virtual world here, play games, explore the NFT Art Museum, participate in live concerts, and perform other social activities. Opensea 's data shows that at the time of release, Decentraland's NFT sales volume ranked first, with sales of 1273.8 ETH in the past seven days, which was approximately US$340,000 at the time.

Decentraland is a virtual world that is truly owned by users, in which all virtual land and buildings on the virtual land are held by the owner forever. After installing the MetaMask extension, users can use cryptocurrency and NFT functions in a standard web browser, buy and sell real estate, create and sell virtual artworks for art galleries, or build game worlds. Decentraland even has meeting spaces, proving that it can create unique and creative booth experiences for vendors.

It is not difficult to see from the game settings that the central content of Decentraland is works of art. Decentraland also has a place dedicated to displaying digital artwork.

One of the characteristics of Decentraland is the establishment of the museum area, which aims to become the encrypted art hotspot of Decentraland and the most visited art venue in the world. The museum area is probably the most eye-catching use case on Decentraland, fully embodying the core characteristics of user-centric ownership. For collections, ownership is undoubtedly extremely attractive, which is also a major trend in the future development of the encryption field.

In addition, in Decentraland, NFT stores are everywhere, some NFTs are only for display, while other NFTs can be purchased with MANA. Users can buy wearable devices on the Decentraland market, and the market will also sell hats, shoes, shirts, and land plots. Decentraland also offers a variety of mini games, some of which will reward users, which can then be sold on the OpenSea trading platform.

The Sandbox

The Sandbox is a virtual world where players can use the platform's utility token SAND to build, own, and monetize gaming experiences in the Ethereum blockchain.

The game is committed to creating a deeply immersive virtual world, allowing players to collaborate in creating virtual worlds and games without central authority management, subverting existing game manufacturers, such as Minecraft, Roblox, etc. The Sandbox aims to provide creators with the true ownership of their works, allowing their works to be presented in the form of non-fungible tokens (NFT), with SAND tokens as rewards, thank them for their participation.

In the current game market, the centralized ownership and control of user-generated content limits the rights and ownership of creators. The centralized control of the player's creation of item transactions limits its creation value. In addition, if the work can be easily copied, modified and established, the originality and ownership of the creative work is also difficult to guarantee.

The Sandbox tries to provide solutions to these problems, accelerate the application of blockchain, and develop the blockchain game market. Through the establishment of the voxel game platform, creators can make, play, share, collect and trade without central control, enjoy secure copyright rights, and earn SAND. NFT can guarantee copyright ownership and give it a unique and unchangeable blockchain identifier.

The Sandbox also provides the VOXEDIT tool. VOXEDIT is a simple, easy-to-use and powerful free 3D voxel modeling package that allows users to create and animate 3D objects such as characters, animals, leaves, and tools, and export them to The Sandbox market as in-game assets.

In addition, the virtual world map of The Sandbox is based on the collection of 166,464 plots (408*408), and each plot (LANDs) is a virtual token supported by the blockchain (using ERC-721 standard NFT). The plot is the physical space owned by the player in the virtual world, which is used to create and monetize the game. Land plots can also be used to publish games created by players, or they can be rented out to other players. Each plot has a set of pre-built terrain, but the owner of the plot (or other players they invite) can modify the terrain.

Somnium Space

Somnium Space is a cross-platform virtual reality world, which has been launched as early as 2018, trying to use virtual reality, blockchain and cryptocurrency to create a shared, cross-platform virtual world. It allows users to purchase land, design various buildings and import the platform to create a common virtual universe. In Somnium Space, players can choose from three different sizes of land: small (200 square meters), medium (600 square meters) and large (1500 square meters). This project aims to help players create a functioning economic system in the virtual reality world to promote players to get an immersive experience in the virtual world.

In short, whether it is Decentraland's virtual world or The Sandbox or Somnium Space's virtual world, user ownership and control are major trends in the development of cryptocurrency and the Internet, as well as a new breakthrough in the development of Metaverse.

How to earn money in Metaverse

The two major sectors of NFT and Metaverse are rising, and many small partners are thinking, how to get benefits in this newly integrated asset field? The following three methods are available for reference.

Virtual land

For most people, one of the biggest attractions of Metaverse is the opportunity to own digital land in the virtual world, and the holder can freely decide how the land will develop.

There are many ways for individual players to profit from this new type of property. Just like traditional real estate, the income stream of Metaverse land includes three methods: transaction, development and leasing.

Small strategies for earning income from Metaverse land:

• Trading: One of the easiest ways to make money from virtual land is through trading, where you can get a profit by selling it at a price lower than the purchase price. It should be noted that trading usually requires a large amount of initial investment, and sometimes a long wait. The most important thing is to have a good eye for discovering latent masses.

• Development: The development of land requires the necessary skills, or the ability to pay for it, and find someone to do this work. The land can be developed to allow other Metaverse citizens to gain experience or become a location for activities. The developed land can be used for sale or as an income stream, with regular income extraction. Casinos, galleries, games, advertising spaces, etc. are all examples of virtual world land development.

To obtain development services, MetaZone provides a wide range of easy-to-deploy pre-built models in Decentraland. Voxel Architects provides outstanding architectural services in Cryptovoxels.

• Leasing: The demand for leasing is not very large now. But if the virtual world becomes more popular and the price of land rises sharply, land lease will become an increasingly important part of the ecosystem. Leasing can have long-term and short-term services, and can also provide one-time leasing services for specific activities.

Token

Some projects of Metaverse will issue non-homogeneous tokens. Similar to other cryptocurrencies and digital assets, these are fungible assets created on the blockchain and traded publicly on centralized or decentralized exchanges. These tokens have many uses, but most of them are used to trade and reward users in the virtual world.

For those who are not interested and have no time to build and develop Metaverse land, these crypto tokens should not be missed. Users can find potential Metaverse, buy promising tokens, and wait for the appreciation.

infrastructure

Another way to invest in Metaverse is to create something other people want to use. In a fledgling industry, there are many ways to provide infrastructure. It can be to explore the blockchain infrastructure public chain, or it can be customized programs and applications compatible with other Metaverse projects.

This method has the greatest potential for gains, but it is also the most difficult to achieve. It requires more time, experience, skills, and luck. For example, Metaverse Billboards is an example of providing infrastructure, which provides more than 130 advertising spaces for the entire Metaverse.

Ecological benefits of NFT

It is easy for people to fall into the excitement of NFT, but they do not realize the huge environmental impact of NFT and other cryptocurrencies on the planet. A new study by the University of Cambridge found that mining Bitcoin now consumes more energy each year than the entire Argentine country.

The computing power and energy required for coin minting, bidding, cancellation of bidding, selling and transferring ownership of cryptocurrencies have caused millions of tons of carbon dioxide emissions. Before finding the right combination of numbers, minting transactions need to run millions of encrypted checksums-consume huge amounts of electricity and emit a lot of carbon dioxide.

• Mint: 142 kWh, 83 KgCO2
• Bidding price: 41 kWh, 24 KgCO2
• Cancel bidding: 12 kWh, 7 KgCO2
• Sales: 87 kWh, 51 KgCO2
• Transfer of ownership: 52 kWh, 30 KgCO2

Computational artist, engineer, and computer scientist Memo Akten once said: “The original cryptocurrency Bitcoin (BTC) is estimated to consume between 80-120 TWh per year, accounting for about 0.45% of the world’s total electricity production.”

Nowadays, the ecological research of NFT is still only rarely mentioned, but in a world where sustainable development is increasingly promoted, the ecological effects of technology will receive more and more attention.

As NFT and Metaverse's huge infrastructure are gradually put in place, technology continues to advance, and the operating speed continues to increase, it is obvious that the combination of the two will not only be hype and bubble. In the future, the rise of mixed reality will provide more opportunities for collectibles and commercialization, driving further growth. This advancement can continue the promotion of technology in an environmentally sustainable manner, ensuring that the NFT Metaverse has a lasting and positive long-term development.

future development

Of course, Metaverse is a future development trend, but it also faces its own problems. Perhaps, its future needs to be more open.

There is relatively little information shared between many different applications and spaces, and encryption and decentralized computing are beginning to heat up.

For example, users can transfer what they own from one application to another. For example, users can exchange cryptocurrencies on Uniswap, check balances in Zerion, and sell in-game wearables on OpenSea.

But this is not the case for most 3D world assets or environments. For example, The Sandbox cannot explore the decentralized world, nor can it use engine applications to open games made by Unity.

If we want to achieve a truly open world across different platforms, devices, and references, we need complete openness and accessibility of data, and we need timely services and data subscriptions to deliver assets when and where we need them. We need to be completely decentralized, as a public interest, so that anyone can use and contribute.