What do celebrities like Steve Aoki and Gary Vee or brands like Disney and Nike have in common? They’re all capitalizing on the latest trend in digital assets and technology. It’s as if, overnight, the multibillion-dollar NFT market emerged. In that case, what does this mean? Let us explore it with the help of our blog.
It’s important to understand what Web3 and NFTs are and how they can change the Internet’s future.
What are NFTs, exactly?
Simply put, a non-fungible token (NFT) is a digital asset that cannot be exchanged for another. Its ownership can be verified publicly using blockchain technology. Photos, videos, audio files, and other digital media are easily reproducible items that may be linked to NFTs. They can also stand in for works of art, songs, game items, or videos.
As a synonym for “unique,” “non-fungible” describes something that cannot be swapped out for another. For instance, bitcoins are fungible, meaning that you can exchange one bitcoin for another. But a unique trading card can’t be exchanged for another. A swap would result in a different item.
What Are NFTs Used For?
Digital assets such as artwork jpegs, videos, and even property listings can all be represented as NFTs. By tokenizing and securing these files on a blockchain, the buying, selling, and trading of these files becomes more streamlined.
How Does NFT Ownership Work?
In the context of blockchain technology, an NFT is a one-of-a-kind digital asset that can be owned digitally. Non-fungible tokens (NFTs) are tokens that cannot be made to be identical to another NFT, either in form or value.
NFTs are primarily used to acquire digital assets such as artwork, games, and collectibles. That is to say, NFTs are finding more practical applications.
What Are the Best Ways to Make Money from NFTs?
Suppose financial gain is an objective, NFTs present numerous opportunities. In a few key ways, they are as follows:
Play-To-Earn Games: First, “Play-to-Earn” games are different from traditional games because the in-game items you acquire are yours to keep. These NFTs can be bought and sold in-game or on a marketplace.
Collecting: Many people amass NFTs as a way to “HODL” (hold on until its value increases) in anticipation of a future price appreciation.
Investing in New NFTs: Third, invest in emerging NFTs; if you’re serious about NFTs, you should look for projects you’re interested in and join them as soon as possible. Joining the Discord community and being added to the whitelist is a common result.
Create your own NFT: Anyone with access to a computer can create an NFT, and even a collection of NFTs can fund additional projects. It is now possible to develop NFTs for free, albeit with some limitations.
Where does Web3 Fit in?
Web3 is a blockchain-powered, app-based, decentralized internet. With Web3, users can contribute and engage without worrying about their data being sold or traded. The term “Web2” describes the current iteration of the web. Web2 is interactive but also dominated by businesses that offer services in exchange for users’ private information.
Core Ideas of Web3
It’s difficult to pin down exactly what Web3 is, but it’s built on a foundation of a few key principles.
Decentralization: Instead of a few companies or governments owning and controlling the vast majority of the Internet, ownership of Web3 will be spread out among the people who create and use it.
Permissionless: Web3 does not require anyone’s permission to use, so no one is ever left out.
Native Payments Methods: Instead of using the antiquated infrastructure of banks and payment processors, Web3 has native payments that use cryptocurrency for online spending and the transfer of funds.
Trustless: Instead of relying on third parties that can be trusted, Web3 uses economic incentives and mechanisms to function.
Why Is There All This Web3 Hype All of Sudden?
The cryptocurrency sector, which stands to gain the most from an internet built on its technology, appears to be the primary source of enthusiasm. Some of the excitement stems from well-known companies, such as Reddit, making moves to create Web3 marketplace development and platforms ahead of the competition. CoinDesk reported at the end of October that GameStop is looking to hire a “Head of Web3 Gaming” and software engineers for a new, as-yet-unannounced NFT platform. There’s been a lot of talk about how Web3 can improve video games by facilitating player-to-player transactions, such as buying and selling in-game items or acquiring tokens that can be used to influence game administration.
The Verge, however, also suggested that GameStop could use buzzwords like “Web3” and “blockchain” in its job postings to drum up the same level of viral support it received from alternative investors back in January. Andreessen Horowitz, a venture capital firm, made a big lobbying push for Web3 in Washington, D.C., at the beginning of October, which may be even more significant. The company, which has made significant investments in cryptocurrency and other blockchain technologies, claims it dispatched executives to Capitol Hill and the White House to advocate for Web3 to answer Silicon Valley consolidation and propose regulations for the burgeoning virtual ecosystem.
What is Metaverse?
The term “metaverse” describes the combined digital platforms of the future that will emphasize virtual and augmented reality. It’s being heralded as the Internet’s next big thing, with huge potential for profit in the tech industry and beyond.
According to the vision for the metaverse articulated by social media and technology companies, virtual reality headsets, digital glasses, smartphones, and other devices will provide users with access to 3-D virtual or augmented reality environments. Where they can work, connect with friends, conduct business, travel to faraway locations, and learn about new topics in a setting mediated by technology in novel and immersive ways.
What Role Do NFts Play in Spearheading the Adoption of Web3 and the Metaverse?
By and large, NFTs have been more accessible to the layperson than more complex topics like DeFi. While the first adopters of NFT had to shell out cash to experience this brave new world, modern audiences can get in on the action for pennies on the dollar.
NFTs are a gateway drug to getting people into Web3 and the metaverse. As listing your NFT project for free become more commonplace in everyday practices like making hotel transactions, people will gradually warm up to them more. POAP deserves recognition for facilitating free participation. The next big thing will be in reputation systems, and it’s not hard to imagine that portable reputation will become a very lucrative market, just like online video game accounts were in the early 2000s.
For Business Owners, What Does This Mean?
Many transactions are made possible by Web3, which may lead to a reorganization of how ads are bought, sold, and placed. Brands and advertisers could use this to their advantage by:
Create Digital Assets That Generate Value
Their products, services, marketing, and other initiatives could all benefit from NFTs, and the value they create could be monetized.
Pursue New Forms of Ad Targeting
Users can choose what kinds of advertisements they’re willing to receive and what information they’re ready to share by setting preferences in their login key, for instance. In exchange for seeing these ads, they may receive discounts, freebies, or even monetary incentives.
Optimize the User Experience
Businesses are already creating new ways for customers to interact with brands in the metaverse. One is Nikeland, a 3D virtual space where visitors can buy digital products. These play games earn them rewards and engage directly with the brand and other enthusiasts in a curated, responsive environment.
In addition, using Web3 technologies, businesses can designate an ENS domain (similar to a URL) that helps customers quickly and confidently recognize the company or brand.
Several Ways Some Brands Are Already Using NFTs:
Granting Special Privileges:
Starbucks’ announcement of the launch of its Web3 NFT was motivated by a desire to provide exclusive benefits to its loyal customer base. Each individual who purchased an NFT had their unique flavor profile and model created especially for them. They also received a 15% lifetime discount and the right to vote on the next batch of flavors. Indeed, this is quickly becoming one of the most common applications of NFTs by established companies.
Some ad networks are already developing their own formats to encourage participation. NFTs can be “mined” in the advertisement format after the user watches a video or fills out a survey related to the advertised brand. This is significant because brands shouldn’t make NFTs for the sake of making them; instead, they should use them to promote content or nudge consumer behavior.
Connecting the Physical and Virtual World:
To bridge the gap between the real and the virtual, high-end companies like Nike, Prada have released highly exclusive NFT collections. For instance, Fast Company reported on their site that Prada would include an NFT (a GIF) with the purchase of one of only one hundred black and white button-down shirts designed by Damien Hirst’s son, Cassius Hirst.
The vast archives of digital media companies provide fertile ground for the development of NFTs. For instance, CNN Vault offers for sale snippets of their archived library detailing pivotal moments in history. It’s not hard to picture real-world stores developing digital versions of traditional gifts like birthday flowers, songs, and more. As more and more virtual worlds (or “metaverses”) become accessible online, the possibilities become practically endless.
Expect to see a rapid rise in the use of NFTs. As businesses realize that any digital information—from cat pictures to music can be securely recorded and exchanged on an NFT. As NFTs rise, thus will cryptocurrencies, wewb3 and Metaverse as the logical extension for digital content.