Research by CEX.IO

Metaverse and NFT

What is metaverse crypto? What is an NFT? CEX.IO has created the ultimate guide on what the metaverse is, what NFTs are, and the relationship between the two.

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Topics

NFTs in the metaverse
What is a metaverse platform, and how does it work?
What is metaverse crypto, and how to use it?
How to make NFT art
How to make NFT art

To infinity and beyond: Crypto and NFTs in the metaverse

The metaverse has been called the union of all advances in technology. A shared virtual space where people from all over the world caƒn interact with one another using immersive and emerging technology. Proponents of the metaverse claim that in the not-so-distant future, the lines between the “real” and “virtual” worlds will be blurred. How?

In the context of the metaverse, cryptocurrencies and NFTs serve as tools that make transactions authentic. With blockchain technology, a metaverse developer can create their own cryptocurrency and NFTs. Many metaverses have incorporated cryptos and NFTs as cornerstones of their project or platform, creating a self-contained payment system and virtual marketplace with supply and demand economics.

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The metaverse explained in detail

The metaverse is not a single platform, app, or experience. It is an umbrella term referring to a new genre of digital experiences that will be available to us in the future. This can be a massive VR roleplaying game where technology allows for full-immersion, or an AR conference platform where people can meet in real-time supported by smartphones or smart glasses. Realtors can conduct virtual tours of homes, yoga instructors can lead a private session, etc.

While social media and big tech companies are spearheading the charge by funding and developing social media VR, the entirety of the metaverse is not specific to gaming and entertainment.

Today, the future of the metaverse is limited only by technological innovation.

The origins of the metaverse

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The term metaverse was coined by Neal Stephenson in his 1992 cyberpunk novel Snow Crash. In Stephenson's story, the metaverse is a shared 'imaginary place' connected to the world's fiber-optic network. By using virtual reality goggles, users can interact with the metaverse.

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The metaverse allows developers to create buildings, parks, and signs as well as things that cannot be built in reality, such as hovering overhead light shows, special neighborhoods where space/time rules do not apply, and free-combat zones where people can fight and hunt each other.

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Unlike Stephenson’s dystopian novel, the modern concept of the metaverse is not a singular virtual location. The metaverse being developed is the Internet with next-gen immersive technologies. Today, the metaverse is often associated with non-fungible tokens (NFTs), virtual landscapes and virtual/augmented/mixed realities, VR gaming, custom avatars, and decentralized applications (Dapps).

What is a metaverse platform, and how does it work?

Today, a metaverse platform is a virtual community that lets users interact in real time. Popular metaverse platforms are usually accessed with virtual reality headsets, and provide users with 3D virtual environments to chat and play games with one another.

Facebook becomes Meta

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The recent rebranding of Facebook as Meta is an indication of forward momentum with regards to the metaverse. The transition from Facebook to Meta became official on October 28, 2021, at the Connect 2021 conference.

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In 2012, Oculus raised $2.5 million on Kickstarter. By 2014, Facebook bought the new company and has invested heavily in the technology ever since. With the official rebranding to Meta, the social media turned social technology company is banking on the future of the metaverse.

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Meta CEO Mark Zuckerberg admitted that the metaverse doesn’t actually exist yet. At the momentous Facebook Connect 2021 conference, Meta’s founder did share a video demonstrating his vision of what the technology will look like down the road. According to the newly branded Meta, here is the company’s take on what qualifies as a metaverse:

A social space where avatars represent users

Zuckerberg refers to the metaverse as a 'more embodied' Internet. Just like how a username or thumbnail picture may represent you on a website or social media network, an avatar designates you in the metaverse. A user avatar can speak, move, and perform animated actions.

Online gaming and social spaces have been using avatars like these since the 1990s.he fidelity and capability of an avatar can vary significantly from one service to another. With advances in VR, users can now see through their virtual eyes and interact with virtual objects using hand-tracking controllers. The elaborateness of virtual avatars is now demonstrated in spaces like VRChat.

Has virtual property that you can sell

A metaverse can contain digital real estate or economies with their own supply and demand.

This includes non-grey market currency exchanges on World of Warcraft, or gold farming to regulate in-universe economies like EVE Online fully. On the other end of the spectrum are games like Second Life, where disputes over player 'ownership' of the virtual land have been argued for via the in-game court.

Total 3D immersion with VR or AR glasses

Many consider total 3D immersion the last step towards achieving a 'full' metaverse. With virtual and augmented reality, we might be able to move beyond the 'magic windows' of our flat screens to an environment in which fellow avatars occupy the same space as us. Non-fungible tokens create a sense of authenticity and presence.

Your own virtual space

Making a metaverse available to people is a boon for both users and metaverse creators since users can customize the virtual world to their taste. Accordingly, creators do not have to create every virtual object from scratch. Games like Minecraft and Roblox are successful examples of how a metaverse built with a few simple building blocks can generate a wide variety of in-world creations thanks to player creativity.

Building up a virtual universe is no easy feat. There are important fundamental decisions that need to be made at the start of a metaverse project, including whether your metaverse is centralized or decentralized. Will it be governed by a for-profit corporation, or will choices be made by the users and the community? Should the creators reap the profits, or should there be an incentive for users to grow the metaverse?

What is metaverse crypto, and how to use it?

Similar to any country's economy, a metaverse needs money as well. Here, cryptocurrency comes in handy because it works like virtual cash in digital worlds. Thanks to the blockchain, a native cryptocurrency can facilitate trustless and secure payment processing with no centralized oversight.

Blockchain-based assets like NFTs or in-game items are simple to integrate. This makes cross-platform collaborations between game developers and big gaming brands like Minecraft possible without compromising user experience.

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Metaverse and NFTs

Cryptocurrencies and blockchains also have a crucial aspect to Metaverses: non-fungible tokens (NFTs). Art, sports trading cards, in-game items, and more can all be NFTs or metaverse NFTs. These are basically unique digital items, where the ownership and other information are encoded into the token.

Non-fungible tokens, or NFTs, are digital assets stored on a blockchain, the same technology that underpins cryptocurrencies like Bitcoin. With the help of NFTs, people can own some virtual things (pieces of music, pictures, etc.).

How does one join a metaverse?

Though in its infancy, there are many different metaverses for users to join. Just like any ordinary online game, signing up to the newsletter or registering an account is the first step to joining a metaverse.

Cross-platform functionality makes funding your wallet simple. Popular metaverse crypto and even some NFTs can be purchased directly in the metaverse or from supported exchanges and marketplaces.

Note, a majority of metaverse projects are hosted on the Ethereum network. An uptick in metaverse activity built on the Solana blockchain is making it a reliable competitor to Ethereum. Conducting due diligence and knowing which blockchain a metaverse is built on can mitigate risk when making investments. Compared to investing in a meme coin or altcoin, a metaverse crypto hosted on Ethereum or Solana can retain value even if the project fails.

NFT explained: future of NFT art, research

NFT means non-fungible token. What is going on with NFTs and why have they caused such a buzz all over the world? Let’s investigate NFT art and what the future holds for this exciting new space.

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What is an NFT? NFTs meaning, NFTs how they are

Have you ever wondered, ‘what is an NFT?’ NFT means non-fungible token. The term 'non-fungible' refers to something unique, singular, and impossible to copy. The point of an NFT is to tokenize something virtual or physical on the blockchain.

Take bitcoin for example. Your bitcoin can be traded for another bitcoin while retaining the same value. Bitcoin is just a representation of value like a dollar or a euro. Bitcoin, the USD, and the euro are all fungible. Trading cards that are one-of-a-kind, are irreplaceable and not fungible.

Fungible vs. non-fungible: what’s the difference?

In economic terms, fungible refers to an asset or sound that can be exchanged for the same value with another asset or good. A typical example is money and currency. If someone owned a $5 bill, its value would be the same as someone else's $5 bill. For example, two $5 accounts of one person have the same value as one $10 bill of another.

Tokens that are not fungible differ from fungible ones (cryptocurrencies) in that they lack an inherent value. These non-fungible tokens owe their value to the assets or goods they represent. Non-fungible tokens use different token standards and employ various smart contracts. The non-fungible tokens are considered to be the next generation of tools for developing a blockchain-based virtual economy.

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Characteristics of fungible and non-fungible tokens

As we now understand what fungible and non-fungible tokens are, it makes sense to focus our attention on the comparison of fungible and non-fungible tokens. Let's examine the characteristics that set non-fungible tokens apart from fungible ones.

Adaptability

Fungible tokens, as you have probably guessed by now, are interchangeable with one another. Probably the best-known example of fungible assets is fiat currencies. To make payments for certain things, you can transfer fungible assets from one owner to another. Alternatively, the exchange of fungible assets has no meaning since they are equally valuable. Payments are often made with fungible tokens, and balances are generally tracked with them.

One example of a practical blockchain use case of fungible tokens is the binding of tokens to an organization's account balance in a specific payment account. Consequently, token transfers could be used to complete payments. In addition, users can check their token balances as part of periodic netting and settlements.

Incorporating Value

There is also the distinction between fungible and non-fungible tokens, referring to the fact that each account has a balance based on the tokens owned by the account. Direct transactions or swap techniques can be used to transfer tokens quickly to other Ethereum accounts. A token transfer debits the source account with the amount of the transfer just as a bank transfer does. A similar amount is also credited to the beneficiary account.

Comparison of fungible vs. non-fungible tokens suggests that NFTs offer a unique value proposition. NFTs are special instances that are identified by a unique ID so that tokens within a smart contract can be distinguished easily from one another. A particular individual owns tokens that are non-fungible, and their values could differ because of the way each token is handled.

The demand for NFTs is therefore high, as they offer greater value to their buyers than the ones offering similar characteristics. Moreover, NFTs could facilitate ownership transfers as well as trading. By way of example, if you hold tokens for a production batch of Scottish whiskey, you can trade them for tokens for a production batch of Bordeaux wine.

Real-estate properties are one of the notable use cases for the use of non-fungible tokens. NFTs can be transferred from an Ethereum account of the bank to an Ethereum account of the house owner after they pay off the mortgage. The use case introduces a new way to apply blockchain to real estate.

How do NFTswork and where are they stored?

In the abstract, cryptocurrencies and NFTs are both supported by blockchain technology. The blockchain is a decentralized and distributed ledger that records, encrypts, and facilitates transactions from initiation to completion. Cryptocurrencies and NFTs are issued via the blockchain.

A key difference between the two is the idea of fungibility.

Similar to fiat being a store of value, cryptocurrency is fungible. The dollar in your wallet carries the same amount of value as the dollar in your bank account. The amount of value between your bitcoin and my bitcoin is functionally identical.

A non-fungible token, or NFT, is also a virtual asset. They are formed or “minted” on the blockchain through a smart contract. Each NFT has its own unique, one-of-a-kind digital signature. NFTs serve as a voucher of ownership for a piece of art, music, or other media. In the metaverse, an NFT can be a piece of virtual property or in-game item.

Today, most NFTs are minted on the Ethereum blockchain, though Solana, Cardano, and Polygon are beginning to emerge as worthy alternative options.

Who owns the rights to NFTs?

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The NBA Top Shots NFT marketplace is one of the largest marketplaces for tokenizing digital goods and officially licensed memorabilia. The NFTs include NBA artwork, items in games, and stills or video from live broadcasts.

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When someone buys an NFT from the creator, they become the owner. An NFT is a digital certificate of ownership that represents the purchase of an asset. NFTs are traceable on the blockchain through smart contracts. Owning an NFT of a piece of NBA artwork from Top Shots does not confer any other rights to the work.

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An NFT is simply a certificate of authenticity that a digital record of an asset belongs to you. It is akin to owning a limited edition print of a famous painting or photograph with copyright permission reserved for the owner.

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What can you do with NFTs?

The following are a few examples of how artists tokenize physical artwork into an NFT.

Convert physical work to NFT and place your token on the marketplace. The physical work must be destroyed after the NFT has been minted (proof of destruction must be provided).

Make money selling the different parts of the NFT physical art as it progresses, minting the parts that are finished as NFTs, and selling the parts you complete.

Offer a physical copy of the NFT (as did NFT artist Beeple).

To sell each part separately to several different collectors, mint the whole physical work as an NFT, then divide it up into several pieces.

How to sell NFT and physical art

Creating a roadmap in advance will help you determine the offer you will make to your future collectors. You can create the physical work and the NFT separately or together, but the value will differ according to what you intend to accomplish. In order for the digital art piece and NFT to stand out, for example, create a series of collectibles. In order to cultivate scarcity, generate a rarity system with a limited number of releases per piece.

In March 2021, a group of NFT fans and private investors named Burnt Banksy acquired Banksy's 'Morons' for about $100,000. This piece was minted into an NFT and burned via livestream (achieving proof of destruction) to validate the NFT’s value. The NFT was sold for 228.69 ETH (roughly $380,000) a few days later.

How to make NFT art?

Maybe you are a designer or an artist, and you hear that someone paid $69 million for a Beeple digital painting. While it’s rare to sell NFTs for so much money, creating an NFT of your own could is a worthwhile pursuit for artists trying to diversify. The OpenSea marketplace is a great place to create your first NFT.

Figure out the kind of NFT art you want to create

Selecting the art form to submit to OpenSea is an ideal starting place before submission on the OpenSea marketplace. Tokens are non-fungible and may represent any digital file. It can be any type of digital media: a picture, a piece of music, an essay, a video. In other words, whatever can be reproduced via a multimedia file. Uniqueness and scarcity creates value and demand in the NFT markets.

Find and fund your marketplace account

As soon as you finish your piece of art, opt for a marketplace where you can sell your creation.

High volatility is also involved in creating the NFT. Remember that the minting process could cost more than 100$ due to expensive gas fees. In order to pay the fee, you need a wallet with ETH. MetaMask is one of the easiest web3 compatible apps to use, and is free to download on the App store and Google Play.

OpenSea will mint your NFT for free, but you will still have to connect a wallet in order to create a user account (and get paid).

Transform your piece of art into NFT

You can now create the first NFT once you have connected your ETH Wallet to OpenSea.

After logging in and connecting your wallet, click “create” in the upper menu, then choose a collection. Input all the data you need, then save. You are now ready to commence the actual minting process for a new NFT.

Click on “new item,” upload your artwork, and give as many details as you want. When you are finished adding details, finalize by clicking the “create” button again. Congratulations, your token has been created successfully!

Sell your NFT

If you want to sell your NFT on OpenSea, you will have to open the newly minted item in your collection and click the “sell” button. On the selling page, you will have the option of choosing which tokens to accept as payment, a fixed price or an auction, and the rate you want to receive from the first and subsequent sales.

What will you get if you create your NFT?

Virtual worlds place a high value on NFTs. Some metaverse NFTs are virtual plots of land or houses people can buy and sell in-game. For metaverse roleplaying games, virtual equipment, weapon parts, or clothing can be minted as NFTs for character avatars to navigate their digital world. Some metaverse NFTs are bought low and sold for at higher costs to earn digital wealth.

How to buy NFTs?

Buying NFTs requires a little bit of preliminary research and work. In order to interact with any NFT marketplace, getting a wallet like MetaMask is essential. Wallet software that can connect your phone or browser to blockchain apps to make transactions seamless.

Searching for the right NFT

Choosing an NFT with an upside value potential is important. You can use the NFT to create art, music, videos, or even items in a video game. Search for NFTs on Google, Twitter, or Facebook. You can track the upcoming release of Ethereum and Solana NFTs at Rarity.tools or NFTcatcher.io.

The time of the sale, the cryptocurrency requirement, and the number of NFTs being sold should be noted when studying upcoming NFTs. Understanding the scarcity behind your chosen NFT can help you make an informed decision.

The team behind it and whether it is on-chain or off-chain are some things that you should confirm about the NFT. Having a reputable team is important as it helps to make the NFT more valuable.

Find a place to buy crypto

If you don’t have enough coins to buy an NFT, find a trusted and secure crypto exchange like CEX.IO. Although there are some exceptions, most NFTs are purchased with ETH.

NFT platforms

NFT platforms preside over the creation and commerce of NFTs. Artists and creators use NFT platforms to mint NFTs and sell them on the native marketplace or via NFT storefronts to buyers and collectors. Three highly popular platforms for creating NFTs include Rarible, Larva Labs, and OpenSea.

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Rarible

Rarible is a large NFT marketplace. Rarible allows users to buy, sell, and create all types of art, videos, collectibles, and music. Artists and creators using Rarible can create and sell custom crypto assets resembling their own digital works.

In order to buy and sell on Rarible, users need to buy the Rarible token RARI. RARI is a DAO governance token awarded to users, collectors, and creators who are active on the Rarible marketplace. Rarible and the RARI token is built on the Ethereum blockchain, enabling users to manage their artwork and NFTs on OpenSea.

Larva Labs

Larva Labs are best known for their viral CryptoPunks NFT project. Crypto Punks are a collection of 10,000 unique characters stored on the Ethereum blockchain. Back in 2017, some CryptoPunks were given away for free, but they have since been sold for millions of dollars. There are other digital art projects currently underway at Larva Labs like Meebits, Autoglyphs, and other blockchain-based app development projects.

CryptoPunks NFTs are first released on the Larva Labs site. After they are purchased on the Larva Labs site, they are often resold on third-party marketplaces. Despite the lack of market features, Larva Labs' is famous for releasing their NFT projects for sale directly through the built-in marketplace.

OpenSea

OpenSea is a massive NFT marketplace and the leader in NFT sales. OpenSea is known for its accessibility, and is often recommended as a starting place for new buyers and creators to jump into the world of NFTs. The platform supports over 150 different payment tokens, making it easy to interact with the market once users connect their wallet.

OpenSea does not require approval for artists to sell their art. For artists interested in experimenting with the minting process will find a simple user-experience on the OpenSea platform. The absence of approval does have drawbacks, however. OpenSea has an excess of worthless counterfeit NFTs listed to trick new buyers.

The future of NFTs

The ease with which NFTs confer guaranteed ownership and authenticity to others is a groundbreaking digital innovation. Along with other blockchain-supported digital assets like cryptocurrencies, the future of NFTs are certainly bright.

Today, the advent of Bitcoin and the rise of blockchain technology has been a tremendous disruptor for the global markets. Similar to how Ethereum took the concept of the blockchain beyond a payment system; the utility of NFTs will likely advance beyond the art and media worlds.

For content creators and artists, NFTs level the playing field. They can be accessed by a global community on a diverse variety of NFT marketplaces and platforms. Artists are no longer bound to the traditional art exchanges, where galleries and agencies take a sizable share of the creator’s profits.

The use of NFTs in the education system may be seen in the near future. In higher education, graduates can be granted an NFT degree from their college or university. This can be used at scale to grant prospective employers a means to rapidly authenticate their credentials.

For clubs and private venues, event organizers can issue NFTs to specific invitees. People can be assigned an NFT for concert admission. New systems can be put in place to reduce fraud, hacking, fraud and security threats while preserving user-security and best practices.

FAQ

Q.

How are NFTs and cryptocurrency different?

A.

In the abstract, cryptocurrencies and NFTs are both supported by blockchain technology. The blockchain is a decentralized and distributed ledger that records, encrypts, and facilitates transactions from initiation to completion. Cryptocurrencies and NFTs are issued via the blockchain.

A key difference between the two is the idea of fungibility.

Similar to fiat being a store of value, cryptocurrency is fungible. The dollar in your wallet carries the same amount of value as the dollar in your bank account. The amount of value between your bitcoin and my bitcoin is functionally identical.

A non-fungible token, or NFT, is also a virtual asset. They are formed or “minted” on the blockchain through a smart contract. Each NFT has its own unique, one-of-a-kind digital signature. NFTs serve as a voucher of ownership for a piece of art, music, or other media. In the metaverse, an NFT can be a piece of virtual property or in-game item.

Today, most NFTs are minted on the Ethereum blockchain, though Solana, Cardano, and Polygon are beginning to emerge as worthy alternative options.

Q.

What is a metaverse?

A.

A metaverse is an alternative universe, augmented virtual reality, considered as a second version of the Internet. The metaverse is present on the platform or can be a part of a video game.

Q.

Where can I buy NFTs?

A.

There are many platforms that allow curators and collectors to buy, sell, or bid on NFTs. Creators can also participate on marketplaces by listing their NFTs to be auctioned off. A few notable marketplaces include OpenSea, Nifty Gateway, Rarible and Foundation.

Q.

Can You Turn NFTs Into Cash?

A.

Yes. Since the majority of NFTs are hosted on the Ethereum blockchain, the top NFT marketplaces require ETH to buy or bid on an NFT. Once you successfully purchase an NFT from a marketplace, you can resell it on the market or sell it to a friend for cash. Regardless of the medium of exchange, you can always convert or sell ETH for cash.