Confused by all this talk around the crypto community about tokens, NFTs, and how it connects to virtual reality? Don’t be. In this piece, we break it down as clear and straightforward as possible!
What are NFTs?
If an item or asset can be exchanged with something similar, then we term it as ‘fungible.’ Cryptocurrencies, in general, are all fungible among each other. Bitcoin, Ethereum, and MANA are all fungible because they are interchangeable. NFTs are the opposite.
Non-Fungible Tokens (NFTs) are digital representations of unique, indivisible assets that cannot be mutually exchanged and whose value is derived from an exclusive market, platform, domain, individual, etc.
These tokens increased in popularity around 2016 to 2017 when ICOs used them to represent unique ownership of assets. They were introduced by CryptoKitties, a video game where players collect virtual kitties that are represented as an ERC-721 token. However, these virtual kitties have zero value to anyone who does not play the game. It’s also impossible to trade them with another kind of NFTs, say, Minecraft MineCoins which have no standard market value.
The NFT standard is ERC-721. ERC stands for ‘Ethereum Requests for Comments.’ This results in standards (the tokens mentioned above) that make sure that developers are building software that is compatible, and builds new experiences.
Are They Profitable?
- NFTs create value for a tokenized asset by adding scarcity to a piece of work by eliminating the risk of duplication and securing ownership to a specific entity.
- NFTs can be used to purchase and retain ownership of virtual land. As in the example of Decentraland, players who own their pieces of virtual real estate can decide what to do with it. It can be rented out to other individuals or companies, or used for other business purposes.
NFTs and Virtual Reality Technology
The COVID-19 pandemic has pushed office workers and remote work farther into virtual reality, and many companies who have utilized the technology, including Crypto Rebel, are realizing that they can significantly cut costs without impacting team output. NFTs and VR technology are intertwining to give us the best possible experience during the pandemic as well as after it.
Virtual reality will become increasingly essential as NFT token holders use it to visualize and completely experience their purchases in these ‘unreal’ worlds.
For example, a VR platform known as Decentraland has been in the headlines for allowing its users to purchase and monetize plots of virtual land, as well as create their own infrastructure. Users can explore Decentraland’s Genesis Plaza where they can talk to interactive robots, visit museums, and explore whatever else virtual landowners can conjure up.
On May 24, 2019 ‘Estate 331’ was sold for $80,663. One of the largest virtual land sales in Decentraland’s short history.
The game can be experienced on a web browser in the form of a typical video game. However, those who utilize VR get an infinitely more unique experience. Using specialized headgear, users can hop into bowling alleys, shopping malls, and even retail outlets where they’ll be able to purchase unique NFTs like cards, or concert tickets.