Blockchain is the primary technology that segregates itself from other technologies by solving the double expense with the development of Bitcoin blockchain. NFTs or non fungible tokens were driven by the blockchain technology which brought the interoperability and lack of NFTs. But what do NFTs and the blockchain technology have to do with Metaverse? Why are large brands conducting experimentation on NFT and metaverse?
The Idea Of Metaverse
The term “Metaverse” was first coined in 1992 when Neal Stephenson published his science fiction novel “Snow Crash”. In his book, humans communicate with each other and with software agents like avatars in a 3D space that works as a metaphor for the original world. While it was Stephenson who initially used the term, the concept of a VR (virtual reality) based successor to the internet was already being spoken about by internet pioneers in the late 1970s and early 1980s who viewed the internet of the future as a shared digital space. A place where our physical space blends with the virtual and forms new digitized areas somewhere in between.
In these areas, the reign alters. People become what they dreamt of in their regular lives. They express their inner selves via digital avatars and can even bring their digital imaginations into this world. Now the word “Metaverse” has received enormous fame in the mainstream, some have already started conceptualizing the metaverse.
But, illustrating the metaverse is still to some extent a gamble. Just as in the early days of the internet many had no concept of what it would turn into, let alone that it would be used for business models like Amazon, Uber, and Netflix. When people state that the Metaverse will be this or that, no one really has any notion of the exact breadth and size of the Metaverse, yet.
What Are NFTs (Non Fungible Tokens)?
An NFT is a digital asset that portrays real world items such as art, in game items, music, and videos. They are purchased and sold online frequently with digital currencies and they are mainly encoded with the similar underlying software used in digital currency.
Even though they have been in the market since 2014, they are now gaining popularity as they are presently becoming an increasingly famous way to sell and also build digital art. There are many brands on NFT that are presently working on this technology to take this sector further.
Metaverse And Web 3.0
Two ideas that will shape the globe in the next 10-15 years are the Metaverse and its expansion in all dimensions of the world and Web 3.0 and the internet’s democratization. But, aren’t the Web 3.0 and Metaverse the same thing? Just as there is still no fine illustration for Metaverse, there is also no idea for what Web 3.0 is, both of which are still maturing.
However, it is already possible to understand some of the features of Web 3.0 such as the aim of the user and not of entities, the huge use of AI (artificial intelligence), along with distributed networks. Moreover, the content of Web 3.0 will be more graphical and will have more videos and 3D images. Also, in Web 3.0, AR (augmented reality) and VR (virtual reality) will be common place, bringing more realistic graphics to games and applications.
Considering this we can say that the Metaverse, still nascent, is being constructed in several areas with the Web 3.0 being the largest one.
It supports both social spaces like Second Life, and games, which is one of the successful attempts to formulate a metaverse portal, but it cannot be stated that the Metaverse is the Web 3.0 itself.
General Experimentation On NFT And Metaverse
As we saw above, members of the technical community were already expecting an Exponential Age where the “internet of the future” would take us to the Metaverse.
Well, the future is already ready for us, but until lately, it was not known how this area with several digital worlds would attain its complete potential. Could the Metaverse essentially change not only the way people communicate with the digital space but also alter part of the original world?
It is the combination of NFTs into the Metaverse that has started the transformation of our communication in virtual worlds, affecting part of the real world. Among the brands that are doing experimentation on NFT and metaverse, Gucci has sought to attain new users in the Metaverse in their game Roblox. The approach used is to sell non fungible tokens for avatars of the limited edition “Gucci Collection” in the Roblox game that has glasses, bags, and hats.
Brands About Experimentation On NFT And Metaverse
The grand space of Metaverse and NFT is not just a chance for consumer facing entities. However, from training the future surgeons to releasing product demos to retail employees, there are numerous business applications when it comes to Metaverse.
Big brands are utilizing virtual reality and also the metaverse to market their items by using “meta branding” to publicize their items and make a wider reach for the consumers, mainly young users. Brands like Gucci, Nike, or Dior are formulating virtual showrooms where the users can walk in to view and experience their products. They can try out virtual dresses, or can even change their wardrobes if required. This is also where NFTs come into play.
In July 2021, Coca-Cola released branded digital clothing as non fungible tokens, that included a “wearable” jacket that was required to be worn on avatars within the digital world of Decentraland, even arranging for a Rooftop Party on the channel to celebrate the launch. Now in November, NASCAR will be releasing a digital car on the Jailbreak breakout game channel Roblox and selling clothing for avatars of the players. Players can also form their own NASCAR uniforms as part of a fan game with the developers of the game acting as influencers to promote them on social media.
In another use scenario, home appliance brand Dyson formulated the “Dyson Demo VR”. This space works as a virtual showroom where the consumers can test various home appliances like straighteners, hairdryers, etc.
Presently the digital space is controlled by the young generations and big brands are conducting experimentation on NFT and Metaverse to grab this huge consumer base. They also accommodate interoperability among varied ecosystems. They are dependent on open blockchain networks. NFTs can be exchanged, viewed, and transferred from various wallets around the globe. They have evolved as a free space where both real world and the virtual world can function and trade.
How Can Brands Benefit From Metaverse And NFT?
The Metaverse and NFT hold great potential for companies moving into the digital space. Big brands with NFTs can conduct a great range of experimentation on NFT and Metaverse like:
- Introduce the latest designs and ideas and facilitate a recent experience for the users.
- Arrange digital events and exhibitions to portray artworks and digital products.
- Host fundraising exhibitions.
- Formulate virtual stores and enable customers to walk in and gain a unique experience of the items of the entity.
- Set up live demos to allow users to evaluate the utility of the item.
- Monetize virtual assets via NFTs.
- Engage customers via loyalty schemes. Chosen customers can get VIP access to events.
Risks And Weaknesses
But every coin has two sides. NFts may seem like a lucrative choice for the brands, but they also have weaknesses and risks. With that let us have a look at the risks associated with experimentation on NFT and Metaverse.
Early market, confusion, lack of adoption
The idea of crypto and NFt is still very new to many. There are many who do not know about this technology and so it creates several barriers in your functioning. They act as a barrier to entry.
Regulatory concerns brings NFT adoption to a crawl
With each passing day, new and new crypto and NFT regulations are being imposed on the holders. So that restricts the range of use and also pulls back users from investing in such a volatile and regulative investment.
We build it and no one comes
Some of the previously listed NFT galleries have few bidders for the brand formulated NFTs. Either the projects are not interesting, the art is sub-par, or the marketing did not construct as much FOMO to receive the crypto whales to buy. Is it damaging to the brand? Not really, the space is so new, it is just a waste of time for all the parties associated.
Lack of talent to execute cutting-edge experiences
Most brands will have the scarcity of specialized internal talent to implement complete NFT campaigns, so they will likely require to partner with marketplaces, platforms, agencies, and influencers. The budget begins to increase for a potential niche campaign that may not portray direct sales returns.
Concerns over sustainability scare away brands
The crypto area has gained prominent criticism from many for lack of sustainability practices and also wasting energy. The core crypto sector has fired back, either refuting the challenge, comparing the works to gold or oil or printed money, or promising to enhance. Brands that are environmentally sensitive, will wish to stay away from NFTs and crypto till sustainability efforts are enhanced.
The Metaverse has formulated a new virtual economy with numerous opportunities for its consumers. Post-Covid, when there have been restrictions in travel, Metaverse was a great marketing tool to advertise items in a 3D digital space. And with this, many brands have started to make their own NFTs to compli that with the metaverse. In this article, we have spoken about how brands have started experimentation on NFT and Metaverse and where it is leading the future too.
Frequently Asked Questions On Experimentation On NFT And Metaverse
One way individuals are using NFTs in the metaverse is to purchase virtual land, like LAND which is a digital piece of real estate in The Sandbox. These virtual areas use NFTs, as opposed to a physical deed, to implement ownership of specific locations within a digital world.
For purchasing NFT metaverse you will first have to download any crypto wallet, select the wallet username, store your recovery phrase securely. Then you will have to purchase a commonly used crypto like Ether (ETH) and then with that you can purchase a metaverse NFT token.
At the time of writing this, the Metaverse NFT price is $3.13.
Link NFT issuance to participation in brand-associated experiences. Mint NFTs that document attendance of exclusive branded experiences such as fashion shows or product launch events. Improve an existing loyalty program with an NFT collection, like Clinique has done.