Note: “Crypto” is a catch-all term for assets like bitcoin and blockchain protocols like Ethereum.
Note 2: The “Metaverse” is a virtual environment where people live, work, and play.
Crypto is going to radically alter finance, value, organization, governance, the internet, money, and more. But it’s non-fungible tokens (NFTs) that will radically alter human society and culture.
Before I explain, I want to reiterate how bullish and excited I am about crypto transforming all things human coordination and value.
Crypto will be the method by which the world's financial rails function.
Crypto will create new stores of value comparable to, and exceeding, gold.
Crypto will change the way people interact and coordinate with each other.
Crypto will radically alter the governance of companies and, hopefully, governments.
Crypto already has created a “money layer” on top of the internet.
Crypto is money.
The internet first brought us email, which changed how people send and receive information. Then it brought us features that changed almost everything else.
Crypto first brought us bitcoin, which changed how people send and receive value, and it will continue to bring us features that will change almost everything else.
Non-fungible tokens first changed digital uniqueness and enabled strong digital property rights. These seemingly small changes will unlock the full force of the internet and virtual environments because it allows a true metaverse to form. A true metaverse is a virtual environment that enables users to own their own assets and has, ideally, a decentralized hosting infrastructure.
You cannot truly “live” inside a virtual world controlled by Facebook or Google. If you make one tweet that they disagree with, you can be banned for life. They could always decide to seize the digital property that you have worked so long to acquire. Property rights breed confidence, confidence creates thriving economies, and thriving economies create happy people.
NFTs are the key to opening a true metaverse. People will spend the majority of their waking hours within virtual environments, and society will shift in the following ways.
Internet - NFTs will change the internet by creating the “Internet of Value.” We have never been able to really own our internet-native digital items but now we can. Most of the items that people own have value in the physical world, but people rarely own items with value in virtual worlds. That is until blockchain was created and people could finally own their own currency. With NFTs, people can finally own their own virtual items.
Work - NFTs will change work as we know it. NFTs will not only enhance remote work but also will enable people to make a living from within virtual environments. Most people that make a living today from video games and virtual worlds are streamers or content creators that make income from “outside” the actual application. They usually use the game/virtual environment as a form of entertainment or content creation tool. A Twitch streamer cannot make money directly from playing Fortnite but can make money via ads on Twitch from having people watch his gameplay. NFTs enable something that people are calling the “play-to-earn” business model. This simple, yet powerful, meme means that users can play a game, earn NFTs, and then sell those NFTs for real money. We have seen this sort of idea before from games like World of Warcraft where users would obtain the in-world currency (gold) and sell it for real fiat currency. That was an extractive, arduous, and just plain not fun method of earning money from directly playing a game. The “play-to-earn” method enables actual fun gameplay where you happen to earn money because you are obtaining NFTs
Economics - We live in a world that is measured by Gross Domestic Product (GDP). This means that people value growth and consumption above all else. It doesn't matter if you build a bridge today, destroy it tomorrow, and build another bridge the day after. That is actually great for GDP because you built two bridges! Do you see how this could cause an issue? In a world of finite resources, it's best if we efficiently use resources for the most necessary purposes.
If large portions of the global economy were internet-based, then we could create entire economies based around digital assets (NFTs), which cost almost nothing to produce. There is no need to mine iron ore or cut down trees to create more NFTs, it’s just code that can be replicated extremely cheaply. If the world's economy becomes mostly virtual, then we could extract fewer resources, consume less of those resources, and build as much as we desired in virtual worlds - all while continuing to contribute to GDP.
Business Models - Needless to say, business models will radically shift if the majority of people are spending most of their time in a metaverse.
Gaming: Video games will evolve into platforms that people use for work, education, social connection, and more. Video games will become the new platforms, replacing the Facebooks’, Googles’, and other traditional internet giants.
Social Media: Instead of showcasing personalities through Instagram profiles filled with pictures, people will showcase their NFTs as a form of social media. This is a better view of someone’s personality. If someone attended a concert, their ticket could be a limited-edition crypto-collectible that shows everyone that they were there. In the future, high-end hotels or locations could offer various crypto-collectibles.
Music: Musicians can tokenize their art and sell them directly to consumers. They will be able to bypass traditional gatekeepers and publish their works directly to NFT marketplaces.
Art: Just as NFTs give musicians more power, artists that use NFTs have complete control over their work. Art on an NFT allows artists to create and sell their work directly to collectors, bypassing traditional gatekeepers.
Access: NFTs can be used as access tokens to physical and virtual locations or events. Programmable tickets can be updated or come attached to a game or some other item. NFTs are currently being used as subscriptions to different paywalled media websites, but I think this concept will carry over into virtual worlds where users will need to use access tokens to enter certain spaces.
And so much more.
I could go on about how NFTs will change business models, but that could be (and should be!) an entirely different blog post. The moral of the story is that NFTs enable a true metaverse to form and the creation of a metaverse will change society forever. People living, working, and playing inside virtual environments will transform the current operating system of the planet and NFTs are the key to this idea becoming a reality.