The Effect of NFTs and the Metaverse on the World Economy

Article by Vinita Prajapati

Recently you might have heard a lot about NFTs (Non-Fungible Tokens) and Metaverse. These two words are what we had mostly come across after 2019 when the world had switched over to the digital economy due to covid.

The advancement in technology has made a faster transition after the pandemic; the world now functions over the internet. This advancement would not have happened so soon if there had not been an effect of lockdown.

Since the digital world has begun to advance rapidly, we should keep ourselves updated. The new digital economy is the current need of society and has become a necessity today.

We all know about cryptocurrency and how it has changed the world of finance to Defi, i.e., decentralized finance, by eliminating the need for centralized repositories (Banks, NBFCs) to maintain people’s money. It has changed the way money is dealt with worldwide and has eliminated the local lengthy and time-consuming procedures of transferring money from one part of the world to another, which can be done effortlessly and within seconds with new blockchain technologies.

Non-fungible tokens are also a part of the new digital economy. They are day by day becoming more popular since the advancement and development of metaverse is going to happen in the future.

NFTs were earlier related to digital art, but today a lot of the population is using these to enter into the metaverse. From the moment play to earn games like Axie Infinity arrived, the future of the metaverse and its influence in the digital economy has increased. Philippines and Vietnam have adopted this technology to a great extent. In an earlier stage, the amount required to play Axie Infinity was about $12, which has increased to about $300 in just one and a half years. With the growing popularity of these play-to-earn games, new gates are opening for using this technology in other fields also via metaverse.

The metaverse is a composition of many elements where each element is prepared by different organizations working on it. Its popularity has increased to the extent that Facebook has changed its name to ‘Meta’. Facebook is also working on creating different elements of the metaverse. Through this technology, people will be able to travel around the world and feel the reality by sitting in their homes, and in the future, most of the training and education might happen through a metaverse. The metaverse is a virtual world made up using AR, VR, and blockchain technologies.

With the coming up of Web 3.0, there will be a significant diversification of content and data, which is earlier kept centralized by different organizations and used for their benefits. But with the upcoming Web 3.0 technology, users will be allowed to keep their data private and be required to share their data only if they want to a trustworthy organization. All the data will be kept with the devices used by the users and not with any centralized service provider.

With the use of blockchain technology, data and content have also become an essential part of the economy and are now being traded over online platforms. With the advancement in these technologies, data and content have also become digital assets.

A lot is going on around the world today regarding technologies, and it will go beyond imagination. So, in today’s world, it is required that we keep ourselves updated on these new technologies and the concerns related to them in terms of social and legal consequences.

There is a lot to discuss in the upcoming digital world. We better keep track of the platforms that will become our future.