NFTs: Into the Meta-verse!
By Neil Tamhankar and Eshan Gupta
You’ve heard of NFTs. You’ve probably also heard of the metaverse. These new, constantly evolving technologies have become hubs of investment and the source of a lot of excitement, particularly from younger generations. “NFT” stands for non-fungible token. Kind of a weird name, right? You probably know what “non” means, and fungible means easily replaced. A non-fungible token is an irreplaceable and unique piece of data that is usually applied to files like photos, videos, and gifs.
A “Bored Ape” NFT, part of the Bored Ape Yacht Club collection.
The image above is owned by someone out there. So why can’t you just copy or screenshot the image above and pretend it’s yours? Using blockchain technology (yes, the same one used for cryptocurrencies), NFTs store data on the blockchain that is essentially digital proof of ownership. That data is why NFTs sell for millions and you copying that image won’t.
NFTs have been circulating the internet as a meme, as people poke fun at how serious NFT investors seem to be about spending their life savings on an AI generated drawing of a lion.
Can you invest in NFTs? Absolutely. Should you? Well… I’m not going to answer that. If you want to, go right ahead. The main way to buy NFTs is on OpenSea, the largest NFT marketplace. Obviously, you want to buy NFTs that you believe will appreciate in value, so you can sell for a profit. One idea is to focus on digital art, because historically real-life art has appreciated in value as time passed. And as always, remember to maintain a diversified portfolio (translation: please do not put your life savings into NFTs). It’s impossible to know if the NFT market is a bubble, but if it is, you do not want to be all-in when it bursts.
Of course, NFTs aren’t the only new kid on the block. On October 28, Facebook changed its corporate name to Meta Platforms, signifying their newfound focus on developing the “metaverse”. Mark Zuckerberg has talked a lot about the metaverse, claiming that it’s the future of the internet. However, the timing of the name change has been flagged as suspicious by the more cynical among us. At the time of the name change, Facebook was being investigated because of the leaked negative effects of Instagram on the mental health of teenagers. Some believe Facebook wanted to shift attention away from the Instagram scandal, but it's entirely possible that Zuckerberg just really wanted to officially make the metaverse the flagship of his company. One thing is for sure: Zuckerberg is intent on controlling the narrative of the metaverse in the decades to come.
The metaverse was first coined in Snow Crash, a 1992 novel by Neal Stephenson. The novel was dystopian; what a lovely foreshadowing of the future the metaverse may bring. The metaverse is a virtual universe enabled by VR technology. People have avatars and they can do pretty much anything. Participants can have virtual homes, go to concerts together, talk to friends in a virtual coffee shop, and even teleport to work as a hologram. Basically, all the things you do in real life, all from the comfort of your home. The metaverse will even have an economy and markets for buying and selling goods, like the aforementioned virtual home. This could lead to an increase in cryptocurrency usage since it makes sense to use a virtual currency for buying virtual goods in a virtual universe.
Yes, you can invest in the metaverse. Right off the bat, a clear stock to choose is Meta Platforms, Inc. They have already created Horizon Worlds, a metaverse game for the Oculus Quest 2. A less clear, but equally strong investment, is Nvidia. Nvidia produces processing chips, mainly for gaming markets. Nvidia chips are instrumental components of VR headsets, so demand for those chips will soar once the metaverse becomes mainstream. Nvidia is also developing their own metaverse, called “Omniverse”. Last but not least, Microsoft is breaking into the metaverse as well with “Mesh” which is an addition to Microsoft Teams. Mesh allows people using Microsoft Teams to have meetings in virtual rooms with virtual avatars. Since it is only for work, Mesh is not as open as Meta’s Horizon Worlds but it definitely has potential to grow.
This article was chock-full of abstract ideas, so if you made it to this point and your brain isn’t fried, pat yourself on the back. You now know that NFTs are just like people: what’s inside (the data proving ownership) is more important than the outside (a depressed-looking ape with a party horn in his mouth). Also, the metaverse is the future; it’s coming, whether you like it or not. (Honestly, I like it. It will almost certainly make humanity more introverted, but it also looks like so much fun!) On top of that, you now know how to invest in it. What are you still doing here? Go! And good luck.
