Beyond the hype, is there really any merit to investing in trendy tech concepts, like NFTs, the metaverse and Web 3.0?
In one way or another, all of us have been exposed to popular tech buzzwords, like non-fungible tokens (NFTs), the metaverse and Web 3.0. As of 2021, the NFT market is worth US$41 billion; several metaverse tokens, such as Axie Infinity Shard and SAND, have been climbing the crypto ranks. The blockchain technology on which both NFTs, crypto and Web 3.0 are based is becoming more mainstream—even the real estate sector and sports stars are taking part in the tokenization craze.
With the growing popularity of these terms comes the question—is any of them actually worth all this attention? Let’s dissect the opportunities offered by NFTs, the metaverse and Web 3.0 to find out whether you should dive headfirst into the trend with your money or steer clear of it.
While the first mention of NFTs must make you think of digital art collectibles, like Cryptopunks, or memes, like Side-eyeing Chloe, this is only a fraction of what NFTs can be used for. One of the applications of NFTs is that they can be used as a currency to pay content creators. For instance, Monaco Planet passes off a share of advertising revenue to the creators.
The historical ownership data built into NFTs also makes it possible to use them for document verification (like vaccine passports). The historical data can be used as a means to prevent counterfeit ticketing (by helping you trace the origin of your ticket) and ticket scaling (by triggering royalty payments to the original seller). They can also be used in logistics to help consumers learn about the various stages a product has gone through and for how long.
This is not to say that there are no downsides of NFTs. One of the major points of concern with owning any NFTs is that you get directed to where their historical information is stored via links, but links can die. Even the back-up solutions created for NFTs are not entirely fool-proof either. Hence, there is a chance that your NFTs can just disappear and leave behind an “error 404” page.
NFTs also have a huge environmental impact due to them largely relying on the Ethereum blockchain, which, at the moment, follows a proof-of-work model that requires a lot of computational power.
Many businesses have been spreading to the metaverse recently. For instance, the fashion brand Balenciaga created digital-only pieces for characters in the video game, Fortnite. Nike and Adidas Originals have created metaverses within Roblox and The Sandbox where they will provide fans with exclusive content.
Besides the fashion industry, the metaverse is also useful for day-to-day interactions and collaborations. Nvidia’s Omniverse allows engineers to collaborate with each other and also to simulate things that might be too difficult to do in real life. Accenture’s Nth Floor is a metaverse that makes it possible for co-workers to get together digitally for meetings, training sessions or just coffee meetups.
The metaverse also facilitates interactivity between singers and fans in virtual concerts. Singers Lil Nas X and Tai Verdes have been taking advantage of this technology to hold virtual concerts within the Roblox metaverse.
While it might be a great space for social interaction without ever leaving the comfort of one’s home, the metaverse has a very serious harassment problem. One of the beta testers for Meta’s VR platform Horizon Worlds spoke up about being harassed on the platform last year. A similar story also broke out this month when co-Founder and Vice-President of metaverse research at Kabuni Ventures, Nina Jane Patel, talked about the harrowing experience of being gang-raped within 60 seconds of joining the platform.
A more technical critique of the metaverse comes from Tesla founder Elon Musk. He says, “Sure you can put a TV on your nose… I’m not sure that makes you ‘in the metaverse’.” He believes that the need to put on clunky, uncomfortable headsets to enter the metaverse and the accompanying motion sickness make it not “compelling”.
Tied together into Web 3.0
To bring everyone up to speed, Web 3.0 is essentially an evolved form of the internet based on blockchain technology. This version of the internet doesn’t rely on middlemen like, Google, Twitter or Facebook. Instead, information is stored on computers within the network. This version of the internet gives more freedom to users, allowing them to vote on decisions made about the network. If the growth of the NFT and cryptocurrency market is any indication, Web 3.0 might be on the horizon. Since investments in crypto and NFTs ultimately further the growth and development of blockchain technology, it also fuels Web 3.0.
Now that we know the wide variety of opportunities offered by the three, calling them “buzzwords” seems to undersell their usability and practicality. Naturally, you need to consider all the negative aspects attached to these terms before you consider investing in any of these.
For instance, Web 3.0 has received critique from Twitter founder Jack Dorsey and Tesla founder Elon Musk. Dorsey believes that even though Web 3.0 pretends to be “decentralized”, it is in fact controlled by venture capitalists. Musk, on the other hand, finds the concept implausible and says that Web 3.0 is nothing more than a marketing ploy.
Sure, these trends seem sustainable and won’t vanish anytime soon. But bear in mind that not all projects related to NFTs, the metaverse and Web 3.0 are profitable and authentic. From pump and dump schemes and rug pulls to ransomware attacks—there are a lot of crypto-related scams that have been making rounds recently. It takes time and meticulous research to identify a worthy project to pour your money into. When it comes to investing your hard-earned money into these projects, don’t let the hype cloud your judgment.
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