The economy of the metaverse will be shaped mainly by the ability of users to monetise and transfer content. This is precisely why NFTs are critical to the way we will interact in this ecosystem. From their inception, blockchain projects have struggled to match centralised competitors in various sectors spanning IT, finance, real estate and more. The metaverse is likely to upend this dynamic, with the blockchain industry appearing better positioned to lead the charge toward a virtual revolution.
However, this narrative has been challenged following recent initiatives by centralised behemoths like Facebook. The social media giant envisions a future where it will play the leading role in supporting the products that will make the metaverse an irresistible place to work, socialise, network, and have fun. But how would the NFTs that enable content monetisation function in a centralised ecosystem? Here we consider some of the potential risks facing NFT creators in a centralised metaverse.
What are NFTs, and why are they important?
NFTs are digital representations of underlying assets which are unique and non-fungible. They could be drawings, songs, or even accessories. Importantly, due to their deployment in the metaverse, it becomes possible to own and transfer properties there. In addition, their usage creates a solid connection to the “real world” economy, where NFTs are already tradeable on established exchanges.
Risks of owning NFTs in a centralised metaverse
- Lack of transferability
Creating and owning NFTs in a centralised metaverse is likely to create problems as a denizen moves across different verses. If the current scenario is any indication, centralised metaverses will inevitably come with regulations that inhibit compatibility with decentralised metaverses. The extent to which this will impact the development of applications and hardware that will power the ecosystem is yet unclear, but if you cannot show off your $ 3,000 avatar from Somnium or Decentraland in a metaverse built on a hyper-regulated Facebook-owned ecosystem, well, what is the point?
A centralised metaverse increases the likelihood of censorship. Today, platforms like Facebook restrict users who post content they deem to conflict with their policies or interests. There is no reason to imagine it will be different for developers and NFT creators in their metaverses.
Users and content creators will be at risk of getting de-platformed at the whims of central authorities. For holders of NFTs, this is a particularly problematic possibility as NFTs can often be quite expensive.
- Storage and use of data
We previously discussed why privacy would be a challenging issue for denizens in a centralised metaverse. The potentially intrusive nature of the technology heightens the risk for NFT creators. Personal data could be auctioned to the highest bidder, and nobody wants a verse where users with the most expensive avatars are profiled and targeted with ads.
NFTs in a decentralised metaverse
A decentralised metaverse offers the best solution for NFT creators and users. Data in a blockchain is unalterable and immutable. This means no entity could tamper with it. Moreover, some of the leading decentralised projects around the metaverse space, like our Cudos network, utilise open-source architectures that allow for the creation and deployment of smart contracts and decentralised applications. This allows developers to work collaboratively, earn, and create the DApps that will power the metaverse.
Cudos currently supports NFTs on the Cosmos chain, which means users can easily transfer assets across Cudos abridged blockchains. The immense potential for transferability, security, and transparency gives decentralised projects an overwhelming edge in the race to the metaverse.
What you can do to support our alternative
The beauty of decentralisation is that it allows everyone to contribute in their own unique way. To help build a decentralised metaverse ecosystem, you can join forces with us.
If you missed our latest announcements, please catch up on some of our recent partnerships here.
Let us create a decentralised, public, and free metaverse for all!
The Cudos Network is a layer 1 blockchain and layer 2 computation and oracle network designed to ensure decentralised, permissionless access to high-performance computing at scale and enable scaling of computing resources to 100,000’s of nodes. Once bridged onto Ethereum, Algorand, Polkadot, and Cosmos, Cudos will enable scalable compute and Layer 2 Oracles on all of the bridged blockchains.
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