comscore Why are big companies, celebrities chasing NFTs and metaverse?

Pepsi, Gucci, Ubisoft, Salman Khan: Why big companies, celebrities chasing NFTs, metaverse?

NFTs are digital tokens that can be used to represent ownership of unique items such as art and collectibles. They are unique and limited as they are backed by assets in the physical world.

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NFTs and metaverse are two of the most talked about trends this year. While they might seem something associated specifically with the tech world, they have transcended both industry and interest. From fashion brands such as Ralph Lauren, Gucci and Nike to tech companies such as Microsoft and Ubisoft to beverage brands such as Pepsi and Coca-Cola to celebrities such as John Cena, Paris Hilton, Salman Khan and Amitabh Bachchan and even office bearers, former FLOTUS Melania Trump, everyone is trying to dip their toes in this emerging trend. Also Read - PlayStation creator Ken Kutaragi shrugs off metaverse, says VR headsets are annoying

While the trend seemed to have exploded around the time Facebook (now Meta) announced a major change in its structure and its focus – chasing the metaverse that is – it’s actually much older. Older than we care to admit. Also Read - Meet India’s first couple set to marry in the metaverse

But first a bit about NFTs and metaverse

A Metaverse is a hybrid space that uses a combination of virtual reality (VR), augmented reality (AR), and 3D holographic avatars to give users a social experience in the virtual world. It gained spotlight when Facebook-founder Mark Zuckerberg announced that his company, Meta, would be focusing on developing the metaverse. Also Read - This Indian couple will host Hogwarts' The Great Hall-themed wedding reception in metaverse

However, he is not the person to imagine such a space or coin the term. The term ‘metaverse’ was coined by science fiction writer Neal Stephenson in his novel ‘Snow Crash’ almost 30 years ago wherein he talked about life-like avatars that met in VR.

Coming to NFTs or non-fungible tokens, they are digital tokens that can be used to represent ownership of unique items such as art and collectibles. As explains, they can only have one official owner at a time and they are secured by the Ethereum blockchain. They are unique and limited as they are backed by assets in the physical world.

Interestingly, NFTs aren’t a new concept. They have been around since 2014. But public awareness about them came around 2017 with the success of CryptoKitties, an online game that enabled people to buy virtual cats on Ethereum blockchain. As per a TechCrunch report, people across the globe had spent over $1 million in buying virtual cats.

While NFTs have been around for quite some time, their adoption certainly increased this year by manifolds. And the proof lies in the diverse list of companies and public figures who joined the band wagon this year.

Who’s talking about NFTs and the metaverse?

Budweiser, back in August this year, bought the Ethereum Name Service domain “beer.eth” and a space rocket NFT. It announced its own series of NFTs, which will include 1,900 digital collectibles. In the same month, Coca-Cola’s first ever NFT auction garnered $575,883.61 in an online auction. Around the same time, fashion major Ralph Lauren announced its own foray into the NFT world by selling a virtual clothing line inside of Zepeto’s metaverse. Even before that, Gucci auctioned NFTs inspired by its Fall/Winter 2021 collection in an online auction.

The list doesn’t end there. Companies such as Adidas, Nike, Ubisoft, Pepsi, MG Motor India, Hollywood celebrities such as Paris Hilton, John Cena, Justin Beiber, and Rihanna and Bollywood celebrities such as Salman Khan, Amitabh Bachchan, and Kamal Hassan among others have invested in this trend. And the list goes on and on.

But what about Facebook…umm…Meta?

While companies and celebrities started investing in the NFTs much before Facebook became Meta, the development certainly served as the inflection point after which developments in this field exploded at a much faster pace. Microsoft introduced Mesh as its entry point to the metaverse. Nike bought a company that makes virtual collectibles for the metaverse. Former FLOTUS Melania Trump announced her NFT-based venture. Several Bollywood celebrities including Salman Khan and Ranveer Singh and Deepika Padukone starrer 83 announced their entry in the NFT world.

Which brings us to the imminent question: Why this trend?

There are several reasons for this sudden boom in the adoption of NFTs and the metaverse.

Blockchain makes NFTs more reliable

NFTs, as we mentioned before, existed long before anyone had heard about the Blockchain technology, at least in the mainstream media or in active conversations. However, this technology made NFTs truly unique, more reliable and hence usable. See, an NFT is a digital representation of an asset in the physical world. But when registered on a blockchain, an NFT becomes a digital asset that cannot be tampered with owing to the name of this technology. All of which adds credibility to the digital asset and makes it more valuable.

NFTs and metaverse complete each other

NFTs, despite their time of introduction, are still in nascent stages of adoption. Before the metaverse became a more mainstream concept, there were few use cases for NFTs. While there aren’t many use cases, things have certainly changed in the past couple of years. In addition to being used for buying and selling artwork and collectibles, NFTs are also being used for transacting in the metaverse.

For instance, Budweiser while announcing its entry in the NFTs space had said that its NFTs will give people access to a platform called Budverse with special rewards and benefits. Similarly, Ralph Lauren designed a line of virtual clothing inside Zepeto that can be purchased using the platform’s virtual currency ZEM. Simply put, NFTs are the equivalent of currency in the physical world as they can be used for transacting in the virtual world.

Next big digital avenue

Then, of course, there is the fact that NFTs and the metaverse are the next big digital avenue. As Zuckerberg put it, the metaverse is “the successor to the mobile internet”. While he didn’t mention the NFTs, it wouldn’t be far-fetched to say that NFTs are the core components that would turn metaverse into a functional virtual space.

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  • Published Date: December 23, 2021 8:43 AM IST

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