6 False Narratives About the Metaverse and NFTs that Need Correcting
The past half-decade has seen an absolute explosion of startups, with countless innovative entrepreneurs looking to bring new ideas to market leveraging the latest tech trends. Many of them are in the blockchain space. In particular, this year has seen a massive uptick in the NFT space with both startups and established companies looking to capitalize on the growing appeal of non-fungible tokens. Now, the metaverse is quickly following along the same track.
Michael Wagner, CFA, CEO of Star Atlas, is a serial entrepreneur and founder with a formal background in capital markets analysis, economics, and valuation methods. He has founded multiple companies centered around the emerging blockchain and cryptocurrency industry, the most recent of which is Star Atlas.
Star Atlas is a next-gen gaming metaverse emerging from the confluence of state-of-the-art blockchain, real-time graphics, and immersive multiplayer video game technologies. Real-time graphics technology using Unreal Engine 5’s Nanite allows for cinematic quality video game visuals. Blockchain technology using the Solana protocol establishes a largely serverless and secured gameplay experience. Non-fungible tokens obtained and used within Star Atlas creates an economy that replicates the tangibility of real-world assets and ownership.
I recently caught up with Michael and asked him to explain more about these emerging technologies and, specifically, to help clarify some of the false narratives surrounding blockchain, NFTs and the metaverse.
Narrative #1: Web3 is a gimmick, NFTs are risky and reflect an inherent lack of security, protection, and resilience in blockchain networks
People fear what they don’t understand, and such is the case with naysayers and critics of Web3. Though widely deployed in several use cases, blockchain is an emerging set of technologies that is by no means mature. Many people still equate all things blockchain with Bitcoin and nothing else; they are unfamiliar with the many applications of decentralized computing in gaming, finance, enterprise, land management, and other industries.
What’s most important to note is that the promise of Web3 – and for economic development in the metaverse – is truly without limit. At Star Atlas, we look to not only recreate the best of our world in the digital space, but to also build a decentralized, collective user experience that lasts for thousands of years.
Narrative #2: Gamers have not embraced the metaverse and prefer traditional platforms
This is true, for the time being. Right now, gamers have few alternatives to traditional experiences, but this is quickly becoming yesterday’s reality. I believe that, when we look back on 2022, this year will be remembered as a watershed moment in metaverse gaming, with player adoption skyrocketing to unprecedented heights. Players will soon find the metaverse to be a place without boundaries or limitations.
Narrative #3: The economics behind metaverse gaming and NFTs are designed to only benefit a select group
NFTs are designed to be changeable and utilized by consumers and businesses across vertical markets. With the rise of online services and entertainment, myriad, powerful use cases for NFTs and metaverse gaming continue emerging. Important to note is that, as familiar brands join the ranks of companies invested in the metaverse, mass user adoption will increase due to their involvement in an industry with potential for high earnings and immersive player experiences.
Narrative #4: NFTs’ utility is limited, preventing mass adoption
That’s like saying a mobile phone number’s utility is limited 30 years ago. Stakeholders in industries like finance and gaming are among those advocating to make NFTs usable in several different ways. This movement toward added utility extends the value proposition for NFTs beyond their scarcity and collectability.
The play-to-earn model demonstrates the disruptive potential of NFTs in the gaming industry. Of note is that more than half of the NFT market is attributable to in-game NFTs.
Narrative #5: NFT minting is restricted to the Ethereum blockchain, and metaverse gaming platforms are all the same
This is decreasingly true. Star Atlas, for example, leverages blockchain technology using the Solana protocol to establish a largely serverless and secured gameplay experience. Solana’s high throughput and low fees make it a perfect fit for in-game NFTs, which players can use to create real-world value for themselves by participating in the metaverse.
Simply put, Solana is secure, built to scale, with blazing-fast speeds and ultra-low fees. The ecosystem grows without sacrificing censorship resistance or security.
Narrative #6: Brands, VCs, gaming, and tech leaders remain unconvinced about NFTs and the long-term viability of the metaverse
Demonstrably false based on the level of investment in the space. According to PitchBook, “Web3 and DeFi deals dominated the landscape in Q4 2021, with $2.4 billion in funding.” Also of note is that CNBC recently reported metaverse real estate sales topped $500 million in 2021 and are projected to double this year.
In 2022, as infrastructure buildouts address the need for scalability and computing power, we’ll not only see continued investment from game developers and publishers capitalizing on long-term financial opportunities in the metaverse, but also sports, retail, real estate, luxury brands and social media platforms.
Goldman Sachs forecasts that the metaverse is an $8 trillion opportunity. Demand from consumers across all industries remains high as they seek quality content delivered seamlessly through these immersive platforms. It's not just a digital world; it’s everything else too -– and that means there are endless possibilities for how you can invest in this new frontier.
Edited by Erik Linask
