Bandai Namco’s vision for a Gundam metaverse. Image – Bandai Namco.

By Anton Karve

As promised, here’s some simplified explanations of all the technical jargon. Take a look through before heading back to Part 1.

Metaverse: In a nutshell, the metaverse is a digital world. Many think that the metaverse and virtual reality are one in the same, but a “Ready Player One”-style virtual reality is just a subset of the ‘metaverse’ umbrella. The easiest way to think about the metaverse is as a cyber space in which one can interact – talk with others, attend social gatherings, make transactions, own assets – and do anything you can do that does not require your physical body (for now). The metaverse market is expected to grow to $800 billion by 2024, so that says enough about why many individuals and companies want to enter the market early.

Fungible: Something that can be identically replaced. iPhones, Big Macs and standard white Air Force 1s are all examples of fungible items, because they can be replaced with an identical product. They aren’t made to be unique items.

Non-fungible: Leonardo Da Vinci’s “Mona Lisa”. Michelangelo’s “David”. Harry Potter and the Goblet of Fire, specially signed and with a unique note written on the first page by J.K. Rowling herself. An Olympic gold medal with the year and event name engraved on it. All of the above are examples of non-fungible items because they are completely unique. 

Blockchain: An unhackable, decentralised (spread across many networks and devices) record of transactions. A network of computers simultaneously and continuously verify the transactions made, and all these transactions are updated on a public record. Due to the decentralised and public nature of these transaction records, it is extremely difficult to alter, disrupt or delete these transactions from the public net of records. It is worth noting that all these transactions, computer networks, and users of blockchain are anonymous on the record.

Cryptocurrency (crypto): A virtual unit of code that one can buy with real-world money. By paying for this currency with real-world money, you add real-world value to this cryptocurrency, which is why people can now pay for actual products with crypto. Cryptocurrency is built upon blockchain technology, which makes it impossible for one to hack the crypto system. Since all transactions are on the public record, anybody will be able to account for all transactions made using any cryptocurrency. You can buy multiple units of cryptocurrency, or fractions of a unit. Since many cryptocurrencies have picked up extremely high amounts of real-world value, many transactions are made in small fractions of the crypto units. Some examples of commonly-used cryptocurrencies are Bitcoin (BTC) and Ether (ETH). Ether is the cryptocurrency built upon Ethereum blockchain.

Non-fungible tokens (NFTs): Completely unique digital tokens (think about them as items). The most famous NFTs are “Bored Ape Yacht Club” NFTs, some of which sold for millions of dollars. NFTs are often represented by digital visual art, but they can really be anything – music or video clips, written text, or even virtual property in the metaverse. 

How does one ensure that their NFT is unique? NFTs are built upon blockchain technology, meaning that they are supported by a public system that is extremely difficult to hack. When you buy a NFT, it is assigned to your account on the decentralised system. You are aware of how many of these NFTs have been created, and due to the protection of blockchain you can be sure that nobody but you can change the fact that you own the NFT. This is further strengthened by the fact that you bought the NFT using cryptocurrency, with a transaction present on the public record. 

If you still don’t get it, think about it this way: if the richest person on earth somehow managed to purchase the Mona Lisa from the Louvre, they did this with the understanding that millions of people have amazing pictures, printed copies, even perfectly faked versions of the Mona Lisa. That doesn’t change the fact that the Mona Lisa they own is the real original painting by Leonardo da Vinci. Their knowledge is strengthened by the fact that they bought it from the Louvre, a public, undisputed organisation on the works contained within the museum. Thinking about this within the context of NFTs, a person that spends money on “Bored Ape Yacht Club” NFTs knows that even though there are hundreds of thousands of screenshots of the NFT they bought circling online, the NFT they bought is the real one, while the screenshots aren’t.

A whole host of high-resolution images for download and printing, just a Google search away. Image – Google Images.

People spend such massive sums of money on NFTs many different reasons – they like the art, owning such an NFT earns them social clout, ownership of a company’s NFT gains them access to certain benefits such as giveaways and discounts, they want to upsell the NFT for a profit, or simply because they are rich and they can. The easiest comparison is the sale of fine art – often, you have no idea why people buy these expensive works of art, but your opinion doesn’t change that they still do.

Last thing – since NFTs are digital items paid for by cryptocurrency, NFTs exist on the metaverse. Anybody who buys NFTs has already interacted with, and has a stake in, the metaverse. Basically, the metaverse is the umbrella concept that covers all these interactions.

Now that you’re well-versed on all the key terms and concepts, head back to Part 1 of Meta-Sneakers.