NFTs—buyer’s remorse and a flash in the pan? Some thoughts on the nature and usefulness of NFTs in virtual worlds and the metaverse

Abstract

NFTs or Non-Fungible Tokens have recently made their appearance as a phenomenon branching off from cryptocurrencies and blockchains. Lately the discussions about NFTs have focused on the investment value of NFTs and the risks associated with the investment and trade in such NFTs, which have led to huge capital losses similar to those seen in the speculative investment and trade in cryptocurrencies such as Bitcoin. After the initial hype, the value of NFTs as investment vehicles has mostly collapsed with many early adopters now experiencing buyer's remorse. From this background the use and value of NFTs in several online virtual world or gaming environments is discussed with a focus on whether they add value to or detract from the user experience. While NFTs do appear to have the potential to function as a new addition to the existent types of digital property objects in terms of digital assets or virtual property, the use case as a new technological feature in online gaming environments remains contentious. It is argued that the future usefulness of NFTs will increase as the metaverse is developed and NFTs are not restricted to various proprietary ecosystems. Once someone can use their NFTs linked object in an unrestricted common environment such as the envisaged metaverse, the use case for NFTs will be much more convincing. The speculative aspect of investing in NFTs and the often ludicrous amounts of money spent on such nebulous objects set the stage for the discussion.