NFT, metaverse: four definitions to understand this new world

Sent January 11, 2022, 10:14 amUpdated January 11, 2022 at 10:16 am

The three letters of the acronym NFT and the concept of metaverse make the rounds of economic news. However, like cryptocurrencies, these notions still face the general public’s misunderstanding that these booming markets are just a haven for fanatics or a speculative bubble. Here is a lexicon to better understand the trend.

NFT

The name NFT is the acronym of the English “non-fungible Token”, or in French “non-fungible token”.

The adjective “fungible” is an economic and legal term that designates the ability of an asset to be exchanged for another asset of the same value. For example, a two-euro coin is fungible because it can be exchanged for another two-euro coin or two one-euro coins.

Conversely, a “non-fungible” item cannot be exchanged for something of equal value. For example, a piece of land, a jewel, a work of art, a bottle of wine are non-fungible, since each one has its own characteristics which can be subjective. We can estimate their value in money, but finding another good of the same type whose value is strictly identical is much more difficult.

An NFT, therefore a “non-fungible token”, allows you to associate a non-fungible asset (an image, a video, a piece of music, a work of art) to a digital token. Owning this token means owning this asset, whose authenticity is guaranteed by the blockchain. By comparison, anyone can buy a print of the Mona Lisa, but the owner remains the Louvre. In a dematerialized economy, NFTs therefore allow you to own a digital object.

Blockchain

The blockchain (translated into French as a blockchain) is a technology that allows you to protect and verify a set of information in a transparent and tamper-proof way.

This verification process is guaranteed by users in an automatic and decentralized way thanks to cryptography which is an encryption technique at the origin of bitcoin. As soon as new information is registered on the network, the previous one is registered in a digital register and can no longer be changed.

The main advantage of the blockchain is therefore that the history of information can be kept without anyone being able to alter it and without an intermediary. Bitcoin is therefore a financial application of the blockchain, where the recorded information is transactions that do without intermediaries, especially banks.

The NFTs are also based on the blockchain that allows you to record on a digital register the proof of the digital ownership of an asset with a set of information relating to that asset (the author if it is a work, its price, etc. ).

Ethereum

Ethereum is the name of the platform based on blockchain technology on which most NFTs are distributed today. Ethereum allows the creation of digital tokens in a secure and tamper-proof way, where the information of the asset registered in the form of NFT can be exchanged (bought or sold) on dedicated platforms.

Metavers

To simply define the metaverse, it must be seen as a set of virtual universes (video games, social networks, online store) linked together. Thanks to the blockchain it is thus possible to create an economy in which metaverse users can navigate between these different virtual universes and own objects through NFT and carry out transactions in cryptocurrency.

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