NFT stands for Non-fungible token. Non-fungible simply means non-interchangeable, or non-irreplaceable. Basically, unlike a dollar which can be traded or replaced with another dollar, an NFT is unique and can’t just be replaced with something else.
Today’s NFTs are basically like digital collectibles. They are verified on the “blockchain” which basically just means that there is a public global ledger (list) that shows who owns what. So people anywhere can verify that you are truly the owner of the digital asset and no one else.
Many people make fun of or outright criticize NFTs. “Why would I want an NFT of this picture if I can just print it out or download it myself?”
To answer that question, you have to answer why people do the same thing with sports cards or original artwork like the Mona Lisa. If you can print out or download a copy of the Mona Lisa, why have the original? It’s a factor of human psychology. Status symbols, perceived values…etc.
So where do NFTs fit in the Metaverse?
They can have two main uses. The first is digital belongings. The second is digital identity.
In the Metaverse (a network of virtual worlds) you might buy and hold onto certain digital items, such as clothing for your avatar. NFTs are perfect to verify you are the owner of those virtual items.
But NFTs have many uses even in the physical world, NFTs can be tickets to concerts, or a birth certificate, or a deed to a house. An avatar that you have in the Metaverse could be linked to your biometric data. It can hold a record of your identity.
In short, it’s a great way to prove ownership of pieces of the Metaverse. Such as your virtual home, or avatar outfits, or your digital identity.